The battle over online music drew stars to US Congress on Tuesday, as singer Alanis Morissette and former Eagles musician Don Henley joined Napster and record label executives to debate the future of Net music. Although no legislation was being discussed at the Senate Judiciary Committee hearing, the debate helped paint the picture of an increasingly fractious online music world, in which artists, labels, retailers and technology companies each are taking diverging positions. Much of the testimony indicated that the record labels are losing some control of the debate over file-swapping service Napster and the online distribution of music, even as their legal position has been shored up in court. "While I cannot speak for every artist, my initial resistance to the new services created online was based on the debate having been framed in terms of 'piracy'," Morissette told the Senate Judiciary Committee attendees. "Being labelled as such by the record companies, it understandably sent a ripple effect of panic throughout the artistic community. But what I have since come to realise is that for the majority of artists, this so-called 'piracy' may have actually been working in their favour." She spoke out on the importance of the relationship between musicians and their audience. She expressed hope that an interactive solution could be reached that would benefit music fans and musicians immediately and would also benefit record companies in the longer term. Nevertheless, there was no indication that lawmakers plan to turn debate into action any time soon. "I'd like this to be done without the heavy hand of Congress," Senate Judiciary Committee chairman Orrin Hatch (Republican) told the witnesses. "[But] we're going to have a lot more hearings to make sure that everyone here is considered." The answers to the questions raised Tuesday will ultimately go a long way toward determining whether music -- and movies and other digital works -- will be widely available on the Net or tightly controlled by the big music labels and Hollywood studios. Artists, labels, retail stores, tech startups and consumer all have a stake in the issue, as each group tries to position itself to gain leverage in a market still reeling under Napster's influence. For now, it is clear that the record labels are holding most of the cards, a situation that seemed to make some legislators uncomfortable. Several of the senators at the hearing wanted to know whether anything more could be done to spur the release of music online, ranging from small tax incentives to "compulsory licensing" of the type that feeds radio stations and cable TV. Most of the witnesses shied away from the question or said Congress should not be involved. It was left to Napster, reeling under a series of court losses that threaten to put it out of business, to call explicitly for congressional intervention. "I believe it will take an act of Congress -- a change to the laws to provide a compulsory licence for the transmission of music over the Internet," Napster chief executive Hank Barry told the panel. "The Internet needs a simple and comprehensive solution, similar to the one that allowed radio to succeed -- not another decade of litigation." Despite chastising record labels for not pursuing a marketplace solution, Henley also said he would welcome the involvement of Congress -- possibly in the form of an online compulsory licence -- "if a resolution cannot be reached quickly". But that proposal was met with some scepticism from the committee's top Democrat, Patrick Leahy of Vermont, who said that "many in the Senate and in the House, for that matter, feel that we don't want to... jumpstart things with a compulsory licence". Most of the participants in Tuesday's hearings -- which represented many different sides of the online copyright debates -- agreed on a broad goal for the online content market: entire music catalogues, and ultimately movies, should be available widely online. This is happening, and not as slowly as many people believe, contended Hilary Rosen, chief executive of the Recording Industry Association of America. Before Napster, companies both in and out of the traditional music industry believed that delivering singles was enough, she said. But consumers' response to Napster changed those assumptions, and the labels are working as quickly as they can to react. "The business-model thinking has completely evolved since that time," Rosen said. "Napster a year ago said they wanted a legitimate service, and they haven't been able to do it. This is not an easy thing to do." Rosen and Richard Parsons, co-chief operation officer at AOL Time Warner, cited a February decision against Napster by the 9th US Circuit Court of Appeals as a watershed moment, when the online world realised it had to "stop living in a dreamland" and abide by copyrights. That ruling helped spur a partnership among AOL Time Warner, EMI Recorded Music and BMG Entertainment to distribute music via RealNetworks through a service tentatively called MusicNet, Parsons said. "The digital distribution of entertainment content is a real business and will grow exponentially," Parsons said, professing that the market was moving quickly and MusicNet would be available "late summer or early fall". Sony Music Group and Vivendi Universal's Universal Music Group are forming their own subscription service, dubbed Duet. The head of independent music label TVT Records, Steve Gottlieb, told the committee that "without Congress the online music industry may be dominated by owners of the most content", namely the labels behind MusicNet and Duet. "The largest aggregators of content could gain undue advantage and institutionalise positions of dominance." Despite its violation of intellectual property rights, Gottlieb could praise Napster because "all music is available on an equal footing". ZDNet UK Staff contributed to this report. Take me to the MP3 Special Have your say instantly, and see what others have said. Click on the TalkBack button and go to the Napster Debate. Let the editors know what you think in the Mailroom. And read what others have said.