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UPGRADE | HIAWATHA BRAY

A swan song for the music industry

Three judges on a federal appeals court in California made it official last week: The traditional recorded music business is doomed.

Yes, there's still the US Supreme Court, one last way station on the road to the abyss. But it's unlikely that those nine justices will undo the work of their West Coast colleagues. Last week's ruling in the Grokster case was lucid, logical, and unanimous. Peer-to-peer file-sharing programs like Grokster, Kazaa, LimeWire, and all the rest, used by millions worldwide to exchange pirated copies of music and movies, do not violate federal copyright law. The users of these programs may face prosecution for swiping the files. But the makers of the software are in the clear.

For those of us who despise the file-swappers as larcenous hypocrites, it's not a happy verdict. But it's well nigh impossible to dispute it. The judges simply pointed to a crucial 1984 Supreme Court decision that protected the rights of Americans to own videotape recorders. The movie industry scowled that these devices would enable people to practice a lively trade in pirated movies. The court responded that VCRs could also enable a fellow working the night shift to watch "The Waltons" when he got home. And because the technology had "substantial noninfringing uses," VCRs could not be banned, even if they could also be used for illegal purposes.

The so-called "Betamax case" liberated technologists to create CD and DVD burners, portable MP3 music players, and music-ripping software, secure in the knowledge that they couldn't be sued for it.

Alas, it also provided running room for the Groksters and Kazaas of the world. The managers of these companies know full well that their products encourage music theft, but insist upon pretending, like Sergeant Schultz, that they know nothing.

Well, now it doesn't matter what they know. As long as their software has legitimate uses, as well as corrupt ones, it's legal.

Republican Senator Orrin Hatch of Utah must have seen this coming. Hatch went out on a limb a few months back, proposing a federal law that would ban products that sought to "induce" copyright violations. In this space, I defended Hatch against the scorn of outraged technologists, who insisted the new law would have stifled the invention of the Apple iPod and other tech goodies.

But I changed my mind when Marybeth Peters, the chief of the US Copyright Office, praised the Hatch bill because it would undermine the Betamax case. If that happened, the next generation of digital marvels would be buried in an avalanche of injunctions, depositions, and discovery motions. No thanks, Marybeth. We'd rather learn to live with digital thievery.

The Electronic Frontier Foundation, an Internet civil liberties group, plotted the file-swappers' victorious legal strategy. The foundation also has a plan for the future of recorded music, a plan that gives artists and producers a hope of collecting at least some money for their work.

It's simple, really. Everybody who uses peer-to-peer software would pay a nominal monthly fee into a fund owned by the music industry. The foundation figures $5 a month. After all, those who pay are now allowed to download all the music they want. And there'd be no restrictions on what they could do with the files. They could make as many copies as they wanted, and play them on any device. Meanwhile, a computer would keep track of which tunes were downloaded, and the money in the fund would be doled out in the right proportions to artists and publishers around the world.

It's not a particularly radical concept; it's how radio and TV stations pay royalties to the music companies. The foundation estimates that about 60 million Americans currently swap music files, and that most of them would gladly pay a measly $5 a month to become law-abiding citizens. That works out to around $3.6 billion a year, without the cost of producing physical CDs.

The music makers have sneered at this idea for years, but that was before the federal courts had their say. Right about now, the EFF plan might look pretty good.

By the by, not all peer-to-peer software is a license to steal. Check out Mercora, an impressive new program that turns any PC into an Internet radio station.

A beta-test version of the software is online for free downloading at www.mercora.com. Once installed, it scours your computer for music files, then automatically broadcasts them in streaming audio to anybody who cares to tune in. With a typical home broadband connection, a user can handle four or five listeners at once. And it's perfectly legal, because the files aren't copied, merely played back.

Mercora cofounder Atri Chatterjee laments that existing copyright law sets onerous restrictions on his service. You can connect to another Mercora user and see all of the music files on his server, but you can't request individual tunes; believe it or not, that's illegal. The software simply plays all of the music on a user's computer, one song after another. And you can't play three songs in a row from a single album, or four songs from the same artist in a three-hour period, again because of copyright law.

Chatterjee hopes to negotiate deals with record companies that would ease these restrictions and make Mercora even cooler than it is today. But the existence of such moronic laws goes a long way to explaining why millions of Internet users so happily flout them. And thanks to the federal courts, that digital crime wave will just keep rolling along.

Hiawatha Bray can be reached at bray@globe.com. 

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