Senate to hold hearings over Napster ruling

WASHINGTON -- The chairman of the Senate Judiciary Committee said Wednesday he will hold hearings to examine a court ruling that Napster violates copyright law. The CEO of the popular online music-sharing service said he looked forward to the hearings.

Sen. Orrin Hatch, R-Utah, said the court decision could have troubling implications. In the Monday ruling, a federal court directed the popular service to stop its millions of users from trading copyrighted material.

"I guess my feeling about this Ninth Circuit decision is a gnawing concern that this legal victory for the record labels may prove pyrrhic and short-sighted from a policy perspective," Hatch said in a speech on the Senate floor.

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Hatch agreed with the court's finding that Napster violated copyright law, but said that, if it is shut down, users might migrate to decentralized systems like Gnutella that are more difficult to control.

Napster users could also pressure Congress into passing laws that could hurt the rights of musicians and copyright holders.

Hatch said music companies should speed up efforts to roll out their own online music-distribution systems and should move quickly to establish licenses for the legitimate distribution of online music.

"Now might be a good time to get those deals done," Hatch said.

Hatch said in the wake of hearings last July that he would rather not introduce legislation addressing the issue, but he did not rule it out entirely.

Hatch would look into holding another hearing in the next few weeks.

In Redwood City, California, Napster CEO Hank Barry said he welcomed the hearings.

"On behalf of Napster, I want to commend Sen. Hatch for his . . . willingness to offer assistance to reach a resolution between Napster and the major recording companies," he said in a statement.

"As Sen. Hatch suggested, it is in the public's interest to revolve this matter in a way that does not shut down the Napster service."

Barry said Napster's alliance with German media giant Bertelsmann should guide "an agreement on a membership-based business model that benefits music lovers, artists, songwriters and rightsholders alike."

Reuters contributed to this report.

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