The Moving Picture: It IS Our Problem
Posted Aug 8, 2003

When my brother and I fought as children, my father would usually tell us to work it out among ourselves. The alternative, he darkly added, was that he would impose a solution that we would likely find much less acceptable.

This, in a nutshell, is the Consumer Broadband and Digital Television Promotion Act (CBDTPA) as proposed by Senator Hollings on March 21, 2002, which basically tells the computer industry and entertainment industries to agree on digital media security standards within 12 months lest the FCC set the standards for them. It seems simple enough, but judging from the response from the computer industry and trade press, the CBDTPA is nothing less than a full repeal of the Bill of Rights.

For example, on March 31, 2002, the Washington Post stated, "Your Fair Use rights—your ability to back up a record or put together your own music collection—would be at the sufferance of copyright owners alone." On April 8, MacObserver observed, "If you make copies of media that you purchased for your personal use, your Fair Use right to do so is going to magically disappear in a puff of smoke if this bill gets through."

Gateway Computer's Web site states, "There's even a bill before the U.S. Senate that would force the technology industry to implement anti-piracy technology that could prevent all digital copying—even copying that's legal today under U.S. copyright laws."

Fair Use

At the heart of the matter is Fair Use, or your ability to copy copyrighted materials. In 1984, in Sony v. Universal, et al. (aka "the Betamax Case"), the Supreme Court ruled that we could tape TV programs at home for replay at home, a ruling that still stands. The current position on audio CDs is best expressed in the FAQ to the Secure Digital Media Initiative (SDMI), which states, "The specification allows consumers to copy (rip) their CDs onto their computers for personal use (on their PC, on their portable devices, on their portable media, etc.). In fact, the specification enables consumers to do so as many times as they wish—as long as they have the original disc."

What's clear from the language of the CBDTPA is that no infringement or curbing of these Fair Use rights is intended. If the computer and entertainment industries can't reach agreement, the Act directs the Federal Communications Commission "to adopt security system standards and encoding rules that conform to the requirements of subsections (d) and (e)."

Section (e) states, "The encoding rules shall take into account the limitations on the exclusive rights of copyright owners, including the Fair Use doctrine." This seems clear enough, but since the right to burn and mix audio CDs wasn't specifically mentioned—while the right to copy TV signals was—we asked for further clarification from Senator Hollings' staff and the Recording Industry Association of America (RIAA). Spokesmen from both organizations flat-out stated that the CBDTPA won't impact current CD-Audio Fair Use standards.

We're all familiar with the interests this Act is designed to protect. Commonly quoted statistics include a decline of global music sales of 5% in 2001, which the RIAA attributes to the 23% of music fans who told them in a survey that they were buying less music because they could download it or copy a CD-ROM from a friend. Viant, a research company tracking Internet piracy reports that between 400,000 and 600,000 feature film copies are downloaded daily.

It's a Family Affair

The major villain and beneficiary, of course, is the computer industry. Take CD-R, software that enables CD ripping, and the Internet out of the picture, and no one would have ever heard of the RIAA. Turning this around, no one disputes that MP3 downloading has sold tons of CD-R burners, cable and DSL modems, and PCs. In fact, Gateway heavily promotes its CD-R capabilities on its Web site and in television advertisements.

Yet beyond the misinformation on Gateway's site, the computer industry's response to the entertainment community's plight has been embarrassingly disappointing. Intel's Andy Grove, in a letter to the Wall Street Journal about CBDTPA, stated, "The second question is, assuming effective protection schemes are possible, who should implement them? Is it the responsibility of the technology industry to protect other industries from the challenges that a new technology can bring?"

Yes, Mr. Grove, it is our responsibility—for two reasons. First, it's the "right" thing to do. The computer industry is benefiting from copyright violations that it enables. As a "good" partner, you should help fix it.

Second, it's in your long-term best interests. Intel likes downloadable digital movies because it puts the PC at the heart of the home entertainment system. It's Convergence 101, selling more Pentiums. But if the computer industry continues to ignore the business models of its entertainment partners, there will be no content to converge upon. You're killing the goose that lays the golden eggs.

It's time for the computer industry to remove its head from the sand and start to work on the least intrusive ways to implement the standards called for in the CBDTPA. As with the "resolutions" handed out by my father, the computer industry will be much better off formulating its own standards, instead of accepting those decreed by the FCC.