Record Labels Break Compacts with Consumers, Congress And Courts; Suit Against XM Trashes Labels' AHRA and Grokster Assurances.

WASHINGTON -- The industry that advised consumers, the Congress and the courts that it would not abuse the legal tools it sought from them has done just that, charged the Home Recording Rights Coalition (HRRC) today. In a suit aimed directly at consumer practices it has long led the public to believe it had no intention to challenge, the recording industry has now, via lawsuit, labeled its best customers as pirates and sought unprecedented tools to use against them. Today HRRC Chairman Gary Shapiro said:

"I have a long enough memory to be astonished at the suit filed
    yesterday. We worked in good faith with the music industry to help
    pass the Audio Home Recording Act (AHRA), based on personal
    assurances that I received that it would put an end to this sort
    of harassing lawsuit against private, noncommercial consumer
    conduct. Yesterday the major labels filed such a suit, against the
    use of devices clearly covered by the AHRA, without so much as a
    mention of the law that provides for royalties on these devices,
    and which was clearly written to remove even the threat of this
    sort of bogus lawsuit."

Shapiro also accused the labels, and the entertainment industry as a whole, of abusing the assurances given to the courts, the Congress and the public at large when the industry pursued its Grokster lawsuit. Then, entertainment industry representatives insisted that they did not by any means intend to threaten the sort of in-home, private, noncommercial recording that yesterday, they alleged violates the copyright law. Shapiro observed:

"The lawyer that signed the complaint against XM is the same
    lawyer who told the Supreme Court that ripping a CD to a PC and
    then to a handheld device (without paying any royalty) is lawful.
    He represents the same industry that, in seeking 'inducement'
    legislation, promised that it would never be applied against
    devices such as a TiVo personal video recorder. But yesterday the
    complaint against XM claimed that consumers who use their devices
    in such ways are violating the copyright laws, and that XM is
    therefore guilty of inducement.

    "The HRRC is proud of our history of working with the
    entertainment industry when the industry's goals and promises have
    appeared reasonable," continued Shapiro. "The action taken
    yesterday indicates that representations to the Congress, the
    courts and the public are not enough to assure that the music
    industry will keep its promises, to us or to the public and its
    elected and judicial representatives."

For updates on Congressional, regulatory and judicial proceedings, please visit the HRRC website at www.HRRC.org.

About HRRC

The Home Recording Rights Coalition, founded in 1981, is a leading advocacy group for consumers' rights to use home electronics products for private, non-commercial purposes. The members of HRRC include consumers, retailers, manufacturers and professional servicers of consumer electronics products. Further information on this and related issues can be found on the HRRC website, www.hrrc.org.