The summit tackles some of the music industry’s most chronic topics, including the ongoing debate about music file sharing and downloading. Gary Shapiro, president of the Consumer Electronics Association (CEA), issued a passionate defense of consumers’ right to make personal copies of music, arguing that they simply want "to do what they’ve always been able to do" and accusing the music industry of trying to take those rights away. Mitch Bainwol, chairman and CEO of the Recording Industry Association of America (RIAA), meanwhile, accused Shapiro of "exaggeration".

Yes, it got chilly in the room for a while, but I don’t want to overstate the division. The CEA and RIAA will eventually need to compromise on a number of topics. The sniping is really just part of their ongoing negotiations. But while the RIAA claims to be willing to work with everyone on resolving these issues, they also seem prepared to continue their hard-line tactics as well. By the end of September the RIAA had filed another 762 copyright-infringement lawsuits against individuals trading music files. Eat the carrot. Now meet the stick.

It’s hard to know where musicians come down on this stuff. Shapiro got big applause when he said; "I don’t look at the RIAA member sales as a measure of the health of the music industry." But Bainwol also got a good reception whenever he talked about the need to strictly enforce copyrights. "Half the songwriters in Nashville are out of business," he said. "We’ve got to find a way to balance the integrity of the property with consumer satisfaction."

Ironically, a foot soldier in this battle for balance is Shawn Fanning, the guy who started this whole mess by creating the original Napster in 1999 and is now president of digital-rights-management firm SnoCap. After the RIAA sued his Napster venture out of existence, Fanning regrouped and started SnoCap to try to legitimize the peer-to-peer file sharing that had already filled the post-Napster vacuum. SnoCap essentially runs a database allowing rights holders to register their works, creating a system whereby owners can be compensated when their files trade over P2P networks. "It’s about providing more music to more people through more channels," he said during one of the panels. "The ultimate goal is to open it up."

I have listened to Fanning speak at numerous panels over the years, and I’m convinced that while he’s first and foremost a software geek, his love of music (especially the hard to find Indie stuff) is what drives him. It was what kept him up all night writing the Napster code. And I suspect it now drives him to promote SnoCap. When asked whether he had tried some of the new, "legit" post-Napster music services, he winced a bit. "I’ve tried it," he said. "I’m really not happy with the selection right now, to be honest." Then someone asked him whether he still uses the clandestine P2P services. "No comment," he said. He was sitting right next to Bainwol. Gutsy answer, dude.

Of course, it wasn’t all about file trading. The policy summit also tackled other hot topics, such as the promise of digital distribution. "For developing artists, digital distribution is a good thing," said eMusic CEO David Pakman. But experts acknowledged that digital distribution is far from a panacea. In many ways, the little guy faces the same classic problem: How to rise above the noise and marketing budgets of larger entities. "You really have that ability to pop up [in the digital realm]," said Kevin Arnold, founder and CEO of the Independent Online Distribution Alliance (IODA). "But in general, there’s good and bad."

Arnold said that major acts still get the best placement on iTunes because major labels can grant "favors" such as providing exclusive content. That pushes out smaller labels and individual artists that lack such bartering power. "I hate these exclusive games, but I have to play it because iTunes does it," said Tim Quirk, general manager of music content and programming at RealNetworks, whose Rhapsody music service competes with iTunes. But Quirk relayed one really interesting stat: While up to 25 percent of the streams on Rhapsody are generated from the top artists, some 75 percent are listening to indie artists as they hunt around for new music. "People are just going off on their own," he said.

That, more than anything, demonstrates the power of digital music. Most of us will never get on the home page of a big music engine, but people can at least still stumble across us in the digital world. And that’s more than can be said for record stores with limited shelf space.

At one point, Fanning said he likes subscription music services, which offer more freedom to sample and explore for one monthly fee. As someone who joined Yahoo! Music Unlimited a couple of months ago and is loving it, I have to agree. But the larger question is whether people will continue to download songs for a buck a pop when they can just access them any time they want for one monthly fee. At Yahoo!, I have so far downloaded more than 120 full albums to my hard drive—well over 2,000 songs. For $5 per month, I just can’t complain about that (although I wonder if Yahoo! is just waiting to raise its prices once they have me firmly in their clutches… we’ll see). I suspect that both the subscription and download models will prosper, with some fans preferring to "own" music and others content to rent.

Many panelists also agreed that portability is simply huge. Take podcasting, which allows people to listen to syndicated content that automatically updates every time they sync up their MP3 players. Candace Corrigan, songwriter and creator of "The Nashville Nobody Knows" podcast highlights artists who are outside the mainstream in a talk-show/music format. Indie country fans can listen whenever the mood strikes them and from anywhere they want. "In a few short years, all programming will be delivered to Americans on-demand," she said. Ali Partovi, CEO of GarageBand.com, said teenagers who would feel naked without an iPod or some other MP3 player on their hip are part of the "Generation i." And they’re sweeping the world. "They don’t listen to radio," he said. "They have iPods, and they want to fill them up."

As we head toward a future in which music becomes ubiquitous and accessible from just about anywhere (read May & June AP articles), it seems clear that the transition will be considerably messy. All sides will no doubt jostle for the best position and try to influence policymakers. The Future of Music Coalition policy summit doesn’t necessarily resolve these issues outright, but it spurs debate. And each year, it seems to bring the parties just a little bit closer to the common goal: A music industry that works well for all. We’re not there yet. But things are moving forward slowly.

(EDITOR’S NOTE: See the fun for yourself and watch video of this year’s panels.)

(Mike Grebb is a writer, journalist and singer/songwriter based in Washington, D.C. He has written for numerous publications, including Wired and Billboard. He just completed his debut solo record, Resolution, which is available at www.mikegrebb.com, as well as digitally on iTunes, MSN Music, Musicmatch, Yahoo! Music Unlimited and other sites. Mike will also be an instructor at a songwriting workshop in Takoma Park, MD, on Oct. 22. Check www.emergingsongwriters.com for sign-up info).