"Today’s announcement underscores one key fact: The real questions about Napster’s future are economic, not technical or legal."
——Hank Barry
P2P Service Embraces DRM, Gets Boost From DC; Patel Appoints Mediator
Judge Marilyn Hall Patel, who authored the "overbroad" injunction against Napster that the Appeals Court ordered modified, has appointed a mediator to host discussions between litigants in the case and representatives of the netco, according to the 2/26 issue of Newsweek.

Patel has named Eugene Lynch, an ex-federal judge, to the post, the newsweekly reports, and meetings are already underway.

This latest development follows rumblings in the Senate in support of the public's right to file-sharing and an insistence that the music industry actively negotiate with Napster to hammer out a legal solution to the dispute.

When Patel will issue the modified injunction, and what bearing Lynch's appointment has on that process, remains unknown.

The MP3 swappery, fresh from launching the latest version of its peer-to-peer client software, announced on 2/16 that it had settled on a security structure for the licensed version of its service.

This presumably strengthened the online superpower's claim that it was pursuing an industry-friendly alternative to its current no-holds-barred free service.

Napster calls the system—which will be implemented by Digital World Services, a subsid of its rehab sponsor, Bertelsmann—a "key building block" of a business model that will compensate rights-holders and protect content from unauthorized circulation.

According to a release, DWS technology will allow users to share files but will add "protection layers" as files are transferred—and may be used for such nefarious purposes as preventing users from burning downloaded files onto CDs.

"Today's announcement underscores one key fact: The real questions about Napster's future are economic, not technical or legal," Napster CEO Hank Barry declared. "Our alliance with Bertelsmann and the Bertelsmann eCommerce Group was our first important step toward a model that makes payments to artists, songwriters and other rights-holders.

"The solution is further evidence of the seriousness of our effort to reach an agreement with the record companies that will keep Napster running, reliable and enjoyable," Barry added. "Now if you'll excuse me, I have to go download some live Skynyrd before all this bogus security shit goes down."

Despite the claims of a wondrous "new security architecture" devised by DWS—which has a background in digital rights management (DRM) but claims not to be using the technology associated with DRM in the past—observers wonder how secure the new Napster will actually be, given the presence of so many code-manipulating prodigies in the file-swapping world.

But even if the technology does what it claims it will do, will the resulting Napster really still be Napster? After all, a big part of the appeal of a peer-to-peer community is the ability to swap files. If I'm hampered in my ability to share music once I've downloaded it, can it still be called file-sharing? And will users actually pay for a system that won't even let them burn CDs with their downloaded music? Are they expected to buy CDs and buy MP3s of the same music? If so, why not just rip the CDs into MP3 files?

We'll have to wait and see. In the meantime, however, the political fallout from the Appeals Court decision continues. Though the Court sent the injunction back to 9th Circuit Court Judge Patel for revision, it confirmed Napster's vicarious culpability for infringement. Even so, it placed the burden of documenting individual infringements on rights-holders.

Yet political players like Utah Senator Orrin Hatch, a Napster advocate, conservative critic of the music industry and songwriter, have hinted that the government might get involved to protect the public's right to swap.

Hatch and a colleague from across the aisle, Patrick Leahy (D-VT), today released their High Technology and Intellectual Property legislative agenda to the Technology Law Journal newsletter. Among the issues it will address are consumer privacy in the online sphere and whether "encryption policy negatively affects the growth of e-commerce."

But Hatch was also at pains to underscore his concern that "intellectual property or content power is not leveraged into distribution power, or otherwise used in anticompetitive ways."

Such remarks follow on Hatch's more direct remarks about Napster. "The Napster community represents a huge consumer demand for the kind of online music services Napster, rightly or wrongly, has offered and, to date, the major record labels have been unable to satisfy," Hatch trumpeted on the Senate floor on 2/15, prompting a laudatory statement from Napster's Barry.

Napster recently hired a former Hatch aide, Manus Cooney, as a Washington lobbyist.

Now that Napster has made a public proclamation about its security plans—even if it raises more questions than it answers—the industry may be under increasing heat from politicos like Hatch to cut deals with the netco.

Another Capitol Hill denizen, Democratic Congressman Rick Boucher, has suggested Congress might design a special compulsory license for online music.

Meanwhile, the home page of Napster's latest client software urges users to contact their representatives in Washington to protect their fundamental right to get NSYNC songs for free.

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