[FYI] US-Rep. Howard Berman: "The future and fate of the technology sector is also inextricably tied tied to that of the enter

["Axel H Horns" <horns@ipjur.com>]

------- Forwarded message follows -------
Date sent:      	Fri, 28 Jun 2002 19:24:53 -0400
From:           	Declan McCullagh <declan@well.com>
To:             	politech@politechbot.com
Subject:        	FC: Rep. Howard Berman declares war on P2P networks, plans new laws
Send reply to:  	declan@well.com

Anyone got a copy of Rep. Berman's draft bill? Confidentiality
guaranteed, if you want it.

Shorter press release:
http://www.house.gov/berman/pr062502.htm

News coverage:
http://www.infoworld.com/articles/hn/xml/02/06/26/020626hncongressman.
xml?0628fram

Berman's contributors -- top industry is tv/movies/music:
http://www.opensecrets.org/politicians/indus.asp?CID=N00008094&cycle=2
002

-Declan

---

http://www.house.gov/berman/p2p062502.html

        Speech by the Honorable Howard L. Berman to the Computer and
                    Communications Industry Association
                 Regarding Solutions to Peer to Peer Piracy

                               June 25, 2002

   Thank you for inviting me to address you today.  I know it is a
   difficult time for many in the technology sector to focus on issues
   other than survival.  Further, with so many issues critical to
   national security on the congressional agenda, it is difficult for
   policymakers to focus on the future of technology.  However, it is
   important that the technology sector and government look beyond
   their immediate crises and make a concerted effort to remain
   engaged.

   Disengagement between the technology sector and government could
   stall your sectors, and the nations, recuperation and recovery. 
   Engagement, on the other hand, could actually accelerate the
   recovery.

   The future and fate of the technology sector is also inextricably
   tied to that of the entertainment industry.  Unlike those who
   present a vision of Hollywood vs. High-Tech, I believe the
   entertainment and technology industries have a symbiotic
   relationship.

   The technologies many of your companies produce, and the services
   they offer, present creators, artists, and media companies with
   untold new opportunities.  Interactive television, massively
   multiplayer computer games, computer animation, ebooks, digital
   photography, Internet music distribution, and P2P networks promise
   to greatly benefit creators and media companies alike.

   Likewise, entertainment and media products create demand for many
   of the technologies your companies produce.  Demand for the next
   generation of PCs - with faster chips, more processing power, and
   bigger hard drives - will come from consumers who want to play
   lifelike computer games, watch premium movies, and store music
   libraries.  Demand for broadband connections - and the routers,
   fiber, and wireless technologies that enable broadband - will be
   spurred by consumer demand for online movies, music, games,
   photographs, books, and software.  Thus, the next growth cycle for
   many technology companies depends, to a certain extent, on the
   availability of media products and services desired by consumers.

   While the symbiotic relationship between technology and media
   companies is self-evident, it must be nourished.  There are many
   obstacles to technology and media reaching their full symbiotic
   potential. Primary among these obstacles, I believe, is piracy of
   copyrighted works.

   There is no doubt that piracy causes substantial harm to copyright
   owners.  The evidence is everywhere and the numbers are staggering.
   In 2001, the U.S. recording industry lost $4.2 billion to
   hard-goods piracy worldwide, the U.S. movie industry lost $3
   billion to videocassette piracy, and the U.S. entertainment
   software industry lost $1.9 billion due to piracy in just fourteen
   countries.  In 2000, hard-goods piracy cost the U.S. business
   software industry alone $11.8 billion.

   These numbers only reflect hard-goods piracy.  Internet piracy
   losses are almost impossible to calculate, but by all indications
   these losses are even more staggering.  A recent report by Viant
   estimates that 400,000 to 600,000 pirate versions of movies are
   downloaded every day over the Internet.  In April 2002, 1.1 billion
   files - the vast majority containing copyrighted works - were
   downloaded through the KaZaA peer-to-peer file trading network. 
   Piracy is also widespread through FTP sites, IRC channels, and
   auction sites, but cannot effectively be quantified.

   Internet piracy threatens to undermine the symbiosis between the
   technology and media industries.  The widespread availability of
   pirate works online makes it difficult for copyright owners to
   develop viable Internet business models.  No matter what bells and
   whistles they add, copyright owners cannot compete with
   unauthorized Internet services that make their works available for
   free.

   There is no justification for Internet piracy.  There is no
   difference between pocketing a CD in a Tower Records and
   downloading copyrighted songs from Morpheus.  Theft is theft.

   Internet piracy is not promotional.  This argument is laughable
   sophistry.  There may be some who just want to try before they buy,
   - I dont question that - but the vast majority of illegal
   downloaders just want free stuff, and dont intend to purchase
   legitimate copies. Do I have proof?  Yes, I have both common sense,
   a rudimentary grasp of economics....and a college-age daughter.

   Internet piracy hurts consumers by undermining the incentive to
   create great new digital works and to offer consumers new
   opportunities to access and use those works.  Perhaps a little
   closer to home for me, Internet piracy threatens the jobs of the
   session musicians, actors, carpenters, seamstresses, writers,
   photographers, retailers and other folks in my district.

   Among Internet piracy problems, the most vexing is that presented
   by peer-to-peer, or P2P, networks.

   P2P networks represent as much of an opportunity as a threat to
   copyright creators.  P2P represents an efficient method of
   information transfer, has the potential to greatly reduce the costs
   associated with server-based distribution systems, and can support
   a variety of legitimate business models.

   Unfortunately, the primary current application of P2P networks is
   unbridled copyright piracy.

   The owners and creators of these copyrighted works have not
   authorized their distribution through these P2P networks, and P2P
   distribution of this scale does not fit into any conception of fair
   use.  Thus, there is no question that the vast majority of P2P
   downloads constitute copyright infringements for which the works'
   creators and owners receive no compensation.

   Simply put, P2P piracy must be cleaned up.  The question is how.

   The answer is most likely a holistic approach relying on a variety
   of solutions, none of which constitutes a silver bullet.  At least
   one of these solutions may require congressional action to make it
   effective.

   Many believe that an important part of the solution to piracy
   involves digital rights management, or DRM, technologies, which
   protect copyrighted works from unauthorized reproduction,
   performance, and distribution.

   I support the use of strong DRM technologies.  Such technologies
   not only help deter piracy, but are pro-consumer and
   pro-technology.

   Through DRM technologies, copyright creators can allow each
   consumer to make optimal use of the copyrighted work at a price
   that reflects the value of that use to the consumer.  No longer is
   a consumer forced to pay $150 for a permanent copy of software, or
   $13 for a music CD, if he wants just a one-time use, or a one-time
   listen.

   DRM technologies are pro-technology for the very reason that they
   represent a new technology industry unto itself.

   The development of strong, effective, consumer-friendly DRM
   technologies is not a foregone conclusion.  Significant debate
   swirls around the appropriateness of such technologies, the
   appropriate role of government in their creation, and the state of
   industry development efforts.

   I am not a fan of government mandates on technology, including
   government interference in the developing marketplace for DRM
   technologies.  The marketplace and copyright holders are most
   competent to pick the winners and losers among competing DRM
   technologies.  The marketplace and industry technologists are best
   suited to quickly adapt when DRM technologies are cracked.

   There are clearly times, however, when government can play an
   appropriate role in technology development.  When industry fails to
   create adequate technologies to serve a government need, the
   government must sometimes commission creation of such technologies.
   Similarly, when technologies obstruct a policy objective, the
   government must sometimes outlaw or limit such technologies.

   My impression is that there is a growing frustration in Congress
   with the apparent lack of progress in creating adequate and
   interoperable DRM standards.  This frustration does not bode well
   for those who oppose government mandates on DRM standards.

   No matter who is at fault for the failure to arrive at a consensus
   on DRM solutions, continued delay will result in increasing
   pressure to legislate.  Regardless of who is actually doing the
   foot-dragging, the failure of the marketplace to create adequate
   solutions will convince more and more Members of Congress that
   government intervention is necessary.

   While the development and deployment of DRM technologies should be
   encouraged, DRM technologies do not represent a complete solution
   to P2P piracy.  DRM solutions will not address the copyrighted
   works already in the clear on P2P networks.  DRM solutions will
   never be foolproof, and as each new generation of DRM solutions is
   cracked, the newly-unprotected copyrighted works will leak onto P2P
   networks.

   Shutting down all P2P systems is not a viable or desirable option.
   P2P systems have many positive uses and could actually benefit
   those copyright creators who choose to utilize them.  Shutting down
   all P2P networks would stifle innovation.  P2P networks must be
   cleaned up, not cleared out.

   The day for cleaning up P2P networks through court action may now
   be past.  While the 9th Circuit could shut Napster down because it
   utilized a central directory and centralized servers, the new P2P
   networks have engineered around that court decision by
   incorporating varying levels of decentralization.  It may be that
   truly decentralized P2P systems cannot be shut down, either by a
   court or technologically, unless the client P2P software is removed
   from each and every file trader's computer.

   Copyright infringement lawsuits against infringing P2P users have a
   role to play, but are not viable or socially desirable options for
   addressing all P2P piracy.  The costs of an all-out litigation
   approach would be staggering for all parties.  Litigation alone
   cannot be relied on to clean up P2P piracy.

   One approach for dealing with P2P piracy that has not been
   adequately explored is whether it could be addressed, at least
   partially, through technological self-help measures.

   Copyright owners could employ a variety of technological tools to
   prevent the distribution of copyrighted works over a P2P network.
   Interdiction, decoy, redirection, file-blocking, and spoofing
   technologies can help prevent unauthorized P2P distribution.

   Technological self-help measures are not particularly
   revolutionary. Satellite and cable companies periodically employ
   electronic countermeasures to thwart the theft of their signals and
   programming. Software companies have experimented for decades with
   a variety of technologies that disable software being used in
   violation of a license.

   When deployed to thwart P2P piracy, however, such technological
   self-help may run afoul of common law doctrines and state and
   federal statutes, including the federal Computer Fraud and Abuse
   Act.  In other words, while P2P technology is free to innovate new,
   more efficient methods of P2P distribution that further exacerbate
   the piracy problem, copyright owners are not equally free to craft
   technological responses.

   Congress should free copyright creators and owners to develop and
   deploy technological tools for addressing P2P piracy.  We could do
   this by creating a safe harbor from liability for copyright owners
   that use technological means to prevent the unauthorized
   distribution of their copyrighted works via P2P networks.

   Obviously, such legislation must be narrowly crafted, with strict
   bounds on acceptable behavior by the copyright owner.

   Such legislation should not allow a copyright owner to damage the
   property of a P2P file trader or any intermediaries, including
   ISPs. For instance, a copyright owner shouldnt be allowed to
   introduce a virus that disables the computer from which infringing
   works are being made available to a decentralized, P2P network.

   Such legislation should also provide for strong penalties against
   abuse of the authority provided by the safe harbor.  For instance,
   such legislation should ensure that a P2P file-trader who has been
   subjected to technological self-help measures has effective
   remedies if he believes a copyright owner has acted improperly.

   I believe such legislation would have a neutral, if not positive,
   effect on privacy rights.  A P2P user has no expectation of privacy
   in computer files that she makes publicly accessible through a P2P
   file-sharing network.  A P2P user must affirmatively decide to make
   a copyrighted work available to the world before any P2P
   interdiction would be countenanced by the proposed legislation. 
   Thus, to the extent a copyright owner is scouring these publicly
   accessible files to find copyright infringement, there is no
   privacy violation.

   No legislation can eradicate the problem of peer-to-peer piracy.
   However, enabling a content owner to take action to prevent an
   infringing file from being shared via P2P is an important first
   step toward a solution. Through this legislation, Congress can help
   the marketplace more effectively manage the problems associated
   with P2P file trading without interfering with the technology
   itself.

   In order to stimulate dialogue on this issue, I intend to introduce
   legislation creating such a safe harbor for technological self-help
   measures.  I will, of course, be happy to work to address any
   reasonable concerns expressed about such legislation.  I am hopeful
   that the Subcommittee on Courts, the Internet, and Intellectual
   Property will mark up this legislation in the remainder of the
   107th Congress.

   Thank you for giving me the opportunity to share my thoughts with
   you this morning.  I look forward to taking whatever questions you
   have.

###



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