Courtesy of Reuters...
Online File-Sharing Networks Set Up Lobbying Shops
Tue July 1, 2003 05:40 PM ET
By Andy Sullivan
WASHINGTON (Reuters) - Internet file-sharing networks that allow users to copy songs for free are organizing to counter mounting pressure from the entertainment industry and Capitol Hill, industry officials said on Tuesday.
"Peer to peer" services including Kazaa, Grokster and LimeWire are hiring lobbyists and setting up trade associations in Washington to convince power brokers in Congress and Hollywood to work with them, rather than demonize them.
Since Napster introduced the concept in 1999, millions of Internet users have logged on to peer-to-peer networks to copy music, movies, software and other files from each others' hard drives, a practice the recording industry says has led to a sharp decline in CD sales.
Record labels have actively pursued the peer-to-peer services in court, and last week announced that they plan to sue individual users as well. Meanwhile, lawmakers have condemned the networks because they make pornography readily available to minors and expose users to viruses, hacking and other security risks.
Peer-to-peer officials say it's time to tell their side of the story.
Entertainment companies "are not going to come to the table until they're forced to," said Grokster President Wayne Rosso. "The only way we can force them to come to the table is to make our users' voices heard in Congress."
Rosso said Grokster and several other peer-to-peer groups will unveil an advocacy group within the next 60 days to argue that they represent a promising new distribution channel for legitimate content, rather than just a conduit for copyright infringement.
Separately, the two companies behind the popular Kazaa network have sponsored an umbrella group that hopes to draw in electronics makers, Internet providers and entertainment companies, as well as other peer-to-peer firms.
The Distributed Computing Industry Association had its first meeting last night in Los Angeles with record-label representatives and other industry players, "and there were no fistfights," Chief Executive Marty Lafferty said.
Though the group only has two dues-paying members so far -- Kazaa owner Sharman Networks and Altnet, which advertises to Kazaa users -- it plans to set up offices in Arlington, Virginia, across the Potomac River from Washington, next week and recruit more members over the next three months, Lafferty said.
Entertainment companies would benefit if they embraced peer-to-peer networks, he said. Much as the satellite-TV industry was able to overcome initial piracy problems and the cable-TV industry convinced people to pay for free television, peer-to-peer networks will ultimately evolve, he said.
The Recording Industry Association of America, which represents the five largest labels, had a skeptical response.
"It seems odd that corporations who purposely facilitate illegal activity for a living are opening a Washington office to advocate their right to do so," the RIAA said in a statement. "This is apparently a reaction to the interest of Congress in the rampant piracy, security and privacy concerns arising from abuse of peer-to-peer networks."
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