Crackdown on Free Music Downloaders

July 29, 2009— -- Like thousands of Americans, Joel Tenenbaum likely thought little about downloading music online and sharing it with friends.

But while the 25-year-old may just be "a kid who did what kids do" -- as his lawyer has said -- he is paying a hefty price for the 30 songs he downloaded as a teenager six years ago. The Boston University graduate student is on trial this week for copyright infringement and could face fines up to $1 million.

Tenenbaum is only the second American to be slapped with such a lawsuit. The first person to be sued by recording companies on these charges was a Minnesota woman in 2007. She was ordered to pay a whopping $1.92 million to the labels.

Her attorney said Jammie Thomas-Rasset did not have the money to settle the case and contends that she still doesn't have the money for the damages she's being asked to pay. She has asked the federal court for a new trial.

Tenebaum, of Providence, R.I., tried to settle the case for $5,000, but the offer was rejected, Debbie Rosenbaum, a spokeswoman for Tenebaum's lawyer Charles Nesson, told ABC News.

"Joel isn't asking to not be fined if found guilty of infringement. He is asking for a just resolution," Rosenbaum said.

So far more than 30,000 other file sharers have settled in recent years for amounts ranging from $3,000 to $12,000.

While the battle over the right to download and share copyrighted material is being fought in a Boston courtroom, a Congressional committee began today looking at what it fears may be even greater risks in file sharing to individuals' files and to national security, and possibly how to legislate it.

According to the House Committee on Oversight and Government Reform, in one instance, a list of all the master sergeants in the United States Army was made available through LimeWire, which included their names, Social Security numbers, military occupational specialty codes, and other private information.

In another instance, an employee for a billing company inadvertently released the medical files for thousands of patients of a Texas hospital. In yet another, a contractor inadvertently leaked sensitive information about the infrastructure of 32 cities in the United States, detailing the major assets that are vulnerable to explosive devices.

What is Peer to Peer File Sharing?

The committee is calling for more stringent federal regulation of P2P networks than under the previous administration. The Federal Trade Commission has done a review to see how companies are complying with standards lawmakers passed two years ago.

Peer-to-peer networks, or P2P in digital lingo, consist of computers connected to one another online through P2P software. Each computer acts as a server, from which network members can exchange files, particularly movies, music and other digital content. Popular P2P software includes Kazaa, which recently moved to a subscription-based model, and LimeWire, whose chairman Mark Gorton is testifying at the House committee hearing.

One danger lawmakers worry about with P2P networks is inadvertent file sharing, a scenario where a computer connected to the internet could potentially allow other computer users with similar software to easily search its hard drive and copy unprotected files.

Distributed Computing Industry Association chief executive Marty Lafferty says file sharing is difficult to legislate because technology changes so quickly, and there's a fear of "unintended consequences."

"We totally support the intention of it. We are just concerned about whether it makes sense to put another law on the books when we should wait for the Federal Trade Commission's compliance report," Lafferty told ABC News.

In his opening statement before the committee, Thomas Sydnor II, director of the Center for the Study of Digital Property, stated that since preteens and teenage children comprised many of the users of file-sharing programs, inadvertent sharing often effects entire families and the employers of family members.

Gorton insisted in his opening statement that LimeWire's security risks associated with inadvertent file-sharing were eliminated.

"I am happy to report that immediately after the committee brought the issue of inadvertent file sharing to my attention at the July 24, 2007 hearing on the matter, LimeWire began the process that culminated in all but eliminating inadvertent file-sharing with the LimeWire application," he said.

Persistent Problem of File Sharing

Sydnor warned against leaving regulation up to file-sharing software owners.

"The problem of inadvertent sharing has persisted for nine years because distributors of file-sharing programs like LimeWire LLC have repeatedly responded to even the most serious and well-documented concerns about inadvertent sharing with half-measures," he said.

"It would be absurd to, yet again, rely upon entities like LimeWire LLC to remediate inadvertent sharing. History suggests too well what the consequences of doing so could be: more breaches of national and military security; more needless damage to private enterprises that could otherwise drive economic recovery; more identity theft; more endangered children; more early-releases for dangerous pedophiles; and more needless lawsuits between copyright owners and American families."

Today's hearing comes two years after the Committee's chairman, Rep. Edolphus Towns, D-N.Y., and ranking member Rep. Darrell Issa, R-Calif., first launched an investigation of inadvertent file sharing on P2P networks in 2007, focused primarily on Lime Wire. Witnesses at a 2007 hearing said they were easily able to obtain bank records, health records, military files, tax returns, corporate documents and other private files through LimeWire.