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MP3 Law Proposed in Congress

http://stations.mp3s.com/stations/103/music_owners_listening_rig.html
posted by netwebly
9.25.2000

Washington - Virginia Democrat Rich Boucher and three Republican Senators introduced bipartisan legislation in the House that may have a profound impact on how Americans use the Internet to listen to music and which may also impact other areas of the rapidly evolving field of cyberlaw, especially those areas involving digital content.

The legislation, called the Music Owners Listening Rights Act of 2000 would rewrite existing copyright law to make it legal for companies like MP3.com to offer services which allow consumers to access personal copies of compact discs over the Net.

"Simply stated, a consumer who lawfully owns a work of music, such as a CD, will be able to store it on the Internet and then downstream it for personal use at a time and place of his choosing," Boucher said in his address.

The proposed law would apply only to recorded music and could be interpreted fairly strictly by US courts.

"After the consumer shows proof of the ownership of the music, he will be able to listen to it streamed to him over the Internet from any place that that he has Internet access. Consumers would not be able to transfer music to someone else or use the music for commercial purposes."

In April MP3.com launched a service it called My.MP3.com. Like other locker services available on the Net, My.MP3.com allowed users to access their music collections online, enabling them to store Mp3 files remotely and stream music directly to their computers

The company created a database of thousands of compact discs featuring the work of many popular label artists. The idea was that users would be able to cut time off the uploading process - which can be agonizingly slow over low bandwidth connections due to the typically huge file size of MP3 recordings - by accessing the recordings stored on the database instead of transferring the files themselves.

MP3.com CEO Michael Robertson envisioned a service which would allow music fans to use the Net to listen to their music whenever and wherever they wanted. A service that might even do for MP3.com what Napster had done for digital music as a whole.

Obviously, if MP3.com wanted to create a service that would allow it to compete with the increasingly hostile recording industry, this was one way to do it.

It was a risky move. But one the company felt was worth it, given the stakes at hand. Few observers were surprised when the recording industry responded with a lawsuit.

Recording industry lawyers argued that it was preposterous that an Internet company - or anybody for that matter - could even consider using their material without asking permission.This was stealing. Pure and Simple.

MP3.com countered that the My.Mp3.com service was perfectly legal - the 21st century equivalent of making a tape.

Unlike services like Napster and Gnutella, the technology My.Mp3.com uses does not allow users to trade or share music indiscriminately over the Net. Because the service also contained protections intended to verify that recordings were legitimate, MP3.com's lawyers believed the service was fair use.

MP3.com eventually reached settlements with four of the five major labels, agreeing to fork over millions of dollars in settlement payments. In return the labels agreed to allow the company to use their material as long as MP3.com continues to pay royalty payments.

The only holdout was Universal - the world's largest record company.

Despite repeated attempts at negotiation, MP3.com was never able to reach a settlement with the media giant. In court MP3.com argued that this was because Universal owns Farmclub.com - a web site that allows independent musicians to post their work online in hopes of winning a recording contract, a service very similar to the one that put MP3.com on the map. Universal, the company protested, was trying to put MP3.com out of business and take over the market. Even if that was true, Judge Jed S. Rakoff decided, it didn't matter. The law was still the law.

Coming down hard on the upstart MP3.com, as most had assumed he would, Rakoff awarded Universal damages that could end up being as high as $118 million. A figure that would be the largest sum ever granted in a copyright case - assuming of course, the ruling withstands appeal....

....All told, an ugly trail of events that led directly to the MP3 legislation, a point Senator Boucher made clear in interviews with reporters after the bill was announced.

"The four companies that have licensed this technology understand its power and are opting to use it to their advantage, one company ... has decided to pursue the extinction of this company.''

Skeptics had suggested that there was little chance that a company like MP3.com could ever win a political battle with a billion dollar giant like Universal.

MP3.com has announced a drive to rally political support for the Act, calling for a "million email march" on Washington. Visitors to the company's site are being urged to email representatives to demonstrate their support for the bill.

Perhaps predictably, critics are already calling the idea self-serving.

http://www.mp3.com

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