An excellent entry point to the ongoing discussions surrounding music copyright at Matt Rolls a Hoover. Regarding compulsory licensing:
So here's the problem. The music industry has developed a business model that's in danger of being made obsolete. Compulsory licensing does not change that. The most it does is say, "In exchange for destroying your business, here's some cash."
At the moment, I'm thinking the industry need to fragment. The CD-selling industry isn't going to be destroyed by companies selling MP3s, as loads of people still want to buy CDs, as there are people who want to buy vinyl, minidiscs, OGG files and whatever else. If the record companies aren't going to start providing this at a reasonable cost (ie a cost that means the artists make the same amount of money they do now in total, regardless of the means of distribution), then compulsory licensing seems to be the only way forward. I'd love to set up a distribution channel for high-quality MP3s of the particular sub-genres of music in which I have the most interest, but currently anyone who wants to do this is forbidden from doing so, in the sole interest of the record industry.
As a side note, I think whoever employed Jack Valenti must be insane. I'm glad he's not in charge of organising ceasefire treaties anywhere in the world. For example:
"Grokster doesn't and hasn't ever condoned copyright infringement," [Grokster President Wayne] Rosso said. "We hope this sends a clear signal to the rights owners in this case to come to the table and sit down with us." Valenti said that wouldn't happen anytime soon.