January 23, 2003 1:23 PM PST

Tech firms fight copy-protection laws

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WASHINGTON--Technology groups are going on the offensive against Hollywood in a bitter dispute over a call for government-mandated copy protection.

A coalition of companies including Apple Computer, Microsoft, Dell Computer, Cisco Systems, Hewlett-Packard and Intel said Thursday that they had joined together to oppose legislation backed by the movie studios that would allow the U.S. government to set antipiracy standards for PCs and consumer-electronics devices.

Their specific target is a bill by Sen. Fritz Hollings, D-S.C., which was introduced last year but has yet to be introduced to the 108th Congress, which began its session this month. By demonstrating broad opposition to the idea, and by enlisting libertarian and conservative advocacy groups in their coalition, the firms hope to bottle up any similar proposal this year.

Fred McClure, a former aide to President George H.W. Bush and head of the Washington office of the Winstead Consulting Group, has been hired to lead the effort, called the Alliance for Digital Progress.

"We oppose efforts by Hollywood to use the government to design antipiracy technology," McClure said at a press conference in Washington on Thursday.

From Hollywood's perspective, billions of dollars are at stake in the struggle, with peer-to-peer piracy threatening to erode video sales and make movie theaters a less attractive option. Its method has been to seek anticopying technology in computer and electronics hardware, either through industry deals or government mandates--a move that's anathema to technology companies, which worry about problematic technology requirements and customer rejection.

McClure indicated that last week's announcement of a cessation of hostilities between the music industry and a pair of tech lobby groups would not change the coalition's strategy. As previously reported, the Motion Picture Association of America (MPAA) has been a far more vocal proponent of the Hollings bill and government mandates than the Recording Industry Association of America.

MPAA President Jack Valenti said last week that he was continuing to weigh approaches like the Hollings bill, which is called the Consumer Broadband and Digital Television Promotion Act (CBDTPA). In a statement Thursday, Valenti accused the tech coalition of warmongering.

"The MPAA is trying to reach a mutually agreeable conclusion whose aim it is to stop the thievery of films so that a legitimate digital marketplace can thrive," Valenti said. "We are not the enemy. We are not at war with the IT community. We are hoping that (future) meetings will produce amiable results. Which is why I am shaking my head in wonderment at this million-dollar campaign to deride us."

A spokesman for Hollings said on Thursday that the prospects for CBDTPA rest on the progress of copy-protection negotiations between the two industries.

"Hollings has not indicated whether or not he'd introduce it yet," spokesman Andy Davis said. "It's too early to say in this session. The determining factor will be the progress of private sector negotiations. That's his hope. What Hollings said when he introduced the bill, and what people forgot, is that legislation is his last choice. Hollings' preference is to have the private sector resolve this."

Shaky alliance
McClure, president of the Alliance for Digital Progress, would not say where the coalition stood on other copyright proposals before Congress and the Federal Communications Commission, or what he thought of industry-negotiated solutions that the government could possibly make mandatory.

If the government were to get involved, the newly formed coalition would fragment quickly. Included in it are free-market groups such as Americans for Tax Reform, Citizens Against Government Waste, the Washington Legal Foundation and the Competitive Enterprise Institute (CEI), which generally believe in a laissez-faire approach.

Solveig Singleton, a lawyer at coalition member CEI, said her group opposes any government mandates, even ones the technology industry and Hollywood agree are acceptable. Singleton said if that possibility ever becomes a reality, "at that point the libertarian elements of the coalition would break off."

By contrast, Joe Krause, co-founder of coalition member DigitalConsumer.org, said he's not necessarily opposed to government mandates. "If those pro-consumer, pro-fair-use purposes were in there, we'd go along with it," Krause said. "Our goal as an organization is to make sure that consumer fair-use rights are supported."

According to last year's version of CBDTPA, all "digital media devices" sold in the United States or shipped across state lines must include copy-protection mechanisms to be defined by the Federal Communications Commission. "Digital media device" is defined broadly: Any hardware or software that reproduces, displays or "retrieves or accesses" any kind of copyrighted work.

The FCC would have a year from the date the president signs the CBDTPA to decide whether representatives of "digital media device manufacturers, consumer groups and copyright owners" have reached a reasonable compromise on copy protection standards. These standards have to comply with guidelines set by CBDTPA, including being reliable, resistant to attack, upgradable and not too expensive.

As an incentive for the negotiators to reach a deal, the FCC is required to send an interim progress report to Congress six months after the law is enacted, while talks are still underway. After one year has elapsed, if the FCC concludes a reasonable agreement has been reached, the agency will approve the standards and give them the force of law. Otherwise the FCC will come up with its own regulations.

 

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