For independent artists like Chuck D, the Internet provides an opportunity for musicians to market their talent and make money without the interference of big music companies. Music executives such as Silverman say unregulated pirated music traveling across the Web threatens the core of their business.

Both sides made their case before Congress on Wednesday although neither pushed for federal legislation. And lawmakers seemed intent on giving the market time to adjust before acting.

“We’re still seeing what the courts are doing with the current laws,” said Rep. James Talent, R-Mo. and chairman of the Small Business Committee, which held the hearing. “What I wanted to do with this hearing is lay the groundwork for whatever action we may think is appropriate.”

Even so, the hearing indicated that the debate that lies ahead will be emotional as all sidesseek to define how music will be played over the Internet.

Basically, indie artists are arguing for direct-to-consumer marketing, without the entanglements of record company contracts and the cost of the standard music marketing strategy.

However, the recording industry has leveled its wrath at several businesses that allegedlypirate copyrighted music over the Internet. The most obvious target has been Napster Inc., a music sharing software company extremely popular among college students. It faces lawsuits from musicians including Dr. Dre and Metallica.

Napster allows users to search each others’ computers and exchange music stored in the popular MP3 format, which is used to copy songs from CDs onto hard drives. The company has argued it merely provides a conduit to this music and has done nothing illegal.

Tommy Boy’s Silverman described the attitude by music-sharing Web users as a “culture of infringement” which results in “perfectly reasonable people who would never walk into a Tower Records and steal a compact disc because they believe it to be wrong are doing the same thing on the Internet when they seek out and download illegal copies of music.”

Music companies, particularly small labels like Tommy Boy, are “losing money every time a user downloads a copy of a recording,” Silverman said, adding that his artists lose royalties from the practice. Some artists have refused to leave copies of works-in-progress at his office for fear the material may turn up on the Internet, he said.

Chuck D, who offers his music as well as tracks by new artists on his Web site, says the Internet poses a unique opportunity for consumers and artists, who no longer have to wait years to get a record out. He has been a vocal supporter of Napster and file-sharing technology.