By Robert Menta 8/18/02
Last Friday the major record labels initiated a lawsuit against the leading Internet service providers (ISP) for contributory copyright infringement. The ISPs, the suit contends, are allowing free access to websites throughout the world that allow the free trading of copyrighted material. This, they claim, make the ISPs accomplices in music piracy.
The labels are looking to legally force these providers to block all international traffic that they don't approve of. The goal is to get the courts to agree that import/export laws can apply to digital goods transferred over the Internet just like goods brought in by sea and air. If the labels can set a precedent here, any digital transfer of information can be regulated and blocked when native industries feel threatened.
US Customs for the Net.
In the analog world, trade restrictions worked for the steel industry in the face of superior - and cheaper - Japanese steel. The question is who is going to play the role of Customs for the Net?
The federal government may do it for air and shipping, but because of the lattice nature of an ever-evolving Internet it is highly unlikely, as well as impractical, for the government to even attempt to impose such a structure online right now. It doesn't mean it won't happen at some point, it probably will. But I suspect it will be a long wait before the Feds jump in here. The record industry doesn't like to wait.
The major ISPs do have the at least some ability to regulate the flow of traffic on the Net as most of it runs between their servers. They have been wisely resistant to playing the expensive and difficult role of policing the Web, but in the post-dot com bust they are also shy of lengthy court actions.
The site that the labels are suing to be blocked is Listen4ever.com. Based in China, Listen4ever is an example of the expatriation of online music we predicted last year with the collapse of the American Net music industry through industry lawsuits, bad business decisions, and the popping of the Internet bubble.
The Net knows no borders and since in other countries a site like Listen4ever can be quite legal, it is difficult to control online imports under US laws alone. Therefore, to prevent its wares from breaching American shores in both directions, the music industry is putting pressure on the ISPs to be more than an open faucet.
The danger here is that control of a piece of Net commerce would not fall under government regulation, but under the auspices of an oligopoly. An industry that, if successful, would have power to choke off both bad and good sites at its own whim.
"Listen4ever has clearly located itself in China to avoid the ambit of United States copyright law," said the suit.
The above statement is accurate. Another accurate statement is the gambling industry has circumvented the laws of many states by opening up casinos on Indian land. Donald Trump wants to close all Indian casinos to the protect profits on own casinos in Atlantic City. Should he be allowed to?
The thing is, this is a matter for the US Department of Commerce with regard to international trade. They are the ones who should regulate E-Commerce on US shores if it must be regulated . I'm sure the Record Industry Association of America (RIAA) is banging on their door too, but as I mentioned before the government is not always the fastest to act.
The Internet is a heck of a thing to regulate too, especially since next week a dozen new sites in various countries can open for business and mimic Listen4ever's efforts. That's the reason why the record labels want to force the ISPs to do it, they are the only ones who have a reasonable shot of doing it effectively.
The strategy of pinning the ISPs through the courts can be an effective one in that the named companies are troubled and more apt to seek the path of least resistance. It is easier to block a website than it is to be embroiled in years of expensive litigation, especially when your industry is in such turmoil as the recent WorldCom fiasco keenly displays.
Of course, how easy is it when one Web site becomes a thousand sites? 10,000? 100,000? How easy is it when the Fortune 2000 joins the record industry's lead to block sites they don't like.
The ISPs named in the suit are Sprint, AT&T Broadband, Cable & Wireless, Advanced Network Services, and WorldCom subsidiery UUNet Technologies. All of these corporations have far far bigger concerns right now than file trading, solvency being the most prominent of them.
The question is will they fight or just capitulate? Several days after writing this article the RIAA dropped its suit because evidence showed that Listen4ever was shut down. This doesn't mean they don't still want the ISPs to play gatekeeper. It just means that with the site gone there is no case anymore and a judge would only dismiss it. The event has bought the ISPs some time, but The RIAA will try again when the circumstances are right.
The Apple iPod for Windows is available on Amazon in 10MB and 20MB versions.
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