Laws Loom in Digital Copyright Wars

WASHINGTON -- If the information technology industry and content providers can't agree on methods for protecting digital content soon, the U.S. government will find ways for them. That was the message a number of senators relayed during a hearing on Capitol Hill Thursday.

Operating under the assumption that members of both industries agree that unauthorized use of copyright content is theft, the U.S. Senate's Committee on Commerce, Science, and Transportation called a hearing to determine what roadblocks stand in the way of protecting this material, particularly content that is illegally distributed across the Web. The senators warned both industries that if they don't work out their differences soon, either regulatory bodies like the U.S. Federal Communications Commission or Congress itself will step in and set their own rules--a possibility the hearing witnesses expressed keen interest in avoiding.

Because content providers such as movie companies and record labels can't be assured that digital versions of the works they sell won't be pirated, they are reluctant to produce content for new digital technologies like broadband Internet connections and digital television sets. That, in turn, has stunted the adoption of those two technologies, said committee Chairman Senator Fritz Hollings, a Democrat from South Carolina.

"Most Americans don't want to pay $50 a month for faster access to e-mail," Hollings said, referring to the average cost of a residential broadband connection. "If more content were available online, consumers would come."

Inter-Industry Spat

Collaboration between the two industries, which has been going on for six years, has in fact made some headway in protecting digital content, according to Leslie Vadasz, executive vice president of Intel, who testified at the hearing. The PC industry, consumer electronics industry, and movie studios created the Copy Protection Technical Working Group (CPTWG) that has developed cryptographic tools to protect DVD content, he offered as an example.

CPTWG has not yet hammered out solutions in two areas: ensuring that content digital televisions receive from over-the-air digital broadcasts cannot be pirated, and protecting high-definition content when it's translated to an analog signal for traditional TV sets. The group plans to unveil a solution for the first problem by the end of March, Vadasz said.

The outstanding issue that Vadasz didn't mention, but that the two media company executives who also testified seemed most concerned about, is pirated content, such as movies and songs, that travels across the Web. Michael Eisner, chairman and chief executive officer of Disney, said he couldn't understand why the PC industry is hesitant to sell computers equipped with copyright protection devices, adding that perhaps it's better for business if they don't.

"Many people in technology say the killer app is pirated content," Eisner told the committee. "Some feel the availability of illegal content sells computers. It's very hard to negotiate with an industry that thinks its short-term growth is dependent on theft."

Eisner said he had difficulty reaching Intel executives to discuss digital content protection issues until the Senate committee announced the hearing, raising the possibility of legislation. On Wednesday top executives from Intel, Dell, Compaq, IBM, Microsoft, Unisys, Motorola, Intuit, and Sybase sent a letter to seven media executives urging inter-industry cooperation to protect digital content. Eisner and others questioned the timing of the letter.

"I don't want to single out Intel...but until the senators said they were considering legislation, we couldn't even have a conversation with them," he said. That the letter was sent a day before the hearing was merely coincidence, the Intel vice president said. Doubting that a company as big as Intel could pin its success to an illegal activity as Eisner suggested, Vadasz said "there has to be a balance between the protection we use and trampling on [consumers'] fair use" rights.

Balancing Rights

Another witness responded that the content providers' push to protect digital material doesn't eradicate fair use, which is a right granted under copyright law so that works may be reproduced for personal use.

"It's the transmission of digital copy on the Internet [that's the problem], we have no problem with using content in multiple ways in one's own home," said Peter Chernin, president and chief operating officer of News Corp.

The media executives and senators at the hearing pressed officials in the technology industry for a solution to stop Internet transmission of content that is obtained illegally, by stealing film off a video projector in a movie theater or videotaping the public showing of a movie, for example. But they didn't get the answer they were looking for.

"The question is, can we prevent file sharing on the Internet today? Of course not," said Robert Perry, vice president of marketing with Mitsubishi Digital Electronics America, who testified on behalf of the Home Recording Rights Coalition. "The IT industry can't arrest people with camcorders. We'll put commercially viable and reasonable safeguards in our products, but if a movie is stolen, we can't protect it."