The New York Times (reg. req.) reports on the Library Access to Music Program (LAMP) at MIT (With Cable TV at M.I.T., Who Needs Napster?). You can read MIT's press release (MIT students launch campus-wide electronic music library). Read the FAQ (LAMP Frequently Asked Questions). And you can hardly do an engineering project nowadays without checking with the lawyers, thus, this interim research paper (Engineering an Accessible Music Library: Technical and Legal Challenges [PDF]). Or, if you are so inclined, grab the software (lamp-0.9.tar.gz).

So, what is LAMP? From the FAQ:

LAMP is an electronic music library of 3,500 classical and contemporary CDs that may be accessed across the MIT campus, including in student dormitory rooms and faculty offices. While at MIT, patrons can listen to CDs in the collection instantly and on-demand, free of charge, but nobody can download CDs or save them.

....

Using a Web browser, patrons visit http://lamp.mit.edu/ and "check out" channels of the MIT cable television network for their exclusive use. Patrons browse through LAMP's library of 3,500 CDs and select one to play. The CD plays instantly over the "checked out" cable television channel. Users can pause, rewind, and skip around, just as if they had walked to a real music library and checked out a physical CD. Right now MIT has devoted 16 channels to the project, so 16 users can control playback at a time. An unlimited number of users may listen.

Essentially, LAMP takes advantage of inconsistencies and exemptions in the law of copyright. Because the cable network is analog, public performance of the sound recording does not require permission of the copyright holder. If the transmission were digital, well, let's just say that no one is quite sure who has to be paid how much. A license is still required for the underlying song from the composer or songwriter, but MIT has one (at the bargain price of only $4,000 per year). An additional license was also thought necessary (there are some defenses, but MIT was unwilling to risk liability) in order to have ripped versions of the CDs used in the system. This "ripped" license was approximately $8/CD, and was acquired through Loudeye. Interesting fact, Loudeye didn't have a license until the MIT students alerted the Harry Fox Agency to what Loudeye was up to by asking Harry Fox for a license for ripped CDs the MIT students planned to buy from Loudeye.

Ironically, the most played song on the MIT playlist when I checked was "The Scientist" by Coldplay.

LAMP is a direct result of the seriously confused copyright law regarding music. Exemptions and exceptions have been forced into the law to meet particular business needs and the desires of particular interest groups. The result is a mess that few outside of the legal profession can understand and something only copyright lawyers can love. Although I think that LAMP is great, it is the potentional for just such unintended consequences that makes me fear grafting even more complexity onto existing copyright law.