[FYI] (Fwd) FC: CEA's Gary Shapiro: P2P file swapping is both legal and moral

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

------- Forwarded message follows -------
Date sent:      	Wed, 18 Sep 2002 22:35:19 -0700
To:             	politech@politechbot.com
From:           	Declan McCullagh <declan@well.com>
Subject:        	FC: CEA's Gary Shapiro: P2P file swapping is both legal and moral
Send reply to:  	declan@well.com

Some background:
http://www.ce.org/press_room/press_release_detail.asp?id=10027
http://www.ce.org/press_room/speech.doc
http://news.com.com/2100-1023-958324.html?tag=cd_mh

File photo:
http://www.mccullagh.org/image/d30-25/gary-shapiro.html

-Declan

---

Speech by Gary Shapiro, President and CEO of the Consumer Electronics
Association.

The Campaign to Have Copyright Interests Trump Technology and Consumer
Rights

We are at a critical juncture in history when the inevitable growth of
technology is conflicting with the rising power and strength of
copyright owners.  How we resolve this tension between copyright and
technology will define our future ability to communicate, create and
share information, education and entertainment.

Today I would like to share with you my views on this situation and
the questions we must confront as we wind through this confusing, but
historic maze.

There is no doubt that this era’s rapid shift to digital and other
technology is changing the rules of the game. Reproduction,
transmission and storage technology all are progressing exponentially,
resulting in an unprecedented power to copy, send and save all forms
of media. Reproduction technology has become incredibly cheap and
reliable. Transmission technology, including satellite, cable,
broadcast, wired or wireless, and often connecting through the
Internet, has linked everyone at ever increasing speeds and
competitive pricing. Storage technologies also quickly have expanded
in capacity as total storage media costs have plummeted.

With each new technology, the fears of the music and motion picture
industries have grown. With television and the VCR, it was going to be
the end of movies. With CDs and cassettes, it was the supposed harm
from real-time transfers and one-at-a-time copies. Today’s
technologies make these perceived threats seem naïve and harmless.
With high-speed connectivity and the Internet, it’s not buying a CD
and making a copy for a friend; it’s downloading from a stranger or
making available thousands of copies with the touch of a keystroke.

The growth of reproduction, storage and transmission technology has
terrified copyright owners. The RIAA claims that 3.6 billion songs are
downloaded each month. The RIAA also estimates that $4.5 billion has
been lost by the music industry due to pirating. And the motion
picture industry also sees the writing on the wall. Fox Group CEO and
News Corp. President Peter Chernin in an August 21 keynote speech at
an Aspen conference claimed that Spiderman and the latest Star Wars
movie were downloaded four million times following the weekend after
their release.

Based on these and similar threats the content community has gone on a
scorched earth campaign ­ attacking and burning several new recording
and peer-to-peer technologies. They have used the Congress, media and
courts to challenge the legality of technology and morality and
legality of recording. In the same Aspen speech, Chernin attacked
computers as untrustworthy and the Internet as primarily used for
pornography and downloading.

I believe that hardware and software companies have a mutual interest
in working together, so that they can sell more products. For years,
consumer electronics companies have been working with both the
recording and motion picture industries on developing technological
measures that meet the needs of both industries. For instance, the DVD
standard includes anti-copying protection. It also includes an
anti-fast forward technology designed to ensure copyright warnings are
shown, but instead is being used to require consumers to sit through
movie previews. CE companies also have provided digital interfaces
that allow consumers to share content among their own devices while
restricting unauthorized redistribution to the Internet. By protecting
content at the source, content providers can be assured their
intellectual property rights are respected, while consumers can enjoy
unimpeded personal use. However, source protection should not be used
to mislead consumers to purchase CDs that can only be played on
certain CD players.

Indeed, despite the cooperative efforts, the copyright community has
declared war on technology and is using lawsuits, legislatures and
clever public relations to restrict the ability to sell and use new
technologies. Lawsuits have shut down file-sharing services like
Napster and Aimster, and threaten peer-to-peer networks like KaZaa and
Morpheus. They unsuccessfully challenged the legality of MPs recorders
in the Diamond Multimedia case. They have challenged as illegal
ReplayTV, a TIVO-like device, which allows television programming to
be sorted and stored on a hard disc and which allows a consumer to
skip commercials. In fact, one TV executive equated the skipping of
commercials as “stealing” free broadcast television. The RIAA has
announced that it will start suing individuals who engage in file
sharing and has subpoenaed Internet access provider Verizon to
identify a downloading subscriber.

At the urging of the content community, Congress has stepped into the
act. Legislation has been introduced which requires all technologies
to be shaped by a government-mandated copy protection system. Other
legislation allows any copyright owner to seek and destroy the posting
of copyrighted products on P2P networks via personal computers
connected to the Internet. Still other legislation would allow a
content owner to insert an embedded watermark into the work to
determine if there was infringement and, at the content owner’s
discretion, disable the device, even if, upon subsequent
determination, the use was lawful.

The most recent and scary development is that the United States
Department of Justice is threatening to jail millions of Americans who
use file- sharing services. In a presentation at the Progress and
Freedom Foundation’s Aspen Summit on August 21, Deputy Assistant
Attorney General John Malcolm said that peer-to-peer sharing is piracy
and a criminal offense.

With this pronouncement, along with similar euphemisms by the media,
it is clear that the copyright community has reshaped the debate. All
of a sudden, the downloading of a song to sample an artist’s wares,
behavior most Americans between 13 and 25 engage in regularly, has
been likened to a criminal act.

Consider the clever public relations campaign of the content
community. They’ve changed the simple language that describes the acts
at issue. It used to be called “taping”, “reproducing” or
“downloading”, and advocates on both sides would call it “unauthorized
reproduction” or “unauthorized taping”. Then somehow this use of
technology shifted to the more pejorative and sinister “copying”. The
word “copying” sounds bad. It got you in big trouble in high school on
a test. “Copying” is a sister to “plagiarism” which is especially bad.

But in the past few months, Hollywood and the music industry have
shifted to different words. They now only talk about downloading as
“piracy”. They call it “stealing” and always use analogies to
shoplifting products out of a store. The Justice Department has
adopted this approach. “Stealing is stealing is stealing,” said
Malcolm in Aspen.

At the same conference, Chernin echoed these themes and used the words
“piracy”, “shoplifting” and “stealing” repeatedly to describe
downloading. He even declared that those who disagree with his views
on copyright are either “amoral or self-interested”.

Another way copyright owners have distorted the debate is to tie in
downloading with our national goal of broadband deployment. They argue
that broadband demand will not grow until this issue is resolved.
Indeed, Senators Holling’s legislation is called “The Consumer
Broadband and Digital Television and Promotion Act”. Yet broadband
deployment has little to do with songs and movies, and more to do with
fast Internet speed, always- on convenience, exchanging home videos,
interactivity on the web and a range of potential uses for education,
medicine, business, shopping and gaming. Yet, some legislators have
become confused and convinced by Hollywood that there is a connection
between broadband and copyright.

A third way that the copyright community has reshaped and redefined
the debate is almost biblical in its reach. The entire theme of the
copyright community is that downloading off the Web is both illegal
and immoral.

But is it either? I submit it is neither.

Despite the assertions of the Justice Department, downloading is not
illegal.

First, fair use rights are guaranteed to consumers by statute, and
applied judicially on a case-by-case basis. This means that, while
some consumer practices ultimately could be adjudicated as either fair
use or infringement, there is scant basis for challenging them as
criminal.

The music and film industries claim that there is no such thing as
fair use "rights" in an attempt to disparage the term. They say that
fair use is only an affirmative defense to copyright infringement and
therefore not a right. But various recognized "rights" only may be
asserted as affirmative defenses in a lawsuit. For example, in a
slander suit, one may assert the First Amendment right but only as an
affirmative defense; this does not diminish the fact that the right
exists.

Second, time after time, practices of individuals that were initially
equated with "piracy" or "theft" have been shown to be neutral or
beneficial to copyright owners, and have either been tolerated or
accepted as fair use. Think of the VCR and the Supreme Court decision
holding that its use to tape full movies is fully legal.

Third, the 1997 NET Act's requirement of a total retail value of
$1,000 per infringement should be taken seriously as a barrier to
bringing cases against ordinary consumers. This law should not be
re-interpreted, after the fact, as a criminal enforcement vehicle
against consumer-to-consumer recording and "swapping" practices.

Downloading is not immoral either. To make downloading immoral, you
have to accept that copyrighted products are governed by the same
moral and legal principles as real property, thus the recent and
continuous reference by the copyright community to label downloading
as stealing. But the fact is that real and intellectual property are
different and are governed by different principles. Downloading a
copyrighted product does not diminish the product, as would be the
case of taking and using tangible property such as a dress. At worst,
it is depriving the copyright owner of a potential sale. Indeed, it
may be causing a sale (through familiarity) or even more likely, have
no impact on the sale. My son often will become familiar with artists
through downloading their music on the Internet and then go out and
buy the CD.

The comparison to real property fails for several other reasons. Real
property is subject to ownership taxes. Real property lasts forever
and can be owned forever. A copyright can be owned only for a limited
period of time. Indeed, the United States Constitution declares this.
More, copyright law must bow to the First Amendment that expressly
allows people to use a copyrighted product without the permission of
the copyright owner. This concern contributes to the statutory and
judicial concept of “fair use”. The First Amendment includes, not only
the right to send, but also the right to receive. Indeed, in 1984, the
U.S. Supreme Court in declaring the VCR a legal product, said that it
could be okay to copy an entire copyrighted product. So if the Supreme
Court expressly held that VCR copying in the home for non-commercial
purposes is a legal activity, how is it suddenly labeled as “piracy”
because the device is a computer?

The major record labels concede that they totally have failed to
transform their business models in response to the Internet. But then
they whine that they “cannot compete with free”, referring to the free
downloading the Internet allows. While I am sympathetic to the radical
shift of selling a CD with a one good song for $20 to a marketplace
where consumers pick and choose which songs they want, I am not sure
this is the correct approach. For one thing, you can compete with
free. Purveyors of bottled water do it. America Online does it. Book
retailers do it with libraries. Independent online music services say
they can do it, if they can clear the rights.

The Beatles 1 album, which contained 30-year-old songs that could have
been downloaded for free from Napster-like services from day one, but
nevertheless sold some 26 million copies. Why? Because people were
willing to pay for the quality of a CD over the often barely
acceptable sound quality of a download using P2P services.

Of course, recording artists must make a living and should be paid.
Most consumers likely would pay a reasonable amount for quality
downloads, access to full catalogs and maybe some promotional items
such as concert tickets or hidden tracks on a CD. Artists even can get
new revenue from the Internet by identifying their fans and promoting
their concerts, new releases and other products. But the music
industry has made little effort to look at new business models or
provide a viable and attractive alternative to the downloading
services.

The recording industry and motion picture industry should stop
complaining so much and look for technological solutions to its own
problems.  Doesn’t it make more sense to protect content at the
source, using technologies that maintain consumer expectations for
personal use? Content providers would be served better by working with
technology companies to deploy these solutions rather than suing
everyone and lobbying Congress to legislate unreasonable and
consumer-unfriendly mandates.

Despite a lack of hits and a recession, music and movie sales are
holding their own. Compare this to real downfalls in other sectors
from telecommunications to IT to broadcasting, and you must ask
yourself if the Internet is actually a good thing for the copyright
community.

So where does this lead us? I submit that policymakers should follow
some basic principles:

First, do no harm. If we had previously heeded the concerns of the
creative community, we would have no radio, no TV, no VCR, no
computer, no e-mail and no Internet. Yet each of these technologies
has enhanced the revenue stream for copyright owners.

Second, advances in technology should not be restricted. We cannot
even imagine today what future advances we will choke off if we
artificially restrict technology. If we can envision technology
connecting the poorest in the world to medical information, to
education and to a better quality of life, we should be careful about
stifling its growth. Advances in technology also can supply tools to
content providers to help them manage digital rights in a manner that
takes into account consumers’ expectations.

Third, claims of harm should be greeted with great skepticism. Not
every recording is a lost sale. It actually may represent a stream of
future sales. Artists from Chuck D to Janis Ian to Courtney Love
support home recording rights for practical business reasons.

Fourth, copyright owners have a high burden of proof before any
technology should be restricted. Broadcasters and the motion picture
industry have come close to making the case that redistribution of
free, over-the-air broadcast television over the Internet is harmful
to the concept of free over- the-air broadcasting. This is an area
where careful legislation or regular legal review, respectful of
consumer rights and expectations, may be appropriate.

Fifth, copyright owners should continue developing ways to protect
their content at the source, rather than insisting that the burden
should be on the device that plays it. Perhaps they should consider a
more flexible business model that focuses on keeping honest people
honest. But, the corollary here is don’t sell CDs that don’t work on
many CD players.

Finally, any restrictions on technology should be narrowly crafted,
define limitations on abuse by copyright owners and define legitimate
consumer recording rights and expectations. For example, CEA supports
the distance education bill presented by Congressman Darrell Issa of
California and Rick Boucher of Virginia that addresses a specific IP
concern rather than attempting to legislate through a
one-size-fits-all approach. The Boucher- Issa bill reaffirms fair use
rights and would amend the Copyright Act to ensure educators can use
PCs and new technology to foster distance learning.

The collision course between copyright owners’ desire to preserve
existing business models and the inevitable development of newer,
better, faster and cheaper technologies need not be fatal. Our future
is bright if we resist the temptation to restrict technology. Digital
technology will foster a Renaissance of creativity. It will connect
our world and soon allow everyone to have low-cost access to
information, entertainment and education. If the play button becomes
the pay button, our very ability to raise the world’s standard of
living and education will be jeopardized. \




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