MP3.com Will Reactivate Service

Friday, September 8th 2000, 12:00 am

By: News On 6

LOS ANGELES (AP) â€” MP3.com will reactivate its embattled online music service despite an ongoing copyright infringement tussle with Universal Music Group and the recording industry.

The company's chief executive officer, Michael Robertson, said the My.Mp3.com service would be turned on sometime in the next few weeks, giving members access to music stored on its computers in San Diego. To access their music over the Internet, members must first prove they paid for the recording by briefly inserting a compact disc into a computer's CD-ROM drive.

It was this service that first landed the company in court, accused by the five major record labels and the Recording Industry Association of America with illegally storing thousands of CDs and intentionally violating copyrights. MP3.com has reached out-of-court settlements and signed licensing agreements with four of the five major record labels, but continues to hold it has done nothing wrong.

``Letting people listen to their own CD collection is a fair use,'' Robertson said Thursday.

A federal judge in New York ruled Wednesday that MP3.com violated copyrights of music companies and awarded Universal Music Group $25,000 per CD, a penalty that could reach as much as $250 million. The company plans to appeal and the case is likely to reach the U.S. Supreme Court.

Robertson sounded confident Thursday about the company's long-term prospects. But he remains puzzled over Universal's refusal to reach a settlement and avert a court battle.

``We were disappointed,'' Robertson said. ``We not only settled with the other four plaintiffs, but we got a license going forward. This is great technology and when we had a chance to sit down with the parties involved, they got excited. It is very disappointing that Universal doesn't see the benefit or for whatever reason doesn't want to settle this and forced this into a legal showdown.''

Robertson said the terms discussed with Universal were similar to the ones agreed to by the other four record labels. He declined to specify what those settlements were. But the company has reserved $150 million to pay for settlements with record labels and a separate group of music publishers who were also party to the lawsuit.

He said a settlement with Universal is still possible.

``It's possible, but challenging because there is a willfulness judgment against us that doesn't reflect the company's actions. To have the company's and my actions in particular branded as willful is disconcerting and that has added another challenge to getting a settlement.''

Robertson has been outspoken in his comments about the recording industry, brashly predicting that the Internet would one day make the record labels unnecessary because artists would be able to make direct sales to consumers. The company continues to promote independent, unsigned artists, distributing $1 million a month to musicians based on how many times their music is downloaded.

Robertson declined to speculate whether Universal's refusal to settle the case was connected to his earlier outspokenness

``I can't speculate on Universal's thinking,'' he said. ``I think that would be a great question to ask Universal.''

Robertson said he is optimistic about an appeal and not concerned about the company's financial health in the interim. He said he will press for a legislative clarification of copyright laws to recognize new technology.

``If our judicial system is going to be so inflexible when innovative new technologies come along, you have to look for help through the legislature,'' he said. ``We need a bill of rights for music owners.''