FAC Embraces Throttling for File-Sharers

Says “three-strikes” should consist of a warning letter, a “stronger” warning letter, and finally bandwidth throttling for illegal file-sharers so that they could still surf the web and check their e-mail.

The Featured Artists’ Coalition (FAC), which formed this past March to give artists an equal voice in the P2P debate, and has repeatedly voiced its objection to any legislation that would criminalize file-sharing by music fans, held an “urgent” summit yesterday to discuss illegal file-sharing.

The summit was arguably a result of the very public discord between it and Lily Allen, whom called the FAC nothing more than a bunch of “rich and successful” music artists with some of the “biggest Ferrari collections in the world.”

She wrongly thinks they’re pro-file-sharing rather than merely anti-disconnection. They believe “wide-scale invasion of personal privacy” is both “disproportionate and unenforceable” to the threat posed by what is ostensibly a minority of Internet users.

They also see P2P as an “important form of promotion” for emerging artists while she considers it a “disaster.”

So the FAC called for a meeting of music artists last night at Air Studios in London to discuss the issue of illegal file-sharing and how it affects them and the people that support them.

Together they agreed on the the Air Statement:

We the undersigned wish to express our support for Lily Allen in her campaign to alert music lovers to the threat that illegal downloading presents to our industry and to condemn the vitriol that has been directed at her in recent days.

Our meeting also voted overwhelmingly to support a three-strike sanction on those who persistently download illegal files, sanctions to consist of a warning letter, a stronger warning letter and a final sanction of the restriction of the infringer’s bandwidth to a level which would render file-sharing of media files impractical while leaving basic email and web access functional.

So it seems that though they still don’t support disconnecting file-sharers from the Internet per Lord Mandelson’s evolved “three-strikes” plan, they have come to embrace bandwidth throttling instead.

It’s a puzzling solution to a problem that is difficult if not impossible to legislate against, yet is a careful middle ground between the two sides of the debate.

“In the meeting, we didn’t always agree but we came to an agreement that we thought was good for everyone,” said Radiohead guitarist Ed O’Brien afterwards. “We’re going to have further meetings like this, we’re going to get together – we’ve realized the importance of doing this together.”

He described the meeting as both “emotional” and “heated.”

The Open Rights Group, the UK-based organization dedicated to defending freedom of expression, privacy, innovation, consumer rights and creativity on the Internet, while praising their decision to renounce Internet disconnection, says that throttling “could be just as bad” and is “both unjust and a distraction” to the real problem.

It says the real problem is the fact that new online music business models can’t get started because entrepreneurs can’t get the licenses necessary to create and run them.

“The reason for that is quite simple: licenses don’t exist,” it says. “Unlike, for instance, radio, there’s nowhere you can go to get a license for your online music business.”

“The result is that it takes years to set up a new business, and the industry’s major labels are able to ‘pick winners’ that suit them. It is no coincidence that you either have to be very big, like Apple or YouTube, or prepared to give large slices of your business to the labels, as Spotify did, to get going.”

It echoes what I reported on this past July when David Pakman, a music industry veteran and now venture capitalist at Venrock Associates, blamed the music industry for a lack of digital music innovation.

“What the music industry never encouraged or even allowed was building an ecosystem around its product,” he said.

Most digital music services face the daunting task of securing permission to even sell music, let alone a brokering a deal that makes the venture profitable.

The Open Rights Group points to examples like Virgin, which has spent years trying to create a subscription-based unlimited MP3 download service. After initially scrapping the plans back in January, during the summer it said the plan was still a go and that it would launch later this year.

“There is a serious argument that labels are acting to restrain trade, and are preventing competition,” adds the Open Rights Group. “The result is that unlicensed services fill the gap.”

There has to be something to be fact that nobody other than Apple has been able to make a profitable online music service, and that’s what artists and the FAC ought to be concerned with. You can hold all the summits you want, but unless and until you offer music fans a viable alternative you’ll never solve the problem.

Creating viable alternatives won’t happen only by warning and throttling file-sharers. It’ll require record labels and artists to come together and figure out a way to give fans the music they want and at a price they can afford.

Why does it have to be so hard?

Stay tuned.

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