Online music interests converge at Senate hearing

The US Senate Judiciary Committee on Tuesday once again delved into the issue of music file sharing on the Internet, in a hearing that featured the Napster . Chief Executive Officer Hank Barry, AOL Time Warner (AOL) co-Chief Operating Officer Richard Parsons, and musician Don Henley, as well as other recording industry representatives and artists.

The hearing was one of a series that the committee has held in its oversight capacity regarding protection of intellectual property and copyright. The committee has in previous hearings expressed concern over Napster and similar services that allow for sharing of copyright-protected music files without, at least in the past, payment schemes for artists or record companies.

The committee has also in previous hearings put pressure on the established music companies to come with a solution that provides for distribution of music and protection of copy rights.

However, the deal announced Monday by RealNetworks to launch a platform for online music subscription services in conjunction with three of the big five music labels seemed to have taken the heat off of the representatives of the major music companies at Tuesday's hearing. RealNetworks' MusicNet will combine the music assets of Bertelsmann, EMI Group and AOL Time Warner. The companies' music subsidiaries -- EMI Recorded Music, BMG Entertainment , and Warner Brothers Music Group -- will each license their music to MusicNet. Asked when MusicNet would start offering music on the Internet, Parsons replied that the service would start being marketed in late summer or early fall. Though initially music offered by the service would be restricted to music licensed by the companies involved in the deal at the moment, the goal is "to have access to all the music," Parsons said.

Despite word from some of the major companies at the hearing that a solution to protecting copyrights of digitally distributed music is imminent, musician Don Henley said, "We still don't know how this money is going to be distributed ... we don't know how our intellectual property is going to be protected."

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

Napster's Barry fielded a number of questions, and reported that the company was 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 that he has heard that up until recently "things are available on the service that shouldn't be there."

"We are in compliance with that [court] order," Barry said, but also added "we are working to make it better." Barry reported that Napster has cut down the number of music files able to be swapped by the service, from a total of 375 million, to 100 million. Napster has a distributed architecture, he pointed out, and thus one of the major challenges that the company has is that it has to wait until a Napster user logs on before it can detect which music files the user has downloaded from the service, or has available for download.

Early last month US District Court Judge Marilyn Hall Patel in San Francisco issued a modified injunction, saying it was up to the music labels to identify copyright infringements, but nevertheless ordering Napster to remove unauthorized songs within three days after copyright holders supply details about infringements. Judge Patel issued the injunction at the direction of the US Court of Appeals for the Ninth Circuit, which found that Napster aids in the massive infringement of record labels' copyrights. In the hearing Tuesday, Berry said he was not asking the court to take the company's word that it was complying with the new injunction, but that the company would work with independent technical advisors appointed by the court, which would ensure that Napster is in compliance with the court order.

The Senate Judiciary Committee can be reached at +1-202-224-5225 or found on the Web at http://www.senate.gov/~judiciary/.

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