Consumer Alert: Copy Controls Crackdown

The ISP Verizon Online recently buckled and gave the Recording Industry Association of America (RIAA) the names of four customers suspected of downloading large quantities of music from file-sharing sites in violation of the Digital Millennium Copyright Act. More than 40 privacy groups and ISPs are joining Verizon in fighting procedural aspects of the copyright holders' demands. But it is clear that customer privacy has sustained a hit.

The RIAA also recently settled with four university students who ran Napster-like file-sharing networks campuswide. Each agreed to pay $12,000 to $17,000, although the trade group had originally sought up to $150,000 per song. The RIAA warns that it may not settle on such lenient terms in the future.

For the moment, peer-to-peer networks sporting a copy-for-free business model continue to thrive despite being mired in lawsuits. But the line demarcating the lawful use of file-sharing technology may be shifting.

In April, a federal judge in Los Angeles dismissed an RIAA suit against file-sharing services Grokster and StreamCast Networks (maker of Morpheus), holding that peer-to-peer services are not liable for illegal file-trading over their networks. The RIAA is appealing the decision.

"That's the most important victory of the last three or four months," says Cory Doctorow, outreach director for the Electronic Frontier Foundation. Doctorow notes that it reinforces the Supreme Court's so-called Betamax decision of 1984, in which the court refused to ban legitimate products or services simply because they could also be used for illicit activities.

Even the act of copying DVD movies has a chance to prevail in court: 321 Studios is taking on Hollywood by claiming the right to market its DVD copying software. Its preemptive lawsuit against the major movie studios challenges the Digital Millennium Copyright Act's constitutionality. At the heart of the case--taken under advisement by a federal judge in May--is consumers' right to make back-up copies of DVDs.

Congress offers the public little hope of quick action, but copy-control legislation is nevertheless in the spotlight.

Several pieces of legislation would require labeling of CDs or DVDs that use digital rights management technology (also known as DRM). Other proposed measures would affirm consumers' right to back up digital material or to donate it, and try to balance fair use and copyright.

Also, the DMCA is undergoing its periodic review, facing several complaints about its regulation of copyright.

Ultimately, technology provides new opportunities for both vendors and users. Only 20 years ago, Hollywood feared piracy with the advent of VCRs--but instead prerecorded videotape has become a lucrative market.

Today, "consumers want new ways to get content easily," says Kirby Kish, director of digital technology for copy protection developer Macrovision.

Microsoft is licensing Macrovision technology for its Windows Media Player. The technology permits "dual sessions" on a disc, so that users can play the CD in a standard audio player but also can play a DRM-protected digital version in another device. Alternatively, vendors could stuff the extra session with additional material.

"They're still playing with a couple of different models, like bonus songs and other extra content," says Yankee Group consumer technology analyst Ryan Jones.

As another example, this fall Disney is testing DVD discs that become unreadable after 48 hours of play.

Whatever the final outcome of the DRM wars, today's digital technology is sufficiently flexible to give copyright holders many options on packaging content, Kish says.

"We really think of it as an enabling, not restrictive, technology," Kish says. He believes that success is a matter of educating both sides about the different methods possible.

The methods all share one thing in common, however: Users will have to pay.