IT, media companies find copyright common ground

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By Cara Garretson

(IDG) -- Either the witnesses who testified at a U.S. Senate hearing Thursday were on their best behavior, or the IT and entertainment industries really are coming to agreement on technology to combat digital copyright violations.

The Senate Judiciary Committee, led by Vermont Democrat Patrick Leahy held a hearing here to examine whether the government should get involved in protecting digital works, such as songs or movies, that fall victim to illegal distribution across the Internet. While many senators on the committee said they would prefer that the IT and entertainment industries work out a solution on their own, they wanted proof that progress is being made.

Reports have reached the committee that while the two industries have made some progress in developing such technology, that work has reached an impasse, Leahy said. Some members of the entertainment industry are now calling on Congress to give the IT industry a deadline for solving the remaining technological issues, or else hand the project over to a government agency.

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"This strikes me as wrong-headed," Leahy said. "Until differences are resolved (between the two industries), certainly no legislation will pass this year."

Those differences were on display at another Senate hearing just two weeks ago, when members of the IT and entertainment industries bickered over the viability of protecting copyright works from unlawful distribution once they've been unleashed on the Internet.

At that hearing, Walt Disney's Chairman and Chief Executive Officer (CEO) Michael Eisner implied that the IT industry is not rushing to find a solution to this problem because pirated content helps sell PCs; a claim that Intel's Executive Vice President Leslie Vadasz refuted.

Thursday's hearing was less volatile, as witnesses outlined the progress they've made in developing solutions and committed to working together further.

The IT industry loses about four times as much potential revenue to piracy as the entertainment industry, said Craig Barrett, Intel's CEO. "That gives a relative measure of how important it is to our industry to protect intellectual property," he said.

The two industries have been working together for six years to protect digital content, Barrett said, which has resulted in technology such as cryptographic tools to prevent copyright violations with DVDs. Currently they are focused on developing technology for three goals: to ensure that content digital televisions receive from over-the-air digital broadcasts cannot be pirated, to protect high-definition content when it's translated to an analog signal for traditional TV sets, and to prevent digital content from unauthorized distribution on the Web through peer-to-peer file sharing.

Barrett and other witnesses agreed that in these three areas, some legislation may be needed to create policy around the technology.

Yet the third issue appears to still be a topic of debate between the industries. Some content providers have suggested that the IT industry equip PCs with devices that scan all downloaded content and play back only the works that are authorized, or build a database of copyright material that each file traversing the Internet must be compared against -- concepts that Barrett finds analogous to wiretapping the Web.

"I don't even know how to do that technically, (never mind) the privacy issues," he said.

Instead, Barrett said that copyright content must be protected at the source by a watermark or other type of flag that prevents it from being copied, because once files are released on the Internet there's no way to distinguish a work that's copyright from one that isn't. In addition, the industries must work together through legal means, to shut down unauthorized distribution Web sites, and through business solutions, including sites that sell authorized digital content, to prevent illegal file-sharing.

Although the IT and entertainment industries haven't come to a solution for preventing unauthorized file-sharing, both Barrett and Richard Parsons, soon-to-be CEO of AOL Time Warner Inc. (AOLTW), stressed that the two groups will continue working together. (AOL Time Warner is the parent company of CNN.com.)

"We look forward to more cross-industry collaboration," Parsons said, adding that the two industries are heavily dependent on each other. As for Congress' role in the process, Parsons said that lawmakers should continue to inquire on the progress being made. "We need you to keep our feet to the fire," Parsons told the committee.

The consumer's role in digital copyright protection was represented at the hearing by Joe Kraus, founder of DigitalConsumer.org, an advocacy group formed to protect personal use rights. Kraus was also the founder of now defunct Excite@Home.

Before copyright protection technology goes any further, consumers' rights must be better defined, Kraus told the committee. Under the fair use clause in copyright law, consumers can make duplicates of copyright material they've purchased for their own personal use, such as creating compilation CDs or taping songs from discs to listen to in the car. Yet some emerging technology, such as copy-protected CDs that cannot be duplicated, trumps that fair use right.

DigitalConsumer.org wants Congress to consider its Consumer Technology Bill of Rights, which includes the right to time shift, or record audio or video for later consumption; to space shift, or copy digital works from one place, say a PC, to another, like a portable MP3 player; and to make backup copies of content.

Asked to comment on AOLTW's plans for the use of copy-protected CD, Parsons said that the company is experimenting with the technology and that it has released copy-protected music CDs in Germany and France to test the waters. However, since it is still unclear if such CDs can protect consumers' fair use rights, the company has not yet made a decision on the technology, Parsons said.

AOLTW has not released copy-protected CDs in the U.S. and has no plans to, according to a company spokeswoman.