Lawmakers want to legalize MP3.com service

Several U.S. congressmen have introduced new legislation that would legalize the services for which MP3.com faces potentially hundreds of millions of dollars in copyright damages.

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Philip Corwin Attorney, Butera & Andrews   Wonders if MP3.com will get any legal protection with the passage of this new music ownership bill.  • RealAudio • Windows Media

Dubbed the "Music Owners' Listening Rights Act of 2000," the bill would give companies the right to copy CDs, store them online, and stream the songs individually to listeners who could prove they already owned a copy of the CD.

That's almost exactly the service that MP3.com offered to consumers earlier this year, and for which it was sued by the Recording Industry Association of America (RIAA) and the "Big Five" record labels--Sony Music Group, EMI Recorded Music, Bertelsmann's BMG Entertainment, Warner Music Group and Seagram's Universal Music Group. Although MP3.com has settled with four of the five plaintiffs, it still faces the prospect of paying Universal as much as $250 million in damages.

Rep. Rick Boucher, D-Va., and at least three colleagues think that's not a good precedent for the young online music business.

"We believe that the technology, which gives rise to this new convenience, should be encouraged," Boucher said in a floor statement introducing the bill yesterday. "Our legislation will remove legacy copyright restrictions, which were written for a different era and that threaten to strangle the technology in its infancy."

The legislation comes partly at the behest of MP3.com, which has been circulating proposed legislation for some time.

But already it has spooked the copyright owners' groups who have opposed such services. In a joint letter to Congress yesterday, the RIAA, the Motion Picture Association of America, the National Music Publishers' Association, the Songwriters Guild of America and royalty distribution groups ASCAP and BMI warned of the effects of the proposed legislation.

"This legislation is misguided as a matter of public policy and grossly unfair to creators," the groups wrote in their letter. "If MP3.com's proposal were enacted, it would set a precedent for other commercial enterprises to refuse to pay for the transmission and copying of any copyrighted material over the Internet including books, software, movies or video games."

The market is already working to support "locker" services like this, the groups added. Four of the five major labels have already agreed to license their content to MP3.com, and holdout Universal has made a similar deal with start-up Musicbank.

The legislation has almost no chance of being acted on this year. Congress is scheduled to adjourn Oct. 6, and any action taken after that date will be limited to spending authorizations for the federal government.

If passed, the bill could have far-reaching effects in creating online locker systems outside the control of the record companies. But it wouldn't do much to help MP3.com's situation--the lawsuit brought against it is for legal violations made under existing law, and changing a law in the future wouldn't help it escape liability.

MP3.com could not immediately be reached for comment.