Hollywood, techies square off over copy locks

The firefight over digital copy controls continues, with consumer advocates and software industry representatives accusing Hollywood of eroding fair-use rights in overzealous efforts to fight piracy.

A forum at the libertarian Cato Institute Wednesday featured some sharp exchanges between the adversaries. Heating up the issue is pending legislation that would require anti-piracy technology in all digital recording devices, such as DVD and CD-RW drives. Representatives of the entertainment industry say such controls are vital to stop losses from rampant piracy.

Copy locks are an abusive approach that penalizes all users, says Jonathan Potter, executive director of the Digital Media Association, and Jonathan Zuck, president of the Association for Competitive Technology. They led the charge against government-mandated anti-piracy technology, proposed in a bill by Sen. Ernest Hollings. The measure is in the Senate Commerce Committee, and it is too early to tell whether the bill will reach the U.S. Senate floor.

Zuck and Potter say such a measure would deny consumers fair use rights, which permit copying a DVD for a friend or making a duplicate CD to take to the beach.

Hollywood Suffers

But media company representatives at the forum say legislation for content protection is vital.

"We're dying the death of a thousand cuts," said Rick Lane, vice president of government affairs at News Corp., an entertainment, cable, and news company. "We have seen revenues decrease for theatrical releases as well as DVD sales because of the rampant piracy that is out there selling our content unauthorized."

Rather than "locking up" content, Lane said, his company wants to protect it from unauthorized use. The industry wants to be consumer-friendly, he said, but also needs a stronghold against the piracy that costs them billions of dollars every year.

Potter retorted that Lane's description is inaccurate.

"Rick talked about the unauthorized use of content," Potter said. "But sometimes, unauthorized use of content is legal." He pointed to the 1984 case of Sony Corp. v. Universal, when the U.S. Supreme Court ruled to protect consumers who used VCRs to make personal-use copies. Copyright-protected hardware under the Hollings bill would violate consumers' rights in the digital world, Potter says.

Hollywood's biggest piracy problem is internal, Potter added. Perfect, pirated copies of movies like Spiderman were uploaded onto the Internet a week before theatrical release, the result of "backdoor activity" by studio employees.

Mere Inconvenience?

In one biting exchange, Zuck said Lane's "extravagant anecdotes of piracy" exacerbate the movie and music companies' "crisis mentality," which Zuck called "ridiculous."

Casting himself as the voice of reason in a debate that has flown off its original path, Zuck, a software developer, acknowledged piracy is a legitimate problem. But he disputes the revenue devastation that Hollywood claims. The market, not the government, should handle the problem, he adds.

Lane's claim of copyright-holders' privileges drew back-up support from Stewart Verdery, senior legislative counsel for Vivendi Universal SA, whose Universal Studios is the world's second largest movie company.

Peer-to-peer file-sharing has hurt music labels to the tune of billions of dollars, Verdery said. Content owners have a right to protect their intellectual property, he added, saying consumer advocates exaggerate the tragedy of anti-piracy hardware and software.

Verdery compared a copy-protected DVD player to "tools with annoying safety devices, or cars with automatic seat belts."

"We live with inconveniences every day," Verdery said. "So what's the big problem?"

Sarah Deutsch, vice president and associate general counsel for Verizon, joined the anti-legislation camp. Verdery misrepresented the potential effect of copy controls on both consumers and the technology industry, she said.

"The Hollings bill would make us replace all our network equipment according to mandated digital standards," she said. "It would also allow the content people to put a limitless lockdown on their [material]." Deutsch instead advocates compulsory licensing for all copyrighted material, which she says strikes a balance in the debate between fair use and intellectual property.

(Anne Ju writes for the Medill News Service, a PC World affiliate.)

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