House Panel Probes Digital Content, Fair Use
The old tension between consumers’ idea of fair use and industry’s idea of intellectual property protection was a key theme of a Wed. House Commerce subcommittee hearing, the first of 2 on the content community’s intersection with the consumer electronics (CE) industry in the digital age. It doesn’t help to engage in a “chicken or egg” debate about what drives the information economy, Chmn. Stearns (R-Fla.) said. Film and TV content producers and technology innovators have a stake in each other’s success, he said. A 2nd hearing in late April will focus on the audio side of the industries.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Digital content creators have rights to protect their work but consumers have rights to fair use of digital content, Stearns said. Legislators and businesses including over-the-air, Web-based, satellite platforms must uphold the legal framework that binds the market, he said. It’s important to advance an environment in which the CE industry has freedom to engineer more distribution devices -- while maintaining incentives for content creation, Stearns said.
Hollywood is embracing new digital opportunities for getting content to consumers but innovation could be stronger with more secure content protection, MPAA Exec. Vp John Feehery said. In the months since the Supreme Court’s MGM v. Grokster ruling, having rules of the road has led to a burst of creative business activity, he told the subcommittee. That’s occurred because “what is bad for the black market is very good for the legitimate marketplace and what is good for the legitimate marketplace is good for consumers,” Feehery said.
Videogame products were “born digital and have always been digital,” so the industry has always needed to outpace piracy, said Entertainment Software Assn. (ESA) Vp Stevan Mitchell. The industry, $27 billion worldwide after 3 decades, is projected to hit $55 billion by 2009. ESA members have learned to use technological protection -- including DRM and disc-based authentication -- in ways that protect publishers’ investments and enhance consumer exposure and choice, he said. Existing laws work “extremely well” and “serve their purpose,” Mitchell said.
Sling Media CEO Blake Krikorian agreed, saying existing law provides a “solid base for innovation.” The pioneering on-the-go digital TV firm, with about 12 million subscribers, wouldn’t exist without fair use, he said. Krikorian urged lawmakers to remember the garage inventors at work on tomorrow’s hottest technologies who don’t have access to movie studios and broadcasters. When Sling started it was hard to raise money because the firm came under “the shadow of potential litigation,” which spooked investors. Innovators must be allowed to work under fair use doctrine and shouldn’t need advance approval from the content community, Krikorian said.
“Things are working they way they should today” with regard to laws and policies governing innovation, IP and content protections, said TiVo Vp Jim Denney. TiVO would be concerned about Congress mandating or endorsing a particular DRM, he said. As it stands, some proprietary protection mechanisms, like Apple’s DRM, are “basically impossible to work with” and companies like TiVo will “never be able to break into that realm.” Meantime, TiVo signed a deal with Microsoft so its series 3 box, announced in Jan., will support Windows Media DRM, he said. “The idea of interoperability is something consumers will have to grapple with,” Denney said.
CEA Pres. Gary Shapiro lauded the panel’s interest in Slingbox and TiVo “small entrepreneurial companies that represent the best of American innovation.” The companies’ technologies let consumers watch lawfully acquired content where and when the want, he said. “These products have nothing to do with P2P or mass, indiscriminate redistribution over the Internet,” Shapiro said: “They allow law-abiding consumers to use content they have already bought and paid for in new and flexible ways.” Like the Betamax and the iPod, the Slingbox and TiVo rely on fair use, he said.
Lawmakers asked Krikorian what impact Slingbox will have on broadcasting and cable companies, since the device allows subscribers to watch home TV from anywhere on a range of devices. Krikorian said broadcasters should see his technology as “the best thing since sliced bread.” In the home, broadcasters are losing customers to the Internet; Slingbox recaptures those audiences, he said. For example, Krikorian said, he was able to watch hometown KRON-TV on his laptop from his Washington hotel room before the hearing. When it comes to local ads and programming, stations should realize Slingbox is a “good thing.”
Meanwhile, Congress should change digital copyright laws that make enemies of artists and consumers and refit them to recognize emerging technologies, Ranking Member Schakowsky (D-Ill.) said. The Digital Millennium Copyright Act (DMCA) was meant to stop copyright infringement “but by trying to predict where the technology would take us, the DMCA was drafted with broad strokes that many argue went too far concerning fair use provisions of the copyright law,” she said. Schakowsky endorsed an environment in which fans and innovators aren’t considered criminals.