NEW NAPSTER! NEW APPLE STORE! NEW PRISON TERMS!

Don’t worry—the RIAA won't be hounded in the press for sending some file-swapping kid to the penitentiary. The culprit in question was selling pirated CD and tape compilations online, for which a District of Columbia court awarded the offender a six-month term in the clink and a $3,000 fine.

Other legal penalties for piracy will soon follow, especially given the guilty pleas, by four people involved in the notorious "warez" network, to massive, unauthorized online distribution of copyrighted material.

It's good to know the sheriff's on the case, because CD "copy protection" lost another vestige of its credibility this week. A graduate student discovered, according to a piece on Digital Media Wire that quickly went everywhere, that SunnComm's vaunted MediaMax CD3 anti-piracy software on BMG releases could be defeated by holding down the shift key when the disc is inserted into a PC's CD-ROM tray. Ouch! Fortunately, holding down a key while inserting a CD is simply too much effort for most pirates.

Meanwhile, U.S. House of Representatives voted Wednesday (10/8) to order government computers that use peer-to-peer networks for information exchange to protect said computers and information from hackers and other intruders. Viruses, worms and "spyware" could imperil vital government info or get unlawful access to citizens’ private information, worry sponsors like Reps. Henry Waxman (D-CA) and Tom Davis (R-VA).

Could legal sanctions against underground dissemination and government "action" on P2P mean a new era of legitimate digital music is at hand?

Garsh, it’s hard to say. But there are some intriguing signs on the horizon.

First, Apple is teasing the impending Windows launch of its lauded iTunes Music Store, which will most likely be the subject of a company unveiling on 10/16. Given the strong initial consumer response and positive media that followed the a la carte download outlet’s Mac debut, the Windows rollout will be closely watched. TV spots for iTunes now say "for Mac and PC."

Then there’s the anticipation surrounding the launch, scheduled for 10/29, of Napster 2.0, another Windows-based download store (following in the footsteps of BuyMusic.com, MusicMatch and others). Though Napster was once the scourge of the industry—as the first popular file-sharing program—its new incarnation hopes to be part of the solution.

Like iTunes, Napster will charge 99 cents per track and $9.99 per album, but the company has also been amassing a catalog of exclusive live performances. Users who "pre-register" for the service will receive five free tracks.

Contrary to the expectations of many insiders, the Napster brand—including its notorious "kitty" logo—has retained credibility among online music fans, even though it now belongs to The Man (CD-burning software maker Roxio, which purchased the assets of Napster and former major-label JV pressplay).

Indeed, a CNET online poll shows a decisive majority of participants picked the new Napster as the download vendor most likely to steal marketshare from Apple’s Windows store.

Another is the good Q3 news from Yahoo! The netco reported a surge in advertising and improved earnings, and reports say its alliance with SBC is giving that company an edge in its cable business. Affiliated music service Launch, meanwhile, has shown it can help brand artists with consumers and has an active online community.

Also on the online music tip, much talk swirls around ways to make peer-to-peer an engine for commerce rather than free trading. CNET trumpeted the pending service Mercora, which will encode files in Windows Media and preserve the community feeling of P2P while forcing users to pay for licensed content. It hasn’t yet been unveiled, but it sure sounds interesting.

Meanwhile, there’s reportedly confidence among some insiders that eventually labels and other copyright holders will agree to a "two-tier" digital commerce system whereby lower-quality files for swapping are subject to a compulsory license. It’s an uphill battle that may gather momentum as things go, um, downhill.

One thing’s for sure: Kids are gonna swap. If we can make ’em pay for stuff while they do, shouldn’t we go for it?