School-sponsored file-sharing a good start

Ever since Napster introduced its innovative way to enjoy music, the Record Industry Association of America has fought to maintain its obsolete distribution chain, filing about 1,600 lawsuits, often targeting college students. The University of Rochester recently signed a deal providing on-campus access to the new, legal Napster. Though only a partial solution, higher education should strongly consider Rochester’s proactive idea.

Many students risk significant consequences by downloading music illegally. Instead of ignoring this problem, Rochester chose to confront it. The university will pay for “premium” Napster service, which allows unlimited access for listening to music but requires payment for downloading. Rochester correctly sees the benefit of what amounts to student library card for music. Like literature, music has entertainment, cultural and educational value, and should be treated as such.

But this cannot solve the larger problem. Facing diminishing sales, the RIAA lobbied Congress in 2003. Instead of sensible legislation to balance encouraging creativity and protecting consumers, Congress rashly created an absurd penalty for copyright infringement. Under the new law, record companies can demand $150,000 per song downloaded illegally, regardless of actual lost profits from the violations. Thus, the industry has no incentive to bargain with the public as to a free market price for online music.

The result is that consumers have two options: they can overpay for legal online music or face financial liability often in the $10,000 range. Given the Internet reality, with low file-sharing costs and almost infinite alternatives, one downloaded song is worth far less than the current price. On the other hand, online music offers a huge opportunity for record companies: Their audience increases exponentially while distribution costs decrease. Right now the RIAA gets the benefits without the costs of new technology.

There has been considerable public backlash to the lawsuits, including challenges to the RIAA’s anonymous subpoenas and even one mother suing the RIAA for racketeering. Both record companies and Congress should realize the preferable solution: rational legislation that protects copyright while encouraging distributors to provide digital music as economically as possible.