At the time, Napster had some 20 million users worldwide and was essentially the de-facto file-sharing standard. Had the RIAA labels agreed to the alliance, they might have turned peer-to-peer distribution into a new and powerful business model, one with low distribution and marketing costs and a fast developing user base. But they didn’t. They chose another route.

Big mistake. Along came Gnutella. And increased broadband penetration and cheaper storage. Along came Kazaa. And then came BitTorrent. And, well, look at the industry now.

Given such history, it’s difficult to look at the recording industry’s plan to have a monthly fee added to consumers’ internet-service bills and not shake your head in wonderment.

Portfolio.com reports that Edgar Bronfman Jr.’s Warner Music Group (TWX) has indeed hired veteran industry consultant Jim Griffin (no relation to Peter, right?) to quarterback a plan under which consumers pay an Internet-access surcharge of $5 a month for the collective right to freely share music. Those fees would be pooled and divvied up among artists and their labels.

“Ideally, music will feel free,” says Griffin. “Even if you pay a flat fee for it, at the moment you use it there are no financial considerations. It’s already been paid for.”

Ah- charge everyone for all music. So it is Monetization Without Representation. OK. But what gives the music industry the right to tax all broadband users because it suspects some of them might illegally share its content? And if the music industry deserves that right, then doesn’t the film industry deserve it as well? And the publishing industry? And any other industry that might benefit from such a tax?

As David Barrett, engineering manager for peer-to-peer networks at Web content-delivery giant Akamai (AKAM), notes Griffin’s plan is problematic. And desperate.

Said Barrett:, “It’s too late to charge people for what they’re already getting for free. This is just taxation of a basic, universal service that already exists, for the benefit a distant power that actively harasses the people being taxed without offering them any meaningful representation.”

At the time, Napster had some 20 million users worldwide and was essentially the de-facto file-sharing standard. Had the RIAA labels agreed to the alliance, they might have turned peer-to-peer distribution into a new and powerful business model, one with low distribution and marketing costs and a fast developing user base. But they didn’t. They chose another route.

Big mistake. Along came Gnutella. And increased broadband penetration and cheaper storage. Along came Kazaa. And then came BitTorrent. And, well, look at the industry now.

Given such history, it’s difficult to look at the recording industry’s plan to have a monthly fee added to consumers’ internet-service bills and not shake your head in wonderment.

Portfolio.com reports that Edgar Bronfman Jr.’s Warner Music Group (TWX) has indeed hired veteran industry consultant Jim Griffin (no relation to Peter, right?) to quarterback a plan under which consumers pay an Internet-access surcharge of $5 a month for the collective right to freely share music. Those fees would be pooled and divvied up among artists and their labels.

“Ideally, music will feel free,” says Griffin. “Even if you pay a flat fee for it, at the moment you use it there are no financial considerations. It’s already been paid for.”

Ah- charge everyone for all music. So it is Monetization Without Representation. OK. But what gives the music industry the right to tax all broadband users because it suspects some of them might illegally share its content? And if the music industry deserves that right, then doesn’t the film industry deserve it as well? And the publishing industry? And any other industry that might benefit from such a tax?

As David Barrett, engineering manager for peer-to-peer networks at Web content-delivery giant Akamai (AKAM), notes Griffin’s plan is problematic. And desperate.

Said Barrett:, “It’s too late to charge people for what they’re already getting for free. This is just taxation of a basic, universal service that already exists, for the benefit a distant power that actively harasses the people being taxed without offering them any meaningful representation.”

Why would anyone agree to such a thing? For their personal enrichment, of course. “I don’t think you can estimate the educational benefit of these things. … A lot of this is basically letting people know that what they’re doing is not OK,” Sherman reasoned. “And for a lot of people that makes a difference in their behavior.”

A bit of stretch, even for Sherman, as Ars Technica aptly notes: “Filtering as a concept is ultimately doomed by encryption unless the ‘filters’ simply block entire protocols altogether, and talking about the consumer benefits of installing RIAA-approved filtering software is just another sign of how ludicrous the entire debate has become.”

Why would anyone agree to such a thing? For their personal enrichment, of course. “I don’t think you can estimate the educational benefit of these things. … A lot of this is basically letting people know that what they’re doing is not OK,” Sherman reasoned. “And for a lot of people that makes a difference in their behavior.”

A bit of stretch, even for Sherman, as Ars Technica aptly notes: “Filtering as a concept is ultimately doomed by encryption unless the ‘filters’ simply block entire protocols altogether, and talking about the consumer benefits of installing RIAA-approved filtering software is just another sign of how ludicrous the entire debate has become.”

The RIAA and its online counterpart, the Digital Media Association, have petitioned the Copyright Royalty Board to slash the so-called mechanical royalties paid to musicians and music publishers for digital downloads, subscription music services and ringtones. Seems the RIAA and DiMA feel they’ve suffered unfairly during the transition to digital distribution and they’d like artists to share in their misery.

The National Music Publishers’ Association, noting the favorable economies of digital distribution, asks for a royalty of 15 cents per track for permanent digital downloads. The RIAA argues that a royalty of approximately 5 cents to 5.5 cents per track is more reasonable. The DiMA–which represents Apple, Amazon and RealNetworks, among others–suggests cutting that royalty further still.

Find that astonishing? Just wait; it gets worse. For streaming music services, the NMPA proposes a rate of the greater of 12.5% of revenue, 27.5% of content costs, or a micro-penny calculation based on usage. The RIAA finds 0.58% of revenue more reasonable. And the DiMA says there really shouldn’t be any royalty at all. “Fundamentally, this fragile marketplace is showing signs of promise, but it cannot be saddled with additional, excessive costs,” the DiMA argues. “The board should be careful not to impose a royalty that kills the proverbial goose and deprives songwriters and publishers of their golden egg.”

An interesting choice of metaphor and one in which the DiMA and RIAA might easily figure as the giant at the top of the beanstalk:

Fee! Fie! Foe! Fum!??
I smell the blood of a musician.
Be he ‘live, or be he dead,
I’ll grind his bones to make my bread.”

Grind his bones to make my bread, indeed.

Said Rick Carnes, president of the Songwriters Guild of America: “Our opponents have to recognize that this rate-setting is not a matter of gamesmanship for songwriters, but rather one of survival. As I stated in my testimony, in response to a question from those seeking to cut the mechanical royalty rate in half and to denigrate the importance and contribution of professional songwriters to the music industry, ‘Yes, songs are plentiful, just as rocks are plentiful. But if you want diamonds, you are going to have to pay the miners a living wage.’ “

The DOJ says the $222,000 in damages awarded to the Recording Industry Association of America in the Virgin Records America et al. v. Thomas copyright-infringement case is constitutional. Seems it didn’t quite buy Thomas’s argument that fining someone – particularly a single mother of two – $222,000 for songs that could be bought for $24 on iTunes violates a Supreme Court precedent that prohibits fines that are “so severe and oppressive as to be wholly disproportioned to the offense or obviously unreasonable.”

From the DOJ’s brief:

Although defendant claims that plaintiffs’ damages are 70 cents per infringing copy, it is unknown how many other users–‘potentially millions’–committed subsequent acts of infringement with the illegal copies of works that the defendant infringed. Accordingly, it is impossible to calculate the damages caused by a single infringement, particularly for infringement that occurs over the Internet. Furthermore, plaintiffs contend that their witnesses ‘testified to the substantial harm caused by the massive distribution of their copyrighted sound recordings over the Internet, including lost revenues, layoffs and a diminished capability to identify and promote new talent…’

“Most recently, Congress has crafted a statute that serves as a deterrent to those infringing parties who think they will go undetected in committing this great public wrong, as well as providing compensation to copyright owners who have to invest resources into protecting property that is often unquantifiable. Accordingly, given the findings of copyright infringement in this case, the damages awarded under the Copyright Act’s statutory damages provision did not violate the due process clause…”

Something like X times Y, to the power of Z–where X is the lack of a sustainable business model, Y is an aggravated response to a nonexistent threat, and Z is the inability to differentiate between customers and thieves.”

–Toronto Globe and Mail writer Mathew Ingram explains the formula used to calculate damages in Virgin Records America et al. v. Thomas.

We’re never going to hear the end of it now …

The recording industry won its first ever file-sharing suit to go to trial yesterday, when a federal jury found 30-year-old Jammie Thomas liable for copyright infringement. The jury awarded the six record labels involved in the case a total of $220,000, or $9,250 for each of the 24 songs they claimed Thomas uploaded.

Seems it was far easier for the labels to sell the jury on their investigative methods than you might think–especially after the presiding judge ruled that no proof was needed that anyone actually downloaded the songs at issue in the case–simply making them available constituted distribution.

Emboldened by the ruling, the Recording Industry Association of America took a break from sending prelitigation settlement letters to college students to issue this gloating statement: “The law here is clear, as are the consequences for breaking it. When the evidence is clear, we will continue to bring legal actions against those individuals who have broken the law. This program is important to securing a level playing field for legal online music services.”

Reading that you’d never think it’s been eight years since Napster, would you? Eight years. Anyway …

Attorney Ray Beckerman, writing in the Recording Industry Vs. the People blog, called the verdict “one of the most irrational things” he’s ever seen in law. “A verdict of $222,000, for infringement of 24 song files worth a total of $23.76?” he asked. “In a case where there was zero evidence of the defendant having transferred any of those files? It is an outrage, and I hope it is a wakeup call to the world that we all need to start supporting the defendants in these cases, and the attorneys who are sacrificing so much to represent them. And the support cannot be with words, it must be with checkbooks. And it cannot be next year, it must be now.

“All the businesspeople who make a living from the vibrancy, democracy and freedom of expression which is the Internet need to get behind the RIAA’s victims; if they do not, the world in which they hope to thrive and prosper will disappear rapidly.

“The RIAA ghouls smelled blood in Duluth, and I guess they were right.”

Something like X times Y, to the power of Z–where X is the lack of a sustainable business model, Y is an aggravated response to a nonexistent threat, and Z is the inability to differentiate between customers and thieves.”

–Toronto Globe and Mail writer Mathew Ingram explains the formula used to calculate damages in Virgin Records America et al. v. Thomas.

We’re never going to hear the end of it now …

The recording industry won its first ever file-sharing suit to go to trial yesterday, when a federal jury found 30-year-old Jammie Thomas liable for copyright infringement. The jury awarded the six record labels involved in the case a total of $220,000, or $9,250 for each of the 24 songs they claimed Thomas uploaded.

Seems it was far easier for the labels to sell the jury on their investigative methods than you might think–especially after the presiding judge ruled that no proof was needed that anyone actually downloaded the songs at issue in the case–simply making them available constituted distribution.

Emboldened by the ruling, the Recording Industry Association of America took a break from sending prelitigation settlement letters to college students to issue this gloating statement: “The law here is clear, as are the consequences for breaking it. When the evidence is clear, we will continue to bring legal actions against those individuals who have broken the law. This program is important to securing a level playing field for legal online music services.”

Reading that you’d never think it’s been eight years since Napster, would you? Eight years. Anyway …

Attorney Ray Beckerman, writing in the Recording Industry Vs. the People blog, called the verdict “one of the most irrational things” he’s ever seen in law. “A verdict of $222,000, for infringement of 24 song files worth a total of $23.76?” he asked. “In a case where there was zero evidence of the defendant having transferred any of those files? It is an outrage, and I hope it is a wakeup call to the world that we all need to start supporting the defendants in these cases, and the attorneys who are sacrificing so much to represent them. And the support cannot be with words, it must be with checkbooks. And it cannot be next year, it must be now.

“All the businesspeople who make a living from the vibrancy, democracy and freedom of expression which is the Internet need to get behind the RIAA’s victims; if they do not, the world in which they hope to thrive and prosper will disappear rapidly.

“The RIAA ghouls smelled blood in Duluth, and I guess they were right.”

The case is Virgin Records America et al. v. Thomas, and it pits Jammie Thomas, a single mother of two from central Minnesota, against the RIAA, which claims she distributed more than 1,700 audio files on file-sharing site Kazaa in 2005. Thomas could have settled out of court for $3,000–perhaps even through the RIAA’s handy online settlement processing site, but refused, protesting her innocence. Now, she faces a potential liability of $3.9 million in damages, plus legal fees.

“The plaintiffs don’t have the evidence that she downloaded anything,” Thomas’s attorney, Brian Toder, told jurors yesterday. “The best that they can come up with is somebody out there in cyberland … offered on Kazaa some copyrighted material.” His point: while the RIAA has the Internet protocol address it claims was used to illegally share the songs at issue in the case, it must demonstrate that Thomas was actually using it in order to win the case. And that may well prove difficult.

“In sum, the case will be the first test of the RIAA’s ability to sell a jury on its investigative methods, which have a degree of imprecision because of the anonymous nature of the Internet,” writes Jon Healey of the Los Angeles Times. “Internet protocol addresses aren’t painted on the side of a computer like a street address, and even if the RIAA were able to trace a shared file back to a specific PC or Mac, it’s not easy to prove who was sitting at the keyboard. It will also be the first chance for a judge to instruct a jury on the legality of making songs available for others to download. And it will be the first time a jury will weigh whether to bring the hefty penalties provided under copyright law down on a consumer–in Thomas’s case, one who probably spends more on music than its members do.”

A bit of background: In 2006 the RIAA sued Pamela and Jeffrey Howell for copyright infringement, accusing the pair of “making copyrighted works available” over a peer-to-peer network. The RIAA had no evidence that the Howells ever transferred content to a third party. It did, however, have screen shots of their Kazaa account. And that was proof enough for the court to grant its motion for summary judgment against them. “It is no defense that a Kazaa user did not directly oversee the unauthorized distribution of copyrighted material,” the judge wrote, noting that “the mere presence of copyrighted works in a shared folder is enough to trigger liability.”

So even though the RIAA couldn’t prove the Howells distributed files illegally, the mere fact that they owned a computer with a shared-files folder on it that contained copyrighted files “made available” over an Internet connection was enough to constitute infringement of the “distribution” rights under the Copyright Act.

Essentially, the Howells have been found criminally liable for what they might have done. Which is an unsettling thought in a Dick-ensian (Philip K.) sort of way. But not for the RIAA which, thanks to this ruling, no longer has to work quite so hard to provide proof of violation in these cases.

“Plaintiffs wish to establish two violations of copyright law when a person both downloads and uploads sound recordings via the Internet,” the Computer & Communications Industry Association and US Internet Industry Association wrote in an amicus brief filed in Elektra v. Barker, another RIAA “making available” case. “Proof of the download violation may be relatively straightforward when a plaintiff can establish that a recording has been copied to a person’s computer. Proof of a violation by uploading cannot, however, be established merely by showing the availability of files for potential uploading. A plaintiff must establish a connection to someone else’s actual download. That requires a plaintiff to establish a connection between an uploader and a corresponding downloader, to establish the facts of an actual transaction between the two. Although such proof may require investigation, a plaintiff should not be relieved of its burden. Since copyright holders may (and often do) seek statutory damages of up to $150,000 per work infringed, see 17 U.S.C. §504(c)(2), without having to prove actual harm, for such remedies they should be required to furnish allegations and proof of actual violations.

“The remedies provide an adequate incentive for a proper investigation. Amici believe that plaintiffs want to invoke the concept of ‘making available’ instead of the statutory elements of a section 106(3) distribution because plaintiffs perceive that the investigations needed for proper allegations and proof of uploading liability (as contributory infringement liability for another’s download) are burdensome.”