Q: How did Napster plan to make money from their song-swapping service? How is Napster still in business? What material can still be found on the service?

A: I’m not sure Napster had a specific plan for profitability — no one else seemed to need one at the time, so this isn’t as odd as it may sound. Anything that aggregated lots of eyeballs was a good start, and Napster’s variable costs were arguably quite small: once set up and known, Napster didn’t even have to keep expanding storage and bandwidth for the music transferred; that was happening among the users themselves. So the mainstay of work and money needed was in large part to design and maintain the central index of songs and the Napster client software. My guess is that they were — and still are — hoping to offer up the eyeballs they’ve aggregated to music companies, brokering a fee-for-music system and taking a cut of same.

Q: The Napster case points to some of the difficulties enforcing copyrights in the digital, networked world. How will the law be forced to evolve?

A: The law’s already evolved quite a bit: the Digital Millennium Copyright Act of 1998 has sweeping if Byzantine changes in just these areas. While it doesn’t specifically speak to services like Napster — hence the need for some judicial interpretation to sort out whether Napster is contributorily infringing copyright in the absence of policing their indices for songs likely to be copyrighted — it does specify a complicated regime of payments and licenses for the nascent music “webcasting” industry, and it provides penalties for those who “hack” schemes that private parties design and implement to guard what they see as their intellectual property.

Q: Will it ever really be possible to regulate peer-to-peer distribution of material that is under copyright protection?

A: Absolutely. For better or worse, there are coming to be several logical chokepoints for most peer-to-peer traffic; in the case of students at universities — often the ones making the most of their new access to high-speed internet — that could be the university IT departments themselves, or for homes, cable-modem and DSL providers. There are lots of ways the levers of law and policy can be worked to induce or pressure those who can take technical steps to restrict peer-to-peer to go ahead and do so.

Q: The Supreme Court has, in the past, ruled that I could, for instance, make a mix tape for a friend. In the same vein, is it legal for friends to share mp3 files over the Internet?

A: Actually, the Audio Home Recording Act seems to say you can make mix tapes for friends, too. But that act doesn’t speak to what happens on a service like Napster (despite Napster’s attempt to argue just that in their case in the 9th Circuit), and I don’t think it’s easy to say what a typical file swap on Napster amounts to. Some would argue it’s fair use; others not. Speaking purely doctrinally, I think it’s quite difficult to claim that the wholesale file transfers of copyrighted songs happening on Napster among utter strangers are “fair use” under the copyright laws.

Q: Will the entertainment industry be able to come up with a profitable business model for online distribution?

Honestly, I think they’re holding a lot of cards right now — even as it seems they’re about to be bypassed by the fact of Internet-enabled file sharing and new business models that attempt to eliminate those in between the artist and the consumer. Indeed, I worry that they can become too successful, coming up with ways of metering and distributing content that are worrisome from a free speech point of view. Such a point of view is especially hard to express in these instances, since we usually worry most about free speech vis-a-vis the government, which is what makes this an interesting area of research. Like a terribly cooked steak, burned in some places and raw in others, we could see a world in which lucky–but renegade–tech wizards enjoy all the content they want, while average couch potatoes are stuck paying an “entertainment” bill for music much like a monthly water, heating, or cable bill — and parting with lots of data about what songs they like as they listen.

Q: If Napster were to relocate off-shore, could they escape U.S. jurisdiction?

A: Not so easily. ICraveTV tried to offer streaming television over the Internet, using Buffalo TV station signals picked up in Canada, where it was arguably legal to retransmit them. A federal court in Pittsburgh had no problem asserting U.S. jurisdiction over the harm alleged by the content owners in ICrave’s allowing U.S. citizens to tune into the feed over the Net. So: as a legal matter, where there’s significant and purposeful impact from an activity in the U.S., the U.S. may not have much trouble finding legal jurisdiction. Then the question is whether the target of the lawsuit cares. Most companies–or at least any U.S. people behind them–are hard pressed to so cut their ties to the U.S. that they can blithely ignore an assertion of jurisdiction.

Q: What do you think will be the next big Internet-spawned lawsuit?

A: In this vein? Seems to me Gnutella and its siblings are next for a test.

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