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Music To His Ears: Santa Cruzan Lars Mapstead and his MP3Board website are staging a David vs. Goliath battle for the right to access music on the web.

Cuffing Links

Santa Cruz founders of an MP3 search engine lead the charge for free access to downloadable music

By Rob Pratt

JUNE WAS A BUSY month for the Recording Industry Association of America, a trade group that represents the ruling families of global music distribution--among them, Arista Records, Atlantic Recording Corp., BMG Music, Elektra Entertainment Group, Sony Music Entertainment, Virgin Records America and Warner Bros. Records. A deal with leading music-download site MP3.com, concluded on June 8, means that the website will pay RIAA-affiliated companies BMG Music and Warner Bros. Records a fraction of a cent for every consumer download. The litigious RIAA also took on No. 2 downloadable-MP3 startup Napster, which publishes a software application that lets users trade MP3s from each other's hard drives, with a temporary injunction filed June 12.

While others cowered, Santa Cruz MP3 search engine MP3Board struck back. On June 2, the company filed a lawsuit in U.S. District Court in San Jose that seeks to force an end to seven months of RIAA legal maneuvers aimed at shutting down the site. MP3Board searches for, catalogs and indexes links to websites offering downloads of mp3 files, which compress standard digital audio files into a size easily transferred across the Internet by home users. As most observers expected, the RIAA quickly countersued in U.S. District Court in New York on June 23, complaining of "contributory and vicarious" copyright infringement.

Precedent or Piracy?

FROM HIS MODEST West Side Santa Cruz home, Lars Mapstead, 30, the oldest of three brothers at the center of the controversy, hardly seems daunted that the RIAA, which controls 90 percent of worldwide music distribution, is trying to sue his business into oblivion. He speaks rapidly and in detail, is quick to laugh, and as he talks over the phone it's obvious that he's multitasking--his computer beeps and chirps in the background with Windows alert sounds.

"We're clearly in the right," says Mapstead of MP3Board's lawsuit against the RIAA. "Our case shakes the foundation of what the Internet is. If our linking is illegal, then so is Yahoo's link to MP3Board or any sites with MP3s. We don't have any way to keep track of who the people are on the other end of our links, and we're really absolutely no different than Yahoo or Lycos that way."

More than just asking the district court to tell the RIAA to lay off MP3Board and go bother someone else, MP3Board's lawsuit (online at www.techfirm.com/briefs/riaacomp.pdf) seeks to set a precedent in online copyright law. At issue, the suit claims, is who can be held responsible for Internet piracy. Sites like MP3Board that link to illegal content shouldn't be held accountable for copyright infringement merely for pointing the way to "SuperIllegal MP3z," the company says in the suit. And the lawsuit points out that so far the RIAA has left major (and deep-pocketed) Internet search engines like Yahoo, Hotbot or Excite, which provide the same links, alone.

According to documents filed with the court by the RIAA (available online at www.riaa.com/PDF/CP1H10.PDF), the crux of the matter is piracy, plain and simple. MP3Board links to sites that unmistakably contain illegal copies of sound recordings copyrighted by RIAA member companies, such as "SuperIllegal MP3z," one such MP3Board-linked site repeatedly referenced by the RIAA suit. "Each one of these infringements is facilitated, encouraged, and made possible by the MP3Board site," reads the complaint. The requested damages amount to the statutory maximum of $150,000 per infringement, which could run into the millions. In its suit, the RIAA alleges more than 600 infringements on one occasion alone.

MP3Board says it has been unfairly persecuted by the RIAA, which in October 1999 and April 2000 muscled MP3Board's Internet service provider with lawsuit-threatening letters from RIAA legal counsel. Last May 25, the RIAA demanded that the corporate officers of MP3Board "immediately disable the site or all of the infringing links from the site."

At stake in both suits is how the courts will negotiate a gaping hole in copyright law. The Audio Home Recording Act of 1992 allows consumers to make personal-use copies of things like CDs and videocassettes, but it doesn't apply to "multipurpose devices" like computers. Unlike the producers of blank magnetic or optical media like cassette tapes or CD-ROMs, software companies marketing MP3 players and "rippers" (applications that read from CDs and encode MP3 files) don't pay royalties on every unit sold. The RIAA is working hard to remedy the situation, backing the Secure Digital Music Initiative, a set of protocols for downloadable music that prevents copying, and championing partnerships like the MP3.com deal.

Whether the widespread availability of MP3s on the Internet--pirated or legal--has negatively affected sales of CDs is in dispute. Studies released in the past few months come to conflicting conclusions.

Traffic and Cash Flow

LARS MAPSTEAD first started thinking about building a site like MP3Board a little more than two years ago. He recruited brothers Eli, now 22, who constructed the search engine and catalog that automates MP3Board, and Noah, now 25, who handles "all of the business stuff," after he read accounts of MP3.com's initial public offering.

"I had seen MP3.com go public with a $2 billion market capitalization, and I figured that if people were willing to give up $2 billion in market cap for MP3s, then I should check it out," he says. "I basically had been trying to get both of them [his brothers] to do something for profit. They were into doing computer and Internet things for fun"--like a freeware web application that Noah manages--"and I just said, 'Why don't we build an MP3 site?' "

MP3Board has since become profitable, Mapstead says, but he declines to give details because of the lawsuits. MP3Board has on average 100,000 visitors a day. But MP3Board isn't the most profitable of the sites he operates, Mapstead says. The biggest moneymaker is CashSurfers, which lets registered users who download a proprietary Windows-based application accumulate points toward cash and prizes in return for viewing targeted ads while browsing the Internet, chatting on instant messaging services or reading and writing email.

Lars Mapstead came to Santa Cruz 15 years ago from Carmel to live with his grandmother. (Brothers Eli and Noah both grew up and currently reside in Bakersfield.) A stockbroker at first, he became involved with online businesses about the time the World Wide Web first hit the mainstream in 1994. He claims to have started one of the first businesses offering "virtual hosting" services, providing server space for websites--the cyberequivalent of rental housing. Four years later, he sold the business and took up consulting, helping Internet startups generate visitor traffic to online destinations in return for an equity stake in his clients' businesses.

For Mapstead, the RIAA suit is both about ending RIAA harassment of MP3Board and about blocking the RIAA's move to quash free access to information on the Internet. Ultimately, he says, what the RIAA is doing is extorting money from consumers every time they listen to an audio recording. "Because of the RIAA, when you buy a blank CD-ROM for data, whether you use it for data or to copy music, you pay royalties to RIAA members," he says. "That is so ridiculous. What the RIAA is doing now [with suits against distributors of MP3s] is the biggest money grab ever."

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From the July 12-19, 2000 issue of Metro Santa Cruz.

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