Congress vs. File-Sharing

Proposed laws would ban Kazaa, send file sharers to jail

October 14, 2004 12:00 AM ET
Can Washington, D.C., end file-sharing once and for all? Two new bills in Congress target file traders and peer-to-peer networks. The Inducing Infringement of Copyrights Act -- which is expected to be passed by the Senate as early as next week -- could deal a deathblow to networks such as Grokster and Kazaa. And on September 28th, the House passed the Piracy Deterrence and Education Act, which would clear the way to criminally prosecute illicit file traders, with penalties of up to three years in prison.

Since September 2003, the Recording Industry Association of America has sued more than 5,000 people for sharing music online -- including 762 more announced on September 30th. But the PDEA bill, which budgets $15 million to the U.S. Justice Department for the enforcement of copyright infringement, marks the first time that Congress has directed federal authorities to target file sharers. A similar bill passed the Senate in June; President Bush is expected to sign the bill into law.

"It's unnecessarily extreme," says Jason Schultz, an attorney for the Electronic Frontier Foundation, a nonprofit group of lawyers working to protect digital rights. "The RIAA has shown they have all the legal weapons they need to sue file sharers. We don't see a need for the Justice Department to get involved." The PDEA's sponsor, Rep. Lamar Smith, R-Texas, says that illicit file-trading of songs should be as punishable as any other form of theft. "We can all agree that it is wrong to walk into a record store, put a CD in your pocket and walk out," says Smith. "It's just as wrong to illegally download a song from the Internet."

While the PDEA targets users, the Induce Act looks to shut down P2P networks. Senate Majority Leader Bill Frist, Minority Leader Tom Daschle and Sens. Orrin Hatch and Patrick Leahy first sponsored the legislation in June. It addresses a provision in the 1984 Supreme Court case known as Sony-Betamax that allows the makers of copying devices to escape liability for copyright infringement as long as the machines have legitimate uses. "It's a different world today," says an aide to one of Induce's sponsoring senators. "The problem we're trying to address isn't just copying but indiscriminate distribution online." The latest version of the bill was circulated on September 24th and states that corporations should be held liable for any infringing acts "they intend to induce."

Despite RIAA lawsuits, traffic on P2P networks is almost twice what it was a year ago, according to BigChampagne, a company that tracks file-trading. "I can think of nothing finer than a competitive marketplace where P2P is a legitimate distribution model," says Mitch Bainwol, chairman of the RIAA (and Frist's former chief of staff). "But only if we stop those who rely on infringement without payment mechanisms."

Induce has found an unlikely coalition of opponents, including tech companies, universities, libraries and others that acknowledge that copyright infringement is a problem but argue that Induce is so vague as to target legitimate businesses. "Induce is insane," says Wayne Rosso, former president of Grokster, who is currently working on a new file-sharing program. "The courts have said again and again that there are legal uses for P2P applications." Sarah Deutsch, vice president and associate general counsel for Verizon Communications, says that everyone from Internet-service providers to MP3-player manufacturers to TiVo could be held liable for customers' actions. "The bill was intended to close a loophole," says Deutsch. "It's turned into a noose for the technology industry."

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