My nasty, cynical self sees the Administration's sudden interest in this at precisely the time that the Administration is having difficulty getting its surveillance wish-list through Congress. Recently, the Administration got nailed trying to give the telcos retroactive immunity for participating in the NSA's domestic spying program. http://arstechnica.com/news.ars/post/20070504-bush-administration-proposes-retroactive-immunity-for-phone-companies.html
There is a considerable overlap between the kind of investigations into technologies for managing content and for exchanging copyrighted material (possible in violation of existing law). The proposed law extends the Administration's police power by allowing wiretaps on the basis of an "intent to infringe" and by making it easier to sieze computers.
Note there is (as far as I can determine) no threshold test for the possible scope of infringing activity. How hard would it be for the administration to trump up a lame "intent to infringe" warrant on anyone it wants to spy upon? All it takes is a broadband connection and a computer to provide the means for an "attempt." Unlike evidence needed to actually prove the likelyhood of a crime, the evidence needed to prove the mere intent to commit a crime seems scanty indeed.
Politically, so many of the leading Ds are in the pocket of the IP Mafia that those staunchly in favor of civil liberties are likely to roll over like kittens in catnip for this one. It's as if a portion of their brain shuts off. I swear to God, we may see Barbara Boxer and Dianne Feinstein become the greatest champions of expanding the Bush Administration's domestic spying power, because the MPAA asked for it.
But I'm just a nasty, cynical fellow.