In a move that could complicate Internet music sharing, Napster offered Tuesday to settle with the recording industry.
To avoid a court order that may shut down Napster permanently, the file-sharing service said in the settlement it will pay $1 billion to major record labels, songwriters and independent labels and artists over the next five years.
Five major recording labels would divide $150 million a year among themselves and independent labels would divide another $50 million a year.
If the settlement is accepted, Napster users would have to start paying fees to use the service. The change is slated to begin this summer.
Users would pay a monthly fee for the right to continue downloading music files.
A basic membership plan would cost an estimated $2.95 to $4.95 per month with a yet-undetermined limit on file transfers. A premium membership would cost $5.95 to $9.95 but would offer unlimited file transfers.
There also would be speed limitations of 128 kilobytes per second, which would change Napster's capabilities.
Users would pay additional fees to burn CDs and transfer music to portable devices.
"The real questions about Napster's future are economic, not technical or legal," said Hank Barry, interim Napster CEO, in a statement last week.
Some University officials agree Napster has few legal choices.
"As far as I can see, Napster doesn't have a lot of options except to settle or shut down," said Assoc. Law School Dean Glen Robinson, who specializes in anti-trust, communications and cyber-law.
Robinson said the only court left to hear the case is the Supreme Court, which he doubts will take on the case.
Napster's business consultants now predict more than 98 percent of its 64 million registered users will abandon the service when the new fees are imposed, which may leave Napster unable to pay the settlement.
For the most part, students said they like the current Napster system and are upset about the company.
"It's all about the sharing," third-year Engineering student Bill Oliver said.
"I understand [record companies] think they're losing money, and it's violating copyright laws," third-year College student Amy Naca said. "But I think the fans are the ones helping [record companies] make their money, so they should still think of their fans."
Some students also expressed doubt that free Internet music would disappear if Napster charges users.
People "got used to [the music] being free, so something else will pop up to replace it," third-year Engineering student Chris Hayden said.
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