Peer-to-peer networks (P2P) move into the Washington policy spotlight today as representatives of the music industry and a new trade group for file-swapping companies sit down at a lunch forum.

U.S. Senators Ron Wyden (D-OR) and John Ensign (R-NV) called the meeting in hopes that the Recording Industry Association of America (RIAA) and P2P United can reach some agreement in a contentious battle.

The music industry has been relentless in opposing P2P networks facilitating the unauthorized downloading of ed music. The RIAA legally forced the original Napster out of business, and it continues to ask courts to declare Napster's successors, such as Grokster, Morpheus and Bearshare, illegal.

The RIAA has also filed more a thousand lawsuits against alleged music pirates operating through P2P networks and lobbied Congress for legislative relief.

Although bills aimed at curbing P2P music piracy have been introduced, lawmakers have so far resisted taking action in hopes that the music industry and file-sharing businesses can privately settle their differences.

"Congress can play a role by using its big, booming voice to tell all the parties to get to the table and work it out," P2P United Executive Director Adam Eisgrau told internetnews.com.

To that end, Wyden and Ensign, co-chairs of the Forum on Technology & Innovation, invited the RIAA and P2P United to discuss the legitimate business and consumer applications of P2P.

How to build a "fair and viable marketplace" in which P2P technology plays a central role is "exactly the right question" to ask, according to Eisgrau. "It's being posed in a productively neutral and open-ended manner and it's being asked at the right time to have a profound impact," he said.

The most pressing P2P issue is a compensation scheme for artists and holders and the technology to implement it.

"The current battles surrounding peer-to-peer file sharing are a losing proposition for everyone," the Electronic Frontier Foundation (EFF), a nonprofit digital rights organization, stated in a white paper released Tuesday. "The record labels continue to face lackluster sales, while the tens of millions of American file sharers -- American music fans -- are made to feel like criminals."

"Privacy [is] at risk, innovation stymied, economic growth suppressed, and a few unlucky individuals singled out for legal action by the recording industry," the EFF writes. "And the litigation campaign against music fans has not put a penny into the pockets of artists."

The EFF adds, "File sharing is here to stay. Killing Napster only spawned more decentralized networks. Most evidence suggests that file sharing is at least as popular today as it was before the lawsuits began."

P2P United supports the same solution as the EFF: voluntary collective licensing. According to the scheme, the music industry would organize a "collecting society," similar to ASCAP and BMI, which then would offer file-sharers an opportunity to get legitimate for a set monthly fee. In exchange, P2P users would be free to download whatever songs they like, using whatever software works best for them.

"The more people share, the more money goes to rights-holders," the EFF white paper states. "The more competition in applications, the more rapid the innovation and improvement. The more freedom to fans to publish what they care about, the deeper the catalog."

The RIAA has resisted the licensing plan and is supporting a filtering system to stop the distribution of ed materials over P2P networks. Last year, U.S. Sen. Lindsay Graham (R-SC) called for P2P United members to develop filters to stop "illegal materials" from being shared online.

According to P2P United's Eisgrau, filters work with a centralized file-sharing network like the old Napster but are ineffective for today's decentralized P2P systems.

The RIAA is particularly keen on filtering software developed by Audible Magic. The Los Gatos, Calif.-based developer of content management and identification services calls its filtering system a "breakthrough in P2P management."

The Audible Magic solution hooks into a network to identify ed files matched against a company developed database. It can block all P2P transfers or only ed material. The RIAA calls the Magic Audible scheme an "innocuous filter."

Eisgrau calls it a "warrantless wiretap," and notes that neither the RIAA nor Audible Magic has provided either P2P United or any of its five members with a demonstration copy of the software that Audible Magic was demonstrating at a high profile congressional gathering earlier this month.

"It is privately administered surveillance software," Eisgrau said.

In an e-mail response to internetnews.com, an RIAA spokesperson wrote, "We are delighted to work with anyone to show them that filtering is a viable option."

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