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US state bans Netflix, Napster password sharing

Recording Industry Ass. of America triumphant

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It's now illegal in Tennessee to share passwords for online content-subscription services such as Netflix, Napster, and SuperPass.

Senate Bill 1659, sponsored by Senator Jim Tracy and signed by governor Bill Haslam, adds "entertainment subscription service" to a long list of items subject to theft-of-services law.

It's now just as illegal for you to give a friend your Netflix password so he can stream Casablanca as it is to, say, tap into someone's cable TV line, walk out of a restaurant without paying, sneak into a movie, or use someone's car or "other moveable property" without their permission.

A nearly identical bill in the Tennessee House of Representatives, HB 1783, would have also increased the penalty for such misdeeds. Current Tennessee law makes the theft of services totalling less than $500 a Class A misdemeanor; HB 1783 bumped that level of punishment up to a Class E felony if the misdeed were the perp's second offense.

In mid-May, however, the House agreed to the less-punative Senate version that was signed by governor Haslam, which removed that felony elevation. SB1659 passed the Tennessee Senate 30-0; HB1738 passed the House 91-0.

Such massive support for the bill was perhaps no surprise, considering that Nashville, Tennessee is home to America's massive country music industry, and the Recording Industry Association of America was strongly behind the bill.

The RIAA has also been pushing for increased penalties for illegal content streaming on a national level. Last month, for example, it expressed support for a US Senate bill, S. 978, which adds streaming to illegal uploading and downloading as felony-status criminal activities.

In support of that bill, the RIAA's public policy and industry relations man Mitch Glazier said: "As the music industry continues its transition from selling CDs to providing fans convenient access to a breadth of legal music online, laws that provide effective enforcement against new and developing forms of content theft are essential to the health of our business."

In support of its argument that piracy is hurting the music industry, the RIAA cites a study by Frontier Economics which reported that in the US alone, internet users "consume" between $7bn and $20bn worth of pirated music each year, and that "that the global value of counterfeit and pirated products could be up to $1.77 trillion by 2015."

The RIAA also points to an NPD study which reported that US music lovers paid for only 37 per cent of the music they acquired in 2009. These studies, the RIAA claims, help explain why US music sales have sunk 47 per cent since the dawn of Napster in 1999, from $14.6bn to $7.7bn.

The US No Electronic Theft (NET) Act, passed in 1997, provides the RIAA with a hefty cudgel with which to punish music pirates: criminal penalties for first-time offenders can be up five years in prison plus $250,000 in fines, and civil penalties start at $750 per pirated tune.

Now, with the first US state having instituted a no-password-sharing law, the RIAA has another club it can wield in its battle against music lovers who may wish to listen to its members' wares for free. ®

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