December 26, 2000, 12:40 PM — AS THE MUSIC industry continues its legal battles against companies such as Napster to prevent the unauthorized distribution of MP3 music files over the Internet, many Internet industry observers are arguing that it is trying to apply outdated business rules to a medium it does not understand.
"If the music industry thinks their business model can stay the same as it has for 50 years in an age where we have the Internet, that is probably a really bad assumption," said Jon Radoff, the CTO and co-founder of Web site content management company Eprise, in Framingham, Mass.
Industry figures such as Radoff argue that technology will always be used to circumvent any legal attempts to restrict the free distribution of electronic content.
They point to the example of Freenet, a software program created by Irish programmer Ian Clarke, which allows any electronic content to be copied, while incorporating security designed to prevent the copier, or the owner of the copied file, from being traced.
According to Clarke, the issue is all about free speech.
"I am trying to create a situation on the Internet where people have total freedom of speech with no form of censorship whatsoever," Clarke said.
Similarly, an aborted project undertaken by America Online programmers, which resulted in software dubbed Gnutella, achieved similar capabilities.
According to Radoff, music companies should have learned lessons from the software industry. "When the Internet came along ... the software industry saw how to ... change their whole business model to use the Internet to distribute more software and make even more money," Radoff said. "Instead of the music industry recognizing that same opportunity, they are too busy ... suing people over copyright infringements."
But despite the fact that the software industry is seen as having dealt with its issues better, it is cautious about the implications of ongoing legal battles.
"We are watching what is going on and trying to determine the extent to which there is a piracy problem," said Keith Kupferschmid, counsel of Intellectual Property at Washington-based Software & Information Industry Association.
Similarly, America Online has distanced itself from Gnutella.
"Gnutella was basically a freelance project, and the Web site that contained the software was taken down immediately," said a spokeswoman for AOL.
Industry uncertainty stems from questions about who will triumph in the music industry's ongoing cases.
Most recently, MP3.com, which was found liable of copyright infringement, said it has reached a licensing deal with Broadcast Music Inc. (BMI) that will allow it to offer potentially 45 million BMI songs.