Power to the Peer 

you can lead consumers to music, but can you make them pay?

Wednesday, May 15 2002

In the last hours of the 12th annual conference on ”Computers, Freedom and Privacy,“ held at a San Francisco hotel mid-April, Frank Hausmann of CenterSpan Communications delivered a pitch for his company‘s solution to the legal puzzle of Internet music sharing: a ”distributed network“ called C-StarOne, with content to rival Napster’s finest hour on a platform that will also allow users to pay for what they download. Hausmann, underscoring the need for such a service, described how horrified he was when he came home to find his 9-year-old daughter on the family computer downloading her favorite songs using KaZaA, a client for sharing files on the FastTrack network servers. He sat her down and explained to her that file sharing was stealing, and reminded her it was wrong to steal. Seated to his left on the ”Peer to Peer and copyright“ panel, however, was Verizon Vice President Sarah Deutsch, who had earlier briefed the audience on the ways in which her company handles ”notice and takedown“ requests to suspend subscribers for copyright infringement. Deutsch countered that the kids she knew had been taught the virtues of sharing, ”and it‘s hard to explain why that’s illegal over the Internet.“

Despite the increasingly weird slogans of the Recording Industry Association of America (the new one: ”As Old as the Barbary Coast -- New as the Internet“), and Elvis Costello‘s recent statement to The New York Times that there’s no ambiguity about file sharing -- ”If somebody makes something and you take it, that‘s stealing“ -- there still exists no agreed-upon moral absolute about sharing digital content with an ever-expanding network of sometimes anonymous ”friends.“ An estimated 40 million people living in the United States use various peer-to-peer networks to share files, presumably to get instant access to copyrighted work as well as the other kind. KaZaA alone reports 1.4 million users logged in at any one time, according to Redshift Research. Among those people are responsible parents and teachers, law-enforcement personnel and people in the record industry, many of whom object on the face of things to peer-to-peer yet realize they’d be idiots not to exploit it.

Because peer-to-peer file sharing has proved to be a lawsuit-resistant Hydra -- hobble one network and two more rise up to replace it -- and because the record companies‘ collaborative stabs at delivering music online, such as Pressplay and MusicNet, miss the point of the whole exercise (that people sometimes like to share music with each other, as opposed to having taste dictated to them by A&R men) and because there are obvious problems with an industry dependent on the public’s fickle affection branding its most enthusiastic consumers criminals, major labels and movie studios have begun to get anxious for a solution to their peer-to-peer woes, which the International Federation of the Phonographic Industry recently blamed for a 6 percent drop in CD sales in 2001. So have longtime defenders of digital freedom: In the audience of ”Peer-to-Peer and Copyright“ at CFP were Jessica Litman, one of the country‘s premier experts in copyright law; Mike Godwin, longtime legal counsel for the indefatigable Electronic Frontier Foundation; and Phil Zimmerman, creator of the cryptography program Pretty Good Privacy. Perhaps because peer-to-peer remains the only frontier still not completely drawn and quartered by media conglomerates, passions to protect or control it run high.

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One solution comes from Senate Commerce Chairman ”Fritz“ Hollings, a Democrat out of South Carolina as beholden to the movie industry as Bush and Cheney were to Enron before the fall. Hollings’ Consumer Broadband and Digital Television Promotion Act, also known as the unpronounceable CBDTPA, would mandate hardware solutions to prevent unauthorized copying of content protected with Digital Rights Management technology (”DRM-wrapped“). The CBDTPA would spell economic doom for hardware manufacturers, who would have to invent machines that do less than the ones on the market now. As Philips and Intel have ponied up for their own legislators in Washington, the bill seems unlikely to pass. Another solution comes from Sharman Networks Inc., the Australian firm that acquired KaZaA last winter, which proposes an ”Intellectual Property Use Fee“ -- an across-the-board, flat-fee royalty paid out to content owners by the entire web of parties implicated in peer-to-peer networks, from computer makers to Internet service providers. (”It‘s ridiculous,“ opined RIAA CEO Hilary Rosen.) Another idea might be a wide-open content-swapping network that will allow users to compensate artists or, if they must, the record companies themselves. What the RIAA forgets when it accuses peer-to-peer users of a ”why pay for it when it’s free“ mentality is that some people actually like to pay for things, and even those people use LimeWire and KaZaA and WinMX to download music, because file-sharing -- illegal, immoral or not -- is the only way they can get what they want in an instant. No one -- not John and Sean Fanning of Napster fame, not Sharman Networks, not the sprawling community of software developers who manage Gnutella -- has yet invented such a beast, and for one simple reason: The record labels haven‘t figured out how and to whom they should license their music. And you can’t pay someone for something you don‘t have permission to possess.

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