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Napster goes to Washington
May 23, 2000: 5:40 p.m. ET

Lawmakers, music industry leaders to debate use of Internet technology
By Staff Writer Franklin Paul
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NEW YORK (CNNfn) - Beats and baritones could drum out Beijing Wednesday as Capitol Hill lawmakers turn their attention from China trade to hold hearings about music, the Internet and controversial technologies such as Napster.

Rap pioneer Chuck D and Tom Silverman, founder of Tommy Boy Records, are set to headline the choir of speakers at the House Committee on Small Business' exploration of new market possibilities for small music labels and entrepreneurs created by the Internet.

graphicAlmost certainly, the hearings, chaired by Rep. Jim Talent (R-Mo.), will delve into Napster, the controversial company whose software allows Internet users to share and exchange MP3 files -- compressed, digital versions of popular tunes.

Several high-profile artists and the recording industry's trade group are suing San Mateo, Calif.-based Napster, charging the company's software promotes piracy by enabling users to download and swap copyrighted music without permission.

Napster gets $15 Million investment

Despite the legal wrangling and often-raucous debate about Napster and its effects on the digital distribution of music, the nine-month-old company continues to grow - despite its lack of an official business model.

On Monday, privately held Napster said it lined up $15 million in new investments, led by venture capital firm Hummer Winblad Venture Partners. As part of the investment, Hummer Winblad partners Hank Barry and John Hummer will join the Napster Board of Directors, and Barry will step in as Napster's interim chief executive.

Eileen Richardson, the company's interim CEO for the past nine months, will continue in an advisory role to the company, whose Web site has 10 million registered users.

A Napster spokesman said the funds will be used to steer the company towards its as-yet undetermined business strategy - which could focus on selling or licensing software, building an advertising-supported Web site or other possibilities.


More ground level issues such as finding bigger office space and adding to its staff of 35, will be addressed with the cash infusion. Napster's sole product - which is still in trial, or "beta," stage -- is distributed for free. The final version of the Napster product is due in June, the spokesman said.

In the meantime, Napster is preparing for the next phase of its legal battle with the Recording Industry Association of America. A California court is expected to comment on July 26 on RIAA's request for a preliminary injunction, with both sides filing their arguments during the next few weeks.

Sharply opposing views expected

The 34 members of the House committee can expect to hear sharply opposing views from the speakers. Chuck D., a founding member of the rap group Public Enemy, insists the Internet gives artists and consumers more power over what music is made available. Indeed, his Web site,, is running a contest titled, "Why I support Napster."

graphicConversely, industry veteran Silverman's position will likely focus on the "prevalent problem of theft," according to an Amy Weiss, Vice President of communications for RIAA in Washington.

"It's unfortunate that there are sites out there who steal work from artists and artists are losing money every day, because the piracy continues," said Weiss.

Neither RIAA nor Napster officials will take part in the committee's discussion on Wednesday.

Other speaker at the hearing include Peter Harter, vice president of Global Public Policy and Standards at, and Ric Dubbe, senior analyst at Massachusetts-based Internet

Last week, Webnoize unveiled a study that said a majority of college students who said they had used Napster said they would be willing to pay $15 a month to use the service. Back to top


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