The Fraunhofer Institute, the group that initially developed the MP3 format, says it has figured out how to create surround-sound capable MP3 files (German) that are only a little bit larger in size than stereo MP3 files. The BBC reports that surround-sound MP3 files will require a compatible player to tap into the extra channels of the audio, although older players will also be able to read the files as stereo MP3s. Fraunhofer expects the technology to be available by July.