OFF:[still] Napster Update #2

[DASLUD at AOL.COM]

Napster Plans Screening System

By RON HARRIS
.c The Associated Press


SAN FRANCISCO (AP) - In a move to pre-empt a court-ordered shutdown, Napster
Inc. says it will deploy a new screening system to stop the free trade of
thousands of copyright songs.

Napster's plan to bring the software online this weekend came as the company
pleaded with a judge Friday to keep its music-swapping service alive.

Attorney David Boies said the screening system would block access to 1
million music files. He and Napster chief executive Hank Barry left it
unclear whether the number represented different songs or spelling variations
involving a much smaller number of songs.

The move amounted to a concession that Napster's days were over as an online
clearinghouse for the free trade in copyright tunes. The company said it
would offer membership-based swapping for a fee by July 1 and pay copyright
holders royalty fees.

The recording industry, which provided Napster with a list of 5,600 song
titles it wanted blocked, said its plan wasn't aggressive enough.

Music industry attorney Russell Frackman said a far greater number of songs
should be screened out, including recordings not yet released to the public.

Hilary Rosen, president of the Recording Industry Association of America,
said she will take Napster on its word that it is trying to develop a method
to comply with copyright infringement issues.

``We think that the screening technology has the potential to be effective,
but we'll see,'' Rosen said.

The software will be smart enough to block searches of name variations, such
as ``Bing's Christmas'' for Bing Crosby's ``White Christmas,'' or
misspellings such as ``Metalica'' for ``Metallica,'' Napster officials said.

But some experts wondered how long it would take before users find a
workaround.

``What the well-intentioned mind can invent, the not-well-intentioned mind
can destroy,'' said Robert Schwartz, a lawyer who has represented movie and
television studios in copyright cases.

If the screening system works, however, frustrated Napster users can go
elsewhere - to similar servers not under the control of the company or the
courts, and file-sharing systems that use no central servers.

Where all of this will leave Napster is unknown. Its users downloaded with a
vengeance as Friday's hearing began. More than 8,500 people were sharing more
than 1.7 million files through just one of Napster's more than 50 servers.

The hearing was the result of a decision from the 9th U.S. Circuit Court of
Appeals, which ordered U.S. District Judge Marilyn Hall Patel to rewrite her
earlier order that essentially shut the company down. The appeals court
ordered her to come up with a much more limited way Napster can survive.

Specifically, Patel must find a way for Napster to block pirated songs
without limiting the free speech rights of computer users trading other
music.

Napster last week offered to settle the lawsuit brought by the recording
industry for $1 billion in exchange for a 40 percent cut of online music
sales. The offer was rejected by the recording industry.

Last fall, German media giant Bertelsmann AG, which owns the BMG label,
partnered with Napster and said it would fund the development of a
subscription-based service.

None of its competitors has joined in and all the major labels are developing
online music distribution businesses of their own, even as other ways of
getting free music are sprouting up.

Napster's popularity exploded in 1999 after founder Shawn Fanning released
software making it easy for personal computer users to locate and trade songs
stored as computer files in the MP3 format, which compresses digital
recordings without sacrificing quality.

The five largest record labels - Sony, Warner, BMG, EMI and Universal -
quickly sued, saying Napster could rob them of billions of dollars in
profits.

James Grady, an analyst with Giga Information Group, said the screening
technology coming this weekend from Napster is a valiant effort, but perhaps
comes too late.

``I really think that this is Napster's opportunity to show that they are
trustworthy,'' Grady said. ``The question is do they want to take advantage
of that, and will they be able to?''

On the Net:

Napster: http://www.napster.com

Recording Industry: http://www.riaa.com

AP-NY-03-03-01 0549EST

Copyright 2001 The Associated Press. The information contained in the AP news
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