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Let’s look at the headlines from Net music news. Maestro, hit the rewind:

Responding to pressure from the Recording Industry Association of America, Carnegie Mellon University busted 71 students for collecting and distributing MP3 files, the standard du jour for music pirates on the Internet. Other universities are following suit and monitoring data traffic on school servers

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* A privacy advocate revealed that RealNetworks, creator of RealPlayer and RealJukebox, has been collecting data on the listening habits of its users without their permission. The company responded quickly with a mea culpa, a new privacy policy and a software patch, but the damage to its reputation has already been done (yet I have to wonder if the public outcry was partly inspired by paranoid folks worried about collected records of illegal MP3 files on their hard drives.)

* Joining the clusters of digital music portals such as Spinner.com and MP3.com, Lycos unveiled a music portal with an MP3 search, audio streams and more. Likewise, MTV’s interactive arm, iMTV, launched revamped music sites in conjunction with SonicNet. Last week saw the launch of a Tokyo-based site, 1audio.com, that will offer music and bilingual information about domestic and foreign artists. The outfit will expand to China in the coming weeks and then on to Korea next year.

Major announcements are coming out of the Comdex and WebNoize conferences this week. Sony announced it will be collaborating with IBM and Microsoft on solutions for electronic music distribution. At WebNoize99, the event for Net audio, Microsoft announced its intent to make the Windows Media format a Net standard. (Ironically, Microsoft executives showed off a Rio player — the MP3 portable device that sent fear into the hearts of so many music execs –which can play songs using the Windows Media Player.)

Japan-based Softbank, always with its eye on e-commerce, recently announced plans to distribute songs on the Net at prices dramatically lower than store-bought CDs. The site is slated to go up in June.

All these stories are tangled up in the giant briar patch of digital music, an active yet thorny area of the Web where so much is at stake — e-economy, privacy, intellectual property, pop culture …

In case you haven’t noticed, a revolution in digital audio is going on, and the music biz and regulatory bodies are doing everything they can to catch up. It’s going to take a lot. Perhaps the recent crackdown will scare a few students away from using MP3 for outright piracy, but the bonfires are too big to extinguish now. Shut down one MP3 server in Boston and another will spring up to replace it in Bangkok.

While the line of scrimmage isn’t clear, a fierce struggle is taking place between those who want music to be free (literally and/or metaphorically) and those looking to make big bucks (and they will be made sooner or later). There is a similar impasse between those who see Net music as promotion, as a direct link to consumers, and those who see it as something to be protected, encrypted and owned.

OK, so let’s hit the play button: As I write this I’m listening to DJ Dusty’s Afternoon Nap, at 22 kHz, 56 bit, in stereo. It’s not an MP3 file but an MP3 audio stream, courtesy of GreenWitch.com out of San Francisco. The quality? I don’t have an engineer’s ears, but it sounds just as good as CD. No static, no network burps. It’s definitely a far cry from what I heard on RealAudio three years ago. (It’s also more fun. My audio player, Macast, has neat interface doodads. One, for example, displays the ubiquitous dancing baby, jamming to the music.)

Some say that streaming, not MP3 files, is the future of digital music. As bandwidth grows and access fees flatten out, the convenience of streams — which you can listen to immediately instead of waiting for a download to finish — will be much more attractive.

Whether it will dominate or not, it’s become a vibrant movement, largely thanks to Shoutcast, a streaming format for the common Netizen. Unlike RealAudio, which requires expensive licenses in order to transmit, with Shoutcast (and other schemes such as Icecast and MyCaster) anybody can be a desktop DJ. There is a limit to how many people can tune into one “station,” but no lack of musical variety.

The Webcast community is relatively underground, and to organizations that collect royalties on copyrighted music, the streaming DJ is just another breed of lawbreaker. But like the MP3 posse, it’s not all about pirating. There are plenty of resources (try radiospy.com) for those who want to broadcast within the law — even if the boundaries are a bit fuzzy now.

Whatever your stance on copyrights may be, you can’t help but admire the free-flowing scene here that transcends the rules of marketing, the channels of distribution and the boundaries of genres. And who misses the tiresome DJ patter? Another charm point is the spontaneous communities that spring up around a DJ, whether he’s spinning drum ‘n’ bass at 3 a.m. in Antwerp or she’s swinging at noon in Portland. You can see how many listeners are grooving online with you, and at some sites chat simultaneously with your Net brothers and sisters.

The streaming cult is also significant as a grass-root software movement. As mentioned in a previous column, the MP3 revolution has nurtured innovations in interface, inspiring a surge of DIY designs via “skins” (the interface template of a certain applications). The software innovations, however, aren’t only skin deep. Take Icecast, the “open source” variant of Shoutcast. Like Linux, Icecast is a standard that any software developer can modify and one that already has a wide number of platforms. The community, found at www.icecast.org, can only make it stronger.

As with many Net trends, a community’s momentum can determine the future. The emergence of MP3 wouldn’t have scared RIAA if the Net hadn’t embraced it. Of course, pirating is bad, but perhaps the music industry should adjust its frequency and listen carefully to music-loving college kids. They know the market intimately. They are living and breathing in incredible test beds of broadband content. If anyone, they are the Netizens with their fingers on the fast-forward button.