Congress shelves anti-piracy bills

— -- The controversial anti-piracy legislation that fueled a wide-scale Internet protest earlier this week is on life support as Senate and House leaders retreated Friday and called for a compromise.

Senate Majority Leader Harry Reid, D-Nev., said he was postponing a vote set for Tuesday "in light of recent events."

"There is no reason that the legitimate issues raised by many about this bill cannot be resolved," he said in a statement, referring to the Protect Intellectual Property Act (PIPA), a Senate bill that would crack down on websites that violate copyrights and sell counterfeit goods. "I am optimistic that we can reach a compromise in the coming weeks."

House Judiciary Committee chairman Lamar Smith, R-Texas, who introduced the House version known as the Stop Online Piracy Act (SOPA), also called for a delay.

"I have heard from the critics and I take seriously their concerns regarding proposed legislation to address the problem of online piracy," Smith said in a statement. "It is clear that we need to revisit the approach on how best to address the problem of foreign thieves that steal and sell American inventions and products."

The bills' advocates, including media companies, movie studios, book publishers and music recording companies, say granting U.S. attorneys general and copyright holders more power to enforce punitive actions against rogue websites would save jobs, ensure consumer safety and increase revenues.

Large and small Internet companies, including Google, Facebook and a wide array of Silicon Valley startups, say current laws are sufficient and that the proposed legislation will lead to censorship and kill the entrepreneurial spirit that fuels technology innovation.

To raise awareness and urge Internet users to call their representatives, thousands of Internet companies staged a blackout Wednesday. Some sites, like Wikipedia and Reddit, shut down for a day, while others placed prominently displayed black banners on their pages. An online petition drive by Google attracted more than 7 million participants.

Their battle over the Internet and the right of content use — as well as the limit of enforcement powers — were illustrated starkly Friday when U.S. and New Zealand officials shut down Megaupload.com, a popular cyberlocker that stored online movies and music, and arrested its founder Kim Dotcom (originally named Kim Schmitz) and some employees.

Hackers responded by taking credit for attacking the Justice Department's website and that of Motion Picture Association of America (MPAA) and the Recording Industry Association of America.

That law enforcement officers were able to coordinate internationally to take action demonstrates that current laws targeting copyright violators work, says Art Brodsky, a spokesman for Public Knowledge, a Washington D.C.- based communications and technology advocacy group.

"They roped in New Zealand police and the FBI flew down there," he says. "So why do you need more laws?"

In a statement. Chris Dodd, CEO of the MPAA, said the failure to move forward with the bills will ensure continued copyright infringement, but expressed hope that the delay will start a new round of negotiations.