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[infowar.de] law.com 16.1.02: A Cop in Every Computer
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Page printed from: http://www.law.com=20
A Cop in Every Computer=20
The content and technology industries differ over an initiative that would=
build infringement-sniffing powers into new computers=20
Mike Godwin
IP Worldwide=20
January 16, 2002=20
There's a war looming in cyberspace over copyright. The war will not be=
about whether to combat the spread of unauthorized copies of computer=
programs, music or movies. On that point, the combatants agree. This will=
be a war about tactics and solutions.=20
The content industry -- especially Hollywood and the record labels -- wants=
the solution built into computers and other digital devices, such as Palm=
Pilots and MP3 players. The industry also wants it built into software,=
operating systems, Web browsers, and routers -- the devices that guide=
Internet traffic. It's a solution designed around the assumption that=
nearly all computer and Internet users are potential large-scale=
infringers.=20
In short: The content industry wants to place a copyright cop in your=
computer. It also wants to station one anyplace else on the Internet where=
an unauthorized copy might be made.=20
And if the industry has its way, we all may feel the consequences. Digital=
videos you shot in 1999 may be unplayable on your computer in 2009. You may=
no longer be able to move music or video files around easily from one=
computer to another (from, say, a home desktop to a laptop or to a personal=
digital assistant).=20
The content companies, on the other hand, see something different at stake.=
In a speech before Congress in 2000, Michael Eisner, chief executive of The=
Walt Disney Co., voiced the worries of the content industry when he said=
that "the future of the American entertainment industry [and] the future of=
American consumer" is at stake over the issue.=20
The content companies, with Eisner in the lead, argue that failure to build=
copy protection into the very digital environment itself will lead to their=
industry's destruction.=20
In previous battles over copyright, Hollywood and the large record labels=
have received the full support of their powerful friends in the software=
and computer industry. But this time, many of the high-tech companies are=
on the other side. They're satisfied that current law -- rather than future=
Rube Goldberg design mandates -- can do the trick. "We think mandating=
these protections is an abysmally stupid idea," says Emery Simon, special=
counsel to the Business Software Alliance (BSA), an antipiracy trade group=
whose members include the Adobe, Microsoft, Intel and IBM corporations.=20
A recent legislative proposal floated by Fritz Hollings, D-S.C., chairman of=
the Senate commerce committee, is the most public manifestation of the=
content industry's struggle. The Hollings bill, called the Security System=
Standards and Certification Act (SSSCA), makes it a civil offense to make=
or sell digital technologies that do not contain what it calls "certified=
security technologies," built-in systems that prevent the copying of=
content.=20
Draft versions of the legislation, which hasn't yet been formally=
introduced, also would impose criminal penalties -- up to five years in=
prison -- upon anyone who alters existing security technologies or disables=
copy protection mechanisms.=20
There's more than one way to prevent copying of copyrighted content. Various=
approaches, sometimes referred to as digital-rights management schemes,=
exist. One general method, called encryption, involves scrambling content=
in a "digital envelope." Encryption is what protects DVD movie and video=
game software from piracy. But the content industry wants to do more than=
just protect content. If encryption is broken -- and hackers are often able=
to break it -- content is free to be copied. To prevent this, the industry=
wants content to be labeled or digitally "watermarked," and it wants=
computers and other devices to be redesigned to look for the watermark, and=
to limit copying accordingly.=20
Supporters of the Hollings proposal don't couch the legislation in terms of=
protecting embattled copyright interests. They frame it as a measure=
designed to promote digital content and the use of broadband, high-speed=
Internet services. If Hollywood could be assured that its content would be=
protected on the broadband Internet, the argument goes, it would develop=
more compelling programs for the Web and spur greater consumer demand for=
broadband.=20
An aide to the Senate commerce committee says there are likely to be=
hearings on the bill as early as February 2002; hearings that had been set=
for fall of 2001 were postponed because of the Senate anthrax scare.=20
Back in 1998, Hollywood, record labels and software and technology companies=
came together to support the Digital Millennium Copyright Act. That act --=
now law -- prohibited the creation, dissemination, and use of tools that=
circumvent digital-rights management technologies.=20
There won't be a similar broad-based coalition behind anything like the=
Hollings bill. Software and technology companies simply aren't ready for a=
state-ordered restructuring of their entire industrial sector. In remarks=
made in December at a business technology conference in Washington, D.C.,=
Intel Corp. chief executive Craig Barrett spoke out against legislation=
like the Hollings bill. Let the private sector work out its own systems for=
protecting copyright, Barrett said.=20
A few companies are so big and so diverse that they don't fall easily into=
the content or technology camp. AOL Time Warner, for example, is=
conflicted. The movie companies and other content producers under the AOL=
Time Warner umbrella tend to favor efforts that lock down cyberspace, but=
AOL itself and some of the company's cable subsidiaries oppose compulsory=
designs. "We like the DMCA," says Jill Lesser, AOL Time Warner's senior=
vice president for domestic public policy. "There isn't from our=
perspective a need for additional remedies of copyright violations."=20
Broad as it is, the Hollings proposal is only one small part of a global=
effort to make the digital world safe for copyrighted materials. Standards=
groups, industry gatherings and global business policy forums are all=
working to create industrywide standards that don't require the approval of=
lawmakers.=20
A group called 4C Entity is promoting a standard for building digital rights=
management into digital storage devices, such as hard drives and possibly=
writable CD-ROM drives (the devices that copy CD-ROMs). The 5C Consortium=
is developing a copy protection standard for digital television, and=
interindustry forums like the Content Protection Technology Working Group=
are also working on digital TV.=20
But the content industry complains that the standard-setting process is=
proceeding at a tortoise's pace. The Hollings bill is meant to speed up the=
process, acting as a lever to compel the technology companies to negotiate=
more and faster.=20
The movie and TV studios are trying to ward off a possible Napster-like=
scenario. Though the free music-sharing service is now gone, other=
file-sharing systems, more decentralized and less easy to sue, remain. And=
Napster's legacy still casts a shadow over the music industry -- and on the=
content owners as a whole. A technology expert at News Corporation says=
that Napster signals the music industry's downfall. Music fans are now=
accustomed to copying CDs with CD burners, and downloading music from the=
Internet as MP3 files. "Within five years," the expert says, "music will be=
a cottage industry."=20
Rubbish, responds Matthew Gerson, the vice president for public policy at=
Vivendi Universal S.A., which produces and sells both music (Universal=
Music Group) and movies (Universal Studios Inc.). "We know that if we build=
a safe, consumer-friendly site that has all the bells and whistles and=
features that music fans want, it will flourish," Gerson says. "Fans will=
have no trouble paying for the music that they love, and compensating the=
artists who bring it to them -- established stars as well as the new voices=
the labels introduce year after year."=20
But maintaining that model -- with the record label serving as the conduit=
between creation and consumption -- depends both on large streams of=
revenue and on control of copyrighted works. The Internet and digital=
technology could cut off the revenue stream by moving music consumers to a=
world in which trading music online for free is the norm.=20
The record labels and the movie and TV studios see watermarks --=
undetectable yet traceable digital imprints -- as their way to prevent a=
future world of widespread trading in free music, movies, and other types=
of content.=20
How would those watermarks work? For an example, let's use digital=
television, a nascent technology that transmits high-quality television=
broadcasts using a digital, rather than an analog, signal. A digital=
broadcast would include a watermark that identifies the content as=
copyrighted and might contain certain instructions. Devices and software=
designed according to the content-industry's mandate would look for the=
watermark. Those devices, in turn, would have strict limitations built in=
as to whether, and how often, a copy of that broadcast could be made.=20
The reverse might also be true: Those components might be designed not to=
play un-watermarked content. Otherwise, it would only encourage pirates to=
learn how to strip out the watermarks. In a world in which all consumer=
digital technology looks for watermarks, our legacy digital videos and MP3=
collections might no longer be playable.=20
Digital television is the most pressing worry. Unlike DVD movies, which are=
encrypted on disc and decrypted every time they're played, digital=
broadcast television must be delivered unscrambled. The Federal=
Communications Commission requires that broadcast television be sent in the=
clear as a matter of public policy.=20
The prospect of high-quality, unencrypted content, delivered digitally,=
scares Hollywood. Without watermarking, consumers could simply record their=
favorite shows, trade them with friends, or -- worst of all -- make them=
available on the Internet, =E0 la Napster.=20
Content owners are also worried about the computer as it becomes not just a=
stand-alone device but also a component within the overall home=
entertainment system.=20
Says the BSA's Simon: "That's the multipurpose device that has them=
terrified." The fear is that computers will leak copyrighted content all=
over the world, he says.=20
And that, says Simon, is why the Hollings legislation is so broadly drafted.=
It's designed to close up all the leaks that digital technology might pose.=
In the drafts made available in the fall of 2001, the Hollings bill would=
make it a civil offense to develop a new computer or related technology=
that does not include a federally approved security standard preventing the=
unlicensed copying of copyrighted works. In at least one version, the law=
would make it a felony to remove a watermark or flag from copyrighted=
content. It would also outlaw logging onto the Internet with any computer=
that removes or sidesteps the copy protection technology.=20
Before the draft legislation was circulated, "we didn't know how broad this=
was," says one lawyer for cable company interests. Many cable companies are=
worried that the measure will interfere with their customers' viewing=
experience.=20
Although the Hollings legislation is controversial, its supporters are=
working to garner support. Preston Padden, the executive vice president for=
government relations for Disney, traces the origins of the bill to the=
Global Business Dialog on e-Commerce, a public policy group whose members=
come from a wide range of businesses. The group's IP subcommittee is=
chaired by Eisner, who, after much give and take with software and computer=
companies, shepherded through language favoring government "facilitation"=
of copyright protection standards.=20
With the group's recommendations in hand, Eisner could go to Congress and=
say there was a general business consensus favoring the passage of new laws=
to protect content on the Internet.=20
But there is a big difference between what that group generally recommended=
and what the Hollings bill specifically proposes.=20
The devil will be in the details. IBM, Microsoft and other technology=
companies are all developing their own ways of protecting copyright. Their=
digital rights management schemes are generally based on encryption, not=
watermarks. These companies don't want design mandates, which would=
effectively kill a market they are poised to exploit.=20
Moreover, technology companies have a "philosophical problem" with being=
told how to build their technologies, says Disney's Padden. With the=
exception of export controls on encryption, the computer and software=
industry does not have much experience with government mandates.=20
Not surprisingly, Rick Lane, News Corp.'s vice president for governmental=
affairs, and the other content industry lawyers think that the computer=
companies need to get over it. After all, mandates have been a fact of life=
for the consumer electronics industry -- particularly radio and television=
equipment -- for decades. Forty years ago, for example, the government told=
television makers to build UHF-reception capability into all new TVs.=20
The real problem runs deeper than mere resistance to government control.=
There's a philosophical difference that separates the content industry from=
the technology companies. You can see that difference in the way each=
industry refers to its customers. The content companies refer to=
"consumers," while the tech industry refers to "users." If you see a world=
of "consumers," your major concern is setting prices at the right level, so=
that buyers will purchase your products -- while you still make money. You=
control access to your merchandise, and do everything you can to prevent=
theft. For the same reason that supermarkets have cameras by the door and=
bookstores have electronic theft detectors, content companies want copy=
protection to prevent theft of their wares. Allowing people to take stuff=
for free is inconsistent with their business model.=20
But if you see a world of "users," you want to give that market more=
features and powers for less money. The impulse to empower users was at the=
heart of the microcomputer revolution. Steve Jobs and Steve Wozniak, for=
example, founded Apple Computer Inc. partly because they wanted to put=
computing power into ordinary people's hands.=20
Redesigning the world of digital tools so that every device, application and=
operating system is on the lookout for copyrighted works is at odds with=
that view.=20
What gets lost in the debate is the voice of consumers -- whatever they are=
called. Maybe they are willing to trade away open, robust, relatively=
simple digital tools for a more constrained digital world in which they=
have more content choices. But maybe they aren't. The Hollings bill is=
unlikely to attract them to the debate, pitched as a "security standard"=
rather than as a new copyright law.=20
Like the larger philosophical war that is raging around the world in the=
aftermath of the terrorist attacks, the looming war between these two sides=
has the potential to be a long, difficult fight without a foreseeable=
conclusion. And if and when peace talks begin between the two sides,=
there's no guarantee that the rest of us will have a seat at the table.=20
=20
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