Senators Hammer File-Sharing Nets
By Bill McConnell -- Broadcasting & Cable, 7/28/2005 12:38:00 PM
The chairman of the Senate Commerce Committee Thursday issued a stern warning to operators of file-sharing networks and Internet service providers that Congress will impose penalties on them if the industries don’t do more to stop illegal downloading of music, movies and TV shows.
“We are going to be watching,” said panel chairman Ted Stevens, adding that he is disappointed file sharing companies haven’t done more in the wake of the Supreme Court’s Grokster decision holding P2P liable for copyright violations if they encourage copying without compensation of the artists, record labels and studios that produced the content.
“We’ve got to find some way of protecting our intellectual property. We can’t expect people abroad to protect our intellectual property if we can’t protect it at home,” he said during a hearing on the impact of the Grokster case.
The Alaska Republican's warnings were echoed by senators Daniel Inouye, D-Hawaii, and Barbara Boxer, D-Calif., with Boxer and Stevens particularly agitated about the potential for kids to download porn.
The High Court in June ruled that file-sharing networks such as Grokster may be held liable for copyright violation if they encourage or “induce” users to make illegal downloads.
The ruling still leaves substantial room for illegal conduct to continue, however, as long as operators of file-sharing networks don’t actively promote the copyright violations.
Boxer said Congress will eliminate that loophole if network operators don’t close it on their own. She also lambasted file-sharing operations for not doing more to make sure children logging on to their networks are protected from pornography posted on the sites.
“In a year’s time if you have not moved to protect copyrights, to protect children, it’s not going to sit well regardless of what the court said.”
Despite the lawmakers’ threats, Hollywood joined the P2P and Internet providers in urging Congress to wait and see how the Grokster ruling plays out.
“We believe the court struck the right balance and Congress should leave well enough alone,” said Mitch Bainwol, chairman of the Recording Industry Association of America. “Technology companies are happy, content providers are happy. The court did the right thing. Let’s let it go and see what happens.”
One of the things RIAA is waiting on is the outcome of lawsuits it filed against hundreds of downloaders. Only days after the court’s June 27 decision, an emboldened RIAA filed suit against 784 users of Grokster, Kazaa and Limewire P2P services.
On the other side of the fight, technology companies say innovation could be stifled if developers and investors in legal products are held liable for other's unlawful actions. They maintain that record labels are resisting consumer demand for one-song-at-a-time downloads in order to protect the age-old practice of forcing purchases of entire albums loaded with extra songs many listeners don't want.
Adam Eisgrau, executive director of P2P United, a trade group for file-sharing operations, said the best solution to reducing illegal downloads is to establish a voluntary licensing regime similar to the once administered for music played on the radio.
“You can’t take the provider of the pipe and make them the policeman,” said Dave Baker, Earthlink vice president of law and public policy.
If investors are held liable when legal technology they have funded is used for illegal purposes, it could have a negative effect that could dampen not only investments in entertainment but also healthcare and other critical sectors of the economy, warned Mark Heesen, president of the National Venture Capital Association.
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