Researchers at Harvard’s Berkman Center for Internet and Society were recently awarded a $600,000 grant to conduct a three-year study on models for the exchange of digital media, such as music and movies, over the Internet.

The grant, awarded by the MacArthur Foundation, will finance a new study by the Digital Media Project that will explore five models designed principally to address issues of file-sharing. The project includes studies of financial, legal and technological approaches to the current crisis in the recording and motion picture industries caused by the ready availability of pirated media, particularly over peer-to-peer file sharing networks such as Morpheus and Kazaa.

“All the people here disagree on which is the best system,” Berkman Center Executive Director John Palfrey said of the five models.

The first of the five models would leave the current system of nearly unrestricted file-sharing—punctuated by expensive lawsuits—as it is. However, most of the researchers agree that this system is neither the best solution, nor is it feasible in the long-term.

“It’s not a good idea to be suing your customers,” Palfrey said. “But I don’t blame the record companies; they’re backed into a corner.”

The motion picture and recording industries are more effective in protecting their copyright in the second model, and in another the media itself is protected through technological advances that prevent copying.

In a fourth model, files are treated much like telephone service or another public utility, with consumers paying a regular fee to a company similar in structure to AT&T or MCI.

The last model would have the government administer the financial aspect of the file-sharing process. Using revenues from taxes on Internet service or mp3 players, the government would then pay artists for their work based on a complex formula that takes into account the number of times the song or movie is accessed.

This model is similar, on a small scale, to what William Fisher, director of the Berkman Center, outlines in Promises to Keep, his forthcoming book on digital copyright. Under Fisher’s system, a government-managed distribution network would record when people accessed the work, then pay the artist in proportion to the number of hits.

Fisher estimated that the service could be supported by a tax of about $4.50 a month on Internet service and that it would save households hundreds of dollars.

Fisher said his plan could potentially contain a number of loopholes—such as non-paying users outside the United States—but said “that’s no worse than what we have now.”

Some researchers envisioned a co-operative solution based in part on the fifth model, in which artists bypassed record labels and charged low prices for their work, yet earned higher profits by distributing their songs online, where there are currently almost no market barriers to entry, instead of in storefronts.

Palfrey said he hopes to institute an “artistic co-op” where subscribers could pay monthly fees in order to download songs from an online music library, without mediation from record labels.

About a year of preparation led up to the Digital Media Project’s study, and earlier phases of the project included a conference on digital copyright that attracted participants from both academia and business, with representatives from companies like Microsoft and IBM.

Whatever the results of the study, Palfrey said the true measure of the study’s success will be whether or not its recommendations are taken up by industry and government.

“We get calls all the time from members of Congress,” he said.