Senators: Settle Download Issues Or Face Intervention

A U.S. Senate committee took up the issue of digital downloads yesterday (July 11) in a well-publicized hearing attended by rock stars, label executives, and Internet entrepreneurs.

At the hearing, Senate Judiciary Committee chairman Sen. Orrin Hatch, R-Utah, and Sen. Patrick Leahy, D-Vt., the committee's ranking minority member, urged the music industry and digital-downloading businesses to work out a fair licensing arrangement or face the possibility of imposed federal laws. "If you don't develop 'voluntary' licensing," warned Leahy, "then we might have to consider statutory licensing. Think about that. You might not agree to my solution, but some solution is needed. This [digital download development] is a whole different world."

"I feel legislation should be part of this soon," said Metallica's Lars Ulrich, who pleaded with lawmakers to take action. "We're all dreaming if we think this can be worked out between us. The divisions are too deep." Metallica is embroiled in a copyright-infringement lawsuit with music file-sharing company Napster.

RIAA president/CEO Hilary Rosen, Sony Music president of new technology and business development Fred Ehrlich, EMusic president/CEO Gene Hoffman, Roger McGuinn of the Byrds, Napster CEO Hank Barry, and MP3.com chairman/CEO Michael Robertson were among those who attended the hearing, dubbed "The Future Of Digital Music: Is There An Upside To Downloading?"

Sen. Dianne Feinstein, D-Calif., accused Napster of circumventing intellectual copyright law. "You're setting up a technique that could be applied across any kind of written or spoken intellectual property," she said. But Barry defended the service, saying, "We think that these 20 million people are not infringing copyright."

McGuinn defended the use of the Internet to promote and sell music and credits it with increasing attendance at his concerts. He also revealed that other than small advances, he never received royalties for his groundbreaking Byrds albums and subsequent albums, but has a fair deal now that he releases new recordings via MP3.com. "I get 50%," McGuinn said. "The artists doesn't always get the royalties from the record companies."