March 25, 2002 10:30 AM PST

Proposed anti-piracy bill draws fire

SCOTTSDALE, Ariz.--Several government and industry leaders this weekend criticized proposed legislation that calls on hardware makers to help protect Hollywood's interests, saying lawmakers should not decide the tech industry's "winners and losers."

Sen. Maria Cantwell, D-Wash.; Les Vadasz, president of Intel Capital; Mitch Kapor, chairman of the Open Source Applications Foundation; and Hilary Rosen, CEO of the Recording Industry Association of America, engaged in a lively, sometimes heated, debate on recently proposed government controls on digital media devices. They met Sunday in an opening panel discussion at PC Forum, an annual technology conference hosted by author and technology pundit Esther Dyson.

The debate comes days after Sen. Ernest "Fritz" Hollings introduced a bill that would ultimately require computer and consumer electronics companies to build piracy-prevention software into their products. Called the Consumer Broadband and Digital Television Act--once known as the Security Systems Standards and Certification Act--the bill has some powerful lobbyists including Hollywood studios Walt Disney and 20th Century Fox.

Some on Sunday's panel suggested the bill would let the government choose the technological solution--and the companies--that would prevent consumers from downloading content such as movies for free over the Internet.

"I don't think people want government choosing winners and losers in technology," Cantwell said. "It's better for us to think about rights instead of picking winners and losers."

As unauthorized copies of songs and movies increasingly find their way onto the Internet, music labels and film studios are aggressively pushing for legal and technological solutions to digital piracy. Despite several years of discussions, the entertainment industry, technology companies and consumer groups have failed to reach a compromise. The new bill would give them one year to agree upon a standard; after that, regulators would step in to mandate a technology.

Cantwell, Rosen and other panel members said that despite some support in Congress, the bill is unlikely to pass because it would give legislators too much control in the nascent copy-protection industry. Cantwell in particular called for more public involvement in the debate.

Intel's Vadasz agreed, taking a dire view of the legislation.

"It would be awful if one party decided the technology, like Disney," said Vadasz. "There has to be more involvement by organizations...Both (the technology and entertainment) industries have the same end customers; it's to our advantage to satisfy the end customers or we don't have a business."

Kapor, founder of the Electronic Frontier Foundation and recently re-engaged with the organization, said the legislation mainly will be a lever for negotiation among industry representatives and government.

"It would have been naive to think that the Internet would stay open," said Kapor. "Large corporations are attempting to protect existing business models."

In addition, Kapor said new regulations on technology "are guaranteed not to work" because of rapid shifts in a still-developing industry. He worried that technology mandates would only harm innovation and investment in new companies.

Rosen, however, said the proposed bill is "recognition that people who make entertainment products are a value driver for technology products." But she added later that the movie industry is running into the same problems as the recording industry, and Hollywood is not heeding past lessons.

"It's amazing that they're not paying attention to what happened with music," she said. The film studios are "clearly waiting for the ideal security. You have to get out there and change your business model, and that lesson hasn't been learned yet.

"They're waiting for protections online, but guess what? People are already getting movies online. Those issues happened in music, and now it's happening in movies. And it's very difficult to find the balance."

Vadasz agreed that like the music industry, Hollywood must shift its business models to meet the needs of consumers. He criticized the entertainment industry's approach to thwarting digital piracy, saying it has been unwilling to work with technology companies on consumer-friendly solutions. Vadasz said that although the tech industry has been in talks with the entertainment industry about standards for six years, entertainment companies have yet to truly come to the table.

"The attitude is that, it's basically my way or the highway," he said. "It takes at least two to agree. What are we going to have, the Commerce Department (designing) the PC?"

 

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