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Two and a half weeks into Napster's offline slumber, a federal appeals court has ruled the embattled file-sharing service can resume operation, but it's not clear when the site may be back up.

Napster shut down its service voluntarily earlier in July when it updated filtering software used to prevent copyrighted songs from being shared over its network. A week later, a U.S. District Court judge ruled the company must stay offline until it can show that the filtering system works 100 percent effectively.

Napster appealed, and on Wednesday the U.S. Court of Appeals for the 9th District granted its request for a stay of the lower court order, a Napster spokesperson says.

However, although the service has been offline for more than two weeks, the spokesperson could not say when Napster will be back online.

The peer-to-peer music sharing site has seen its usage drop dramatically during its court troubles. Site measurement service Webnoize estimates Napster's traffic has fallen 90 percent in three months. Music fans are already seeking alternatives.

New Service Nears

Napster is "getting close" to releasing the beta version of its new subscription service, however. The company sent the status report in an e-mail message to potential beta testers.

Napster said it is working hard on the new software to make sure the final version meets "the highest technical standards."

Much debate is being waged over whether Napster can recover enough customers to successfully launch its subscription service. Still, Napster is moving forward with its plans.

"We continue to push ahead with the launch of our new membership service later this summer, says Jonathan Schwartz, Napster's general counsel, in a statement after today's court ruling.

Napster told its beta-testers the subscription service will cost a small monthly fee, with over half of the proceeds going directly to the artists. The company concedes, however, that gaining a wide audience for the service will not be easy.

"We expect that Napster will start small and grow, just as it did when [Napster founder] Shawn [Fanning] released it two years ago," the e-mail reads.

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