Attorneys general of 45 states have signed on to a letter urging P2P software companies such as Kazaa not to implement encryption or other identity-disguising features. The letter warns of legal consequences if the companies don't adequately warn consumers of the legal and security dangers of file sharing.

Company lawyers and the EFF have shot back that it's really not the states' business to tell software companies what features to implement and that states have no jurisdiction over copyright disputes that come after 1972.

This is true, but I think it misses two important points. One is that the Cartel is showing its strength. Some of these AGs sued the Cartel not too long ago for CD price fixing. Now they're best buddies?

Two, this is probably not an idle threat. This is probably the first move in a Cartel effort to open a new front in the Copyright wars. When (and I say when, not if) a state-level case is filed it won't be over Copyright - it'll be over consumer fraud or a similar state-level statute. State AGs sue big companies all the time - some make quite a name for themselves doing so.

The Federal court push against P2P has largely ground to a halt. The Cartel are losing hundreds of thousands, if not millions, of dollars per year on that fight. They need someone else to carry the legal ball for them, someone with a big budget and little consequence if they lose. State AGs fit this bill nicely.

Meanwhile the P2P companies will continue to bleed cash as they are forced to defend themselves in several states at once.

The Cartel are venal, but not stupid.

http://www.siliconvalley.com/mld/siliconvalley/9329960.htm

Edit: A reader pointed me to two other more knowledgeable bloggers' comments, which I should reference here. First up, Ed Felten points to some technical howlers in the AGs letter.

Over on Corante, Ernest Miller has a copy of the letter and he really rips it point by point.
Miller has some good points, but he veers into pointless political polemic (and I should know). I do respect a man who can use "full of bullshit" and "cheap sensationalism" as part of his rant.

I stand by my main point, though. The content of the letter is mostly irrelevant. What matters is that it was sent and what we make of that signal. I still predict nothing good can come of it.