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Copyright War, Take Two
by Drew Clark
If legislative battles were like movies, the war that is about to explode on Capitol Hill would be dubbed Silicon Valley vs. Hollywood: The Sequel.
The previews appeared last week, as draft versions of sweeping copyright legislation about to be introduced by Senate Commerce Committee Chairman Ernest (Fritz) Hollings, D-S.C., began to circulate. Backed by some of the biggest Hollywood studios, the proposal -- which would bar the manufacture of digital devices that do not include government-sanctioned copyright-protection technologies -- is regarded as anathema by the computer and software industries, and industry officials said they are readying their troops for a long-fought confrontation.
The vituperative scuffle could even exceed the original Internet showdown over the 1998 Digital Millennium Copyright Act (DMCA), which pitted content owners against Internet service providers. Although the two sides eventually reached a compromise acceptable to both, electronic liberties groups charge that the law bars free speech about technologies that could be used to circumvent copyright protections.
The new battle only raises the stakes because it goes to the heart of what many observers consider to be the Internet's next major phase -- high-speed Internet access, or broadband -- and because it would extend the DMCA's criminal framework to apply not just to technologies that pick locks, but also to technologies without locks.
Broadband Raises The Stakes
Hollings' proposal seems tailor-made to suit the demand of certain Hollywood studio officials who argue that such protection is necessary to help secure their copyrights for costly movies they want to broadcast digitally or over the Internet. Walt Disney and New Corp. have been most vocal in their support of the Hollings' plan.
The issue has added salience because of the technology industry's lust for broadband. When many tech leaders congregated at a Progress and Freedom Foundation (PFF) conference in Aspen, Colo., late last month, the closest they came to a consensus was that their industry needs to try to break the deadlock over a bill, H.R. 1542, designed to spur broadband deployment.
But while the technology industry sees broadband as a savior, Hollywood sees widespread high-speed Internet access as a recipe for movie piracy on a far broader scale. Because they own copyrights to some of the prime content expected to be pushed through the high-speed data pipes, they view the situation with more than a little proprietary interest.
When Hewlett-Packard CEO Carly Fiorina suggested an alliance between technology and telecom players to push for broadband in her keynote address at Aspen, one of the first to raise an objection was Fritz Attaway, the executive vice president for government affairs of the Motion Picture Association of America (MPAA).
"In your prepared remarks on information technology and telecom joining forces to drive broadband, you didn't include the content industry, which I think deserves a seat at the table," Attaway said.
"The reason for the oversight is that the content industry has taken a more visible leadership role than the information technology industry" thus far, Fiorina said.
Taking The Gloves Off
The divisions became much more pointed in a dinner discussion on copyright issues held the next day. In one exchange, Attaway charged that the technology industry was not willing to play ball.
"High-definition recent [movie] releases absolutely must have a secure distribution path to the consumer," Attaway said. Releasing digital movies via satellite and cable systems works because the manufacturers of such systems put copy-protection technologies into their devices. But Internet-based distribution is another story entirely.
"Unfortunately, some segments of the information technology industry have not reached this conclusion," he said. "The information technology industry rebels at that very thought of producing a trusted device" -- or a computer with its copying functions disabled. "I think that is a shame because it is going to drive high-quality content to cable, satellite and other secure distribution systems and away from the Internet."
Several tech officials snapped right back at Attaway's contention. "We take a back seat to no one in protecting intellectual property," said Rhett Dawson, president of the Information Technology Industry Council (ITI). "We are committed to protecting your intellectual property, but we are not committed to protecting your business model."
In other words, tech industry officials are not willing to short-circuit competition and permit the motion picture or recording industries to assert that their shares of the market for distribution of entertainment goods are a right. They will have to earn it by offering competitive services that consumers will support.
That is the same mantra that webcasters of digital music use to argue in support of a bill, H.R. 2724, that they say would open their market to Internet streaming by players besides the copyright owners.
The 'Disney Chip'
Tech officials say the Hollings draft bill would put the government more directly in the bowels of their engineering and design processes. The measure would require the Commerce Secretary to set "standards that will provide effective security for content" -- essentially mandating the presence of what some industry officials have dubbed the "Disney chip" -- based on their reliability and resistance to hacking attacks.
The proposal also would criminalize the removal of such technology and bar the transmission of copyrighted material if the technology has been removed or altered. As drafted, the legislation would give consumer electronics manufacturers and copyright owners up to 18 months to reach an agreement on a "security standard." If they cannot agree, the bill would require the Commerce Department to initiate a rulemaking process and set the standard within a year.
The industry's objects to Hollings' proposal, sources said, because it presumes bad faith on the part of private-sector parties who are negotiating standards for copyright protection. They also argue that Commerce Department bureaucrats are ill-suited to design such protections, that it makes little sense to lock rapidly-changing standards into law, and that legislatively setting standards removes incentives for companies to design a better system.
Disney officials counter that everyone will benefit from the new rules. "Having rich content provided through broadband is going to explode broadband through the country," said Richard Bates, the vice president of government relations for Walt Disney. "Broadband has been stalled, and I think one of the reasons is that there is not rich content. If we have copyright protection, and we can put a broad array" of movies on the Internet, "Cisco will sell more routers, Dell will sell more computers, and it should be good for everyone."
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