FILE-SWAPPING ON RISE IN EUROPE, OECD FINDS

P2P file-sharing is growing rapidly in some European countries, a representative from the Organisation for Economic Cooperation & Development (OECD) said Thurs. The OECD, which doesn’t involve itself in copyright-vs.-P2P issues, has been looking at how the Internet and broadband affect economies and societies, Sacha Wunsch-Vincent said. P2P downloading has “great ripple effects” beyond the music industry, he said during a panel discussion at the 3rd Annual European Internet Domain Name Summit in Paris.

OECD research shows that some 30% of users in the U.S., France, Finland, Canada and Japan download music on P2P networks, Wunsch-Vincent said. OECD’s impression, he said, is that the trend is increasing as users go after larger files, such as movies. The move of P2P’s user base from the U.S. to Europe coincides with the emergence here of new file-sharing technologies, he said.

The copyright-vs.-file-sharing debate sounds much the same in Europe as in the U.S. Networks such as Kazaa and Gnutella have destroyed intellectual property (IP) and “it’s too late to turn the clock back,” said Tony Morris, an IP lawyer who heads the media law practice at London’s Marriott Harrison. The recording industry “slept through the alarm clock” of Napster, only to launch “knee-jerk” lawsuits against downloaders, he said. Too late, he said, music companies have begun considering the feasibility of authorized file-sharing. U.K. publication Music Week is piloting a weekly “download chart” of unofficial top-10 hits, Morris said. But, he said, the recording industry’s current enthusiasm for an official download system will be “short-lived” and won’t save the industry. The industry’s challenge, he said, is to get beyond the Internet and “excite their customers” to want to pay for music.

“Downloading is not a dirty word,” said Stephane Marcovitch of the French Association des Fournisseurs d'Acces et de Services Internet. Nevertheless, he agreed P2P networks are most often used for illegal purposes. Those uses cost ISPs, who must use a lot of bandwidth and pay their own telecom operators for downloads, Marcovitch said. ISPs are “just carriers” who derive no benefit from P2P networks, he said.

One P2P representative defended the technology, saying software developers have the right to develop their art. In the recording industry it’s all about the artist getting paid and being able to develop his or her craft, said Lime Wire Chief Technology Officer Greg Bildson. It should also be a fundamental right for P2P developers, he said.

Panelists, naturally, disagreed over how to resolve the bitter feud between IP owners and P2P users. Hubert Tilliet, deputy head of the Legal Dept. of Sacem, the French collection society for authors and composers, pointed to 3 solutions: (1) Develop legal online services that guarantee quality downloads and allow users to act legally. (2) Educate the public about the impact of unlawful downloads on creators. (3) Take legal action against harmful infringements.

But Electronic Frontier Foundation (EFF) European Affairs Coordinator Cory Doctorow called the P2P wars “a losing proposition.” Suing music fans isn’t hurting P2P companies, he said. Moreover, he said, contrary to content owners’ claims, filesharers don’t care about either reliability or quality of service. And the idea that the record and music industries can educate 70 million fileswappers is “magical thinking,” Doctorow said.

Instead, Doctorow said, EFF proposes a “blanket license” that would collect royalties from a variety of sources, including ISPs and users. The fees would be assessed on a statistical basis, he said, without having to account for every single download, much as actuarial statistics work. ISPs could opt into the plan because it would be easier for them than bifurcating services between “legal” and “illegal,” and they could use the license to advertise legitimacy to customers. The license would be good for content owners as well, because it would give them a bigger piece of the pie, Doctorow said.

Tilliet dismissed the idea of compulsory licenses, saying they're not legal under various international treaties and wouldn’t allow collecting societies to distribute royalties because ISPs claim not to have precise numbers for downloaded music. Marcovitch disagreed, saying that suggestions that users pay more for uploading onto the Internet is a bad idea because it will hurt rollout of VoIP and other services. However, he said he can envision making P2P users pay under compulsory licenses.

Morris said although he’s “pessimistic” about the future for music and copyright, he sees “some elements of hope” in business plans being explored by several of his clients. One is a software system -- open royalty gateway -- that manages copyright online. The other is an Internet record company that will encourage artists to sign on to have their online content managed.

The Internet domain name summit was organized by the Chamber of Commerce & Industry of Paris, the Internet Society of France, Cigref and Medef.