If you haven't already, check out the Derek Slater/Edward Felten blogalogue on the newly released Cato paper, Peer-to-Peer Networking and Digital Rights Management: How Market Tools Can Solve Copyright Problems -- a discussion that prompted Prof. Felten to define a new litmus test for whether the recording industry is truly competitive vs. a cartel:

• Derek Slater: "[The paper's arguments] highlight an important aspect of the current debate surrounding Grokster: what does it mean to support 'market forces' or the 'free market'? The paper's conclusion is that market forces will resolve copyright holders' concerns and the government should stay out. Yet, many would say that the DMCA and extended secondary liability are unfortunate interventions in the market."
  
• Ed Felten: "How can we tell whether the record industry is responding competitively to DRM? An interesting natural experiment is about to start. MP3Tunes, a new startup headed by serial entrepreneur Michael Robertson, is launching a new music service that sells songs in MP3 format. Will the major record companies license their catalogs for sale on MP3Tunes? In a competitive market, they would license to MP3Tunes."