FILE-SWAPPERS FIGHT BACK GROUP TAKES ITS CASE TO D.C.

Byline: Lisa Friedman Washington Bureau

WASHINGTON - Hollywood has branded them as pirates, purveyors of kiddie porn and even terrorists. Now file-sharers are fighting back - Washington-style.

Six of the major Internet networks that let people swap music and movies for free have formed an industry association, paid six figures to a D.C. lobbying shop and are preparing to have a major presence on Capitol Hill.

From now own, members of Peer-to-Peer United say they plan to actively counteract attacks from the film and recording industries, launch their own policy agenda and participate in the time-honored Washington tradition of dropping campaign donations in all the right coffers.

``The mission of the association is to demonstrate with our actions as well as our words that peer-to-peer businesses are just that - responsible businesses,'' said Adam Eisgrau of Flanagan Consulting LLC.

Eisgrau, a one-time aide to Sen. Dianne Feinstein, D-Calif., acknowledged that his clients have a ``lousy'' reputation in Washington.

``It's the image created by Hollywood and the recording industry,'' he said. ``It's a skeptical environment at best and at times a hostile one. We're looking forward to changing it.''

The move has left the entertainment industry, which claims digital plundering robs it of $3.5 billion each year, and their allied lawmakers looking on with skepticism.

``I hope it indicates a willingness on behalf of (peer-to-peer) software to become legitimate businesses,'' said Rep. Howard Berman, D-Van Nuys. ``They're companies who sell their software and then sell advertising and make money where the primary use is for illegal activity.''

Rich Taylor, spokesman for the Motion Picture Association of America, said, ``We're wiling to engage anyone on a factual basis.'' But, he added, ``Frankly, right now peer-to-peer networks I do not think have a particularly virtuous story to tell.''

The tug of war between file sharers and the entertainment industry dates back to the creation of Napster in 1999. No sooner did a court-ordered shutdown cripple Napster than a new generation of free digital networks emerged - allowing users to share not only music but also movies, software and other files - and sparked renewed consternation in Hollywood.

Recent congressional hearings have focused on peer-to-peer networks' copyright violations. Entertainment industry leaders such as MPAA President Jack Valenti also have warned lawmakers the software exposes minors to pornography and ordinary users to immeasurable security risks.

``They've only heard one side of the story,'' said Michael Weiss, CEO of Woodland Hills-based StreamCast Networks Inc., which created the file-sharing network Morpheus.

``It's important for Congress to hear more from the 60 million Americans that use file-sharing and less from the recording industry lobbyists,'' Weiss said.

In addition to Morpheus and Grokster, Peer-to-Peer United includes Limewire, BearShare, eDonkey and Blubster. Sharman Networks, which distributes Kazaa, has formed a separate industry group.

Weiss and Grokster President Wayne Rosso said Peer-to-Peer United will encourage companies to tighten security protections and do more to block the exchange of pornography. At the same time, they plan on urging Congress to overhaul the content payment system to force music and movie labels to allow widespread downloading.

``Look, we don't believe in copyright infringement,'' Rosso said. But, he added, ``If 60 million people, a third of the American public, is breaking the law, shouldn't we re-examine the law?''

``No,'' is the reply from lawmakers and entertainment industry officials. Berman and the MPAA's Taylor each described the idea of compulsory licensing as a ``nonstarter'' and said the peer-to-peer companies' real objective is siphoning copyrighted music and movies for free while making money off of advertising on their own sites.

``We believe the market should determine pricing,'' Taylor said. He called file-sharing ``great technology,'' but added, ``it's the complete washing of hands of responsibility that we have a problem with.''

In the meantime, both sides are gearing up for Congress' return in September when lawmakers could decide on a handful of bills aimed at file-sharers - including one by Berman that allows the uploading of an unauthorized copyrighted file to a public network as a possible felon. Under the legislation, infringers could be fined $250,000 and face a five-year jail term.

Lisa Friedman, [phone]

lisa.friedman(at)langnews.com