RIAA hailed Fri.’s ruling by U.S. Dist. Judge Deborah Batts, Manh...

called the rejection only the first step in the case and said the company still believes the suit lacks merit. With the rejection of XM’s motion to dismiss, CEA said it “would be premature for Congress to act on this issue while the judicial process moves forward. Music lovers across the country are adopting innovative digital technologies to enjoy their lawfully acquired content where and when they want. We urge that they won’t be disenfranchised and business models will adapt to better serve today’s digital customers.” RIAA is pleased that the court rejected XM’s attempt to “misuse” the Audio Home Recording Act (AHRA) “as a legal loophole for distributing sound recordings to its subscribers,” said Gen. Counsel Steven Marks. “The AHRA was never intended to allow a service offering distributions of music to duck paying creators what they are due.” By declaring XM both broadcaster and distributor, the court is saying XM “directly competes with other distribution services like Rhapsody, Napster and iTunes,” Marks said: “It only follows that they should to obtain distribution licenses just as those services have. Parity among digital music services is a key issue in today’s marketplace… We hope this decision paves the way for resolving this case in the marketplace.” XM is confident the record labels’ suit is “without merit and that we will prevail,” a spokesman said: “At this stage of the proceeding, the court’s ruling is required to be based on the false characterizations set forth in the plaintiff’s complaint. The real facts strongly support our view that the lawsuit is barred by the Audio Home Recording Act. We look forward to making our case in court.”