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Who Will Make the Rules? Music Industry Faces Off at DC Conference
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Unenforcable Laws

Attorney David Halberstadter said it would soon become almost impossible to police existing copyright laws, and DMA's Potter concurred, suggesting that in the long run there will be a great deal of conflict resulting from the schism between the First Amendment and copyright law. He expects that within 30 days after Congressional intellectual property hearings, legislation will be introduced that will feed fuel to the fires.

DMA's Potter pointed out that under current law an individual who emails a song to a friend could find himself responsible for paying not only a public performance royalty, but also a reproduction royalty, since the act of emailing a document (or song) creates a copy. The problem here lies in the double taxation for performing one action. But, Potter suggested, the correct analogy to describe file sharing is that Internet servers are radio towers and sending a song is analogous to a radio broadcast. He also noted that MP3.com might adopt this type of business model using escrow accounts to ensure that royalties are paid. Peters noted that Rep. Rick Boucher (D-VA) and Sen. Ben Nighthorse Campbell (R-CO) would probably reintroduce a bill that addresses many of these types of issues.

Why Don't People Care About Stealing Music?

While Halberstadter noted that members of the public seem to have no ethical or legal concerns about downloading copyrighted material from websites, FMA's Toomey sharply contrasted the notion of shoplifting and file sharing, stating that music is usually listened to one time and then thrown away. MPAA's Attaway took issue with that position, saying that file sharing and shoplifting may be different, but the economic impact is the same -- recording studios lose money. He also felt that public perception and efforts by such groups as the EFF (Electronic Frontier Foundation) hold the key as to why people don't consider illegal downloads stealing.

Frackman shed a light on all this by relating how he gave a speech at his son's high school. A student in the audience called out, "the death of Napster is the end of the world." Frackman wondered how organizations opposed to file sharing could combat that perception, further noting that the crime of file sharing is considered by many to be a victimless crime. Frackman claimed that due to industry efforts and filtering software, the number of files shared on average has dropped more than tenfold.


The panelists turned their attention to DeCSS case and the likely battles to come if the court agrees that the DMCA was violated. Wired's McCullagh indicated that both sides are likely to appeal to the 2nd Circuit Court of Appeals and the case may eventually make it to the Supreme Court. He believed that both courts would confirm the ruling. The next battle, he predicted, would be with individuals who, like a professor at Carnegie Mellon, have posted on their web sites different versions of the decryption codes. Attaway agreed that the 2nd Circuit and the Supreme Court would affirm the DMCA anti-circumvention clause. He compared the ruling to earlier cases of people owning/distributing illegal cable boxes and satellite de-scramblers. The case will hinge on the idea of theft of services, even though delivery of the services has changed, Attaway said.

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McCullagh disagreed, suggesting that the anti-circumvention aspect would be struck down. He pointed out that if the ruling is upheld, then having seven lines of Perl in an email or on a T-shirt (the size of the most efficient version of the DeCSS code) will become illegal. He pointed out that an Ohio Court recently found that software code is free speech and it is not within the purview of the courts to limit free speech. Attaway said that the lyrics of a song on a t-shirt entitle the author of those lyrics to royalties and there is very little difference between the analogies. Peters said there are distinctions, but when a person buys something to circumvent the laws then the courts may take action. Halberstadter concurred and thought that the ruling could be too broad and that the doctrine of fair use should be considered.

McCullagh stated that Catherine Sullivan, dean of Stanford Law School, had argued that fair use needs to be granted if an individual buys a DVD and needs a system to play it on. He said there are many operating systems that can't play DVDs, so individuals must invent their own means. For example, there currently exists no industry-sponsored software licensed to decode DVDs for a Linux machine, yet those people who operate on the Linux OS should still be able to view DVDs. Attaway disagreed, arguing that just because a person wishes to play a DVD on a cell phone doesn't mean he should be allowed to decode the DVD. Potter stepped in and said that the industry's intention was not to sue a family for transactional use when decoding a DVD, since this doctrine relies upon intent. The family has paid for use of the DVD, either through purchase or rental, but the problem occurs when the DVD is shared over the Internet. He said the anti-circumvention precepts are too broad for the applications and communications ability that the Internet provides.

Predicting the Future, or Not

Lastly, the panelists discussed the future of motion picture and music use on the Internet in the next five years. Some of the ideas: a thriving online marketplace for motion pictures will pick up momentum in the next couple of years, new types of business models will evolve for delivery of music and movies, greater consolidation of artists, and a move within the artist communities toward greater representation of their views.

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