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This week in court

Entertainment industry and file-swapping companies plead their cases before the U.S. Supreme Court.

The Supreme Court cast a critical eye this week on the entertainment industry's proposals for quashing file swapping, while making clear they had little sympathy for ongoing piracy on peer-to-peer networks.

Attorneys for the major record labels and Hollywood studios argued in front of the court in one of the most closely watched copyright cases in decades, which many observers say could help set the ground rules in the entertainment and technology industries for years to come.

The justices were clear that they were concerned about the effect of their ruling on the ability of technology companies to create future products like Apple Computer's iPod. However, several appeared to seek a way of holding file-swapping companies responsible for the piracy on their networks without endangering other technology companies.

As influential as the case is likely to be, few believe the issue will end with the Supreme Court, whose decision is expected in June. Many observers expect the losing side to take its case to Congress after the court rules.

Earlier in the week, billionaire Mark Cuban revealed that he would finance Grokster's defense in the case.

In another case--one that could help determine the viability of the independent ISP business--the Supreme Court took a close look at whether cable companies could keep other service providers off their networks. The case, which pits the Federal Communications Commission and the cable industry against a small Internet service provider called Brand X, revolves around a highly technical legal definition of cable Internet.

The FCC has said that cable companies can be the only ones to offer high-speed Net services over their broadband lines, while Brand X and other ISPs say that cable networks should be like telephone lines, on which any ISP can offer services.

Several of the justices appeared to scratch their heads over why the two industries should be regulated differently.

"I think you can just as intelligently say it for (telephone) wire as you can for cable," said Justice David Souter, addressing an explanation by the cable industry's lawyer of why the industry was not obligated to share its networks.