CNET reports that today marks the unveiling of the "Don't Induce Act" -- a proposal by SBC Communications, Verizon Communications, the Consumer Electronics Association (CEA) and others to narrow the proposed Induce Act to reduce the threat to the technology sector.

Unsurprisingly, the MPAA and RIAA are already attacking the proposal as dishonest and ineffective. I haven't seen it yet, but here's CNET's nutshell description:

The Don't Induce Act describes three requirements that would have to be met before a software distributor could be found liable: The "predominant" use of the program would have to be the mass, indiscriminate infringing redistribution of copyrighted works; the "commercial viability of the computer program" would have to be dependent on revenue derived from piracy; and the software distributor would have to have "undertaken conscious, recurring, persistent and deliberate acts" to encourage copyright infringement.

The proposal would also indemnify venture capital firms, payment services, financial services, Internet service providers, librarians and e-mail utilities. If the measure becomes law, anyone filing a "baseless lawsuit" under the Don't Induce Act could be heavily sanctioned with damages that are triple what would normally be levied.

Because the measure would only apply only to "commercial" activities, the proposal would not target free or open-source P2P clients.

Update: Ernie Miller has both cover letter and Don't Induce Act text. His take? "Frankly, my immediate reaction is that I am not so enamored of this proposal. It seems overly tailored to one particular use of technology. While I appreciate the narrowness of the drafting, I don't really like the special case it adds to copyright law."