Senate Committee Checks on Napster

WASHINGTON, D.C. -- A discordant band of participants in the music and electronics industry sang the blues for the U.S. Senate Judiciary Committee Tuesday, as Congress members revisited the Napster controversy.

The hearing was one of several the committee has called to oversee protecting intellectual property and copyright. Senators have expressed concern over Napster and similar services that allow sharing of copyright-protected music files without, at least in the past, payment schemes for artists or record companies.

This meeting drew testimony from Napster Chief Executive Officer Hank Barry, AOL Time Warner co-Chief Operating Officer Richard Parsons, and musician Don Henley, as well as other recording industry representatives and artists.

Alternatives in the Works

The Senate committee has, in previous hearings, pressured the established music companies to offer a solution that allows digital distribution of music and protects copyrights.

However, a recent RealNetworks deal seems to have relieved some of the heat for the music companies. RealNetworks announced Monday it is launching MusicNet, a platform for online music subscription services, in conjunction with three of the big five music labels. MusicNet will combine the music assets of Bertelsmann, EMI Group, and AOL Time Warner, whose music subsidiaries will license their music to MusicNet.

The service will be marketed in late summer or early fall, AOL's Parsons told the senators. Though initially the service will offer only music licensed from the companies currently in the deal, the goal is "to have access to all the music," Parsons says.

And although some of the major companies say a solution to protecting copyrights of digitally distributed music is imminent, at least one artist voiced his ongoing concern.

"We still don't know how this money is going to be distributed," musician Don Henley said. "We don't know how our intellectual property is going to be protected."

Technologically, the kinks to distributing high quality audio files over the Web are being worked out, but pricing distribution services is still an open question, acknowledged Gerry Kearby, chief executive officer of digital rights management and file compression technology company Liquid Audio.

Napster Claims Compliance

Napster's Barry fielded a number of questions, noting the company is complying with a court order to identify copyright infringements allowed by the Napster Web-based file-sharing service.

Charles Schumer, a Democratic senator from New York, said he has heard that, until recently, "things are available on the service that shouldn't be there."

"We are in compliance with that [court] order ... we are working to make it better," Barry said. Napster has cut the number of swappable music files from a total of 375 million to 100 million, Barry added. Because Napster has a distributed architecture, a major challenge for the company is that it must wait until a Napster customer logs on before it can detect which music files are available for download.

Early in March, U.S. District Court Judge Marilyn Hall Patel issued a modified injunction, telling music labels to identify copyright infringements but also ordering Napster to remove unauthorized songs within three days of notice of infringement. Judge Patel issued the injunction at the direction of the U.S. Court of Appeals for the Ninth Circuit, which found that Napster aids in the massive infringement of record labels' copyrights.

In Tuesday's hearing, Barry said Napster is working with court-ordered, independent technical advisors to ensure that Napster complies with the court order.