Making P2P Legal

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P2P holds significant potential for both artists and fans, but it can't fully be realized until the lawsuits stop. We've seen this story many times with new technology and old media, so the solution is no mystery: we need a licensing plan for P2P. Think of a license as a shield from lawsuits. Here are a couple of ways to get legal:

Voluntary Collective Licensing

Copyright holders could voluntarily join together and offer "blanket" licenses, also known as "Voluntary Collective Licensing."

This is how the "problem" of radio was ultimately resolved (only after copyright owners gave up on trying to sue it out of existence, of course). A "performing rights organization" (PRO) was formed, songwriters and music publishers were invited to join, and blanket licenses were given to any and all radio stations that wanted them.

Today, there are three major PROs in the United States - ASCAP, BMI, and SESAC. In exchange for a fee, they will give blanket licenses to anyone who asks. (For antitrust reasons, the terms offered by ASCAP and BMI are closely monitored by a federal court.) Once licensed, radio stations may play anything, anytime, without having to ask permission first. The PROs then divide up the fees among their members.

Compulsory Licensing

What happens if copyright holders refuse to grant licenses at any price? It wouldn't be the first time; this situation arose with player pianos, cable TV, satellite TV, digital recording media, and Internet radio as well. Traditionally, however, the government has stepped into the fray and "compelled" copyright holders to license their work for a fee. This is called a "compulsory license" (or "compulsory").

The first American compulsory was adopted when the music industry fought the Napster of 1909: the player piano. Sheet music publishers claimed that the creation of piano-readable sheets was against the law and that they should have the right to monopolize the booming piano roll industry. Congress disagreed and instead crafted a compulsory license that paid recording artists while protecting the new technology. Today, this license allows bands to record (or "cover") another band's song (so long as they've paid the $.08 per copy of the recorded track).

Source: EFF