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Hollywood Takes Aim
At Consumer Rights

By Greg Nyquist
GSNyquist@aol.com

 

Every year legislative bodies on the local, state and federal levels pass reams of new legislative bills - enough, it would appear, to wipe out entire forests. The media attempts to cover the "important" bills, but a great many slip through without much coverage nonetheless. Undoubtedly, many of these bills are of little if any significance to the lives of the vast majority of Americans. But there are a few that sneak through the cracks every now and again and turn out to be surprisingly influential. Consider the Reagan era partial deregulation of the banking and finance industries. Although the legislation allowed banks to continue to protect their customers with federal deposit insurance, they were nonetheless given a free hand to use these federally protected deposits in a manner they saw fit. This has helped spur a number of dubious financial practices, which ultimately would help bring about the difficulties we now find ourselves in. The particular combination of government support on the one side and deregulation and ill-regulation on the other has brought about a myriad of abuses on Wall Street, leading to a tenuous economic situation in which we find a vastly over-valued stock market stacked precariously on a mountain of corporate and consumer debt.

The legislation that brought about the "new era" economy of the last ten years belongs to the past. There is nothing we can do about it now except deal with the mess that it has made as best we can. Something can be done, however, about the hazardous legislation being considered by legislative assemblies across the country presently. One such bill is Senator Hollings' "Consumer Broadband and Digital Television Promotion Act," a piece of legislation purporting to protect digital content from piracy over the Internet. While this might appear a worthy goal deserving of the support of all honest men, Senator Hollings' bill fails to address abuses committed by companies who abuse copyright law for their own profit. The entertainment and software industries are quick to point out that laws designed to protect the printed word and analog sound recordings don't work so well with digital media. The new technology has forever changed the parameters of copyright protection, requiring a new approach to copyright protection. But this argument works both ways. True, digital content is easier to "pirate." But it is also subject to greater legal restrictions. Consumers have fewer rights in respect to digital media than they do in respect to books and tapes. I can buy a copyrighted book, read it, and then give it to someone else in my household, who can also read it, without ever worrying about issues of copyright infringement. But if I burn a copy of a CD and give it to someone else in my household, I'm guilty of copyright infringement.

Supporters of Senator Hollings' bill argue that there are critical differences between these two examples. A lent book is not “duplicated.” Only one person can read it at a time. There remains only one book. The CD, on the other hand, has suffered duplication: and worse, someone other than the original purchaser has been allowed to acquire a copy. But is this really so dreadful an outrage against the copyright privileges of the entertainment industry? I could have just as easily lent the original CD and left it at that. But what if I fear that the original will be damaged if I lend it out and I make a copy merely as protection? Why should that involve any taint of "piracy"?

The issue, of course, goes well beyond merely lending copies of digital content to members of one's household. The real concern of the entertainment industry is that digital material is being distributed anonymously to millions of people over the Internet. Shouldn't something be done about this? Shouldn’t we be concerned that, if this is allowed to continue, the entertainment industry will no longer be able to afford to produce new material? For after all, if the entertainment needs of consumers can be satisfied free via the Internet, where are the dollars going to come from to pay for it all? Without a source of revenue, the entertainment industry will simply shrivel up and die.

Such reasoning fails to take into account all the relevant facts of the matter. It assumes that everyone who "pirates" digital content would have paid for it if they had not been able to acquire it for free. This is a palpably false assumption. It is far more likely that the vast majority of so-called digital pirates would never buy the songs or movies they pilfer off the Internet. Digital material distributed over the Internet usually must be compressed before it can be shared, because otherwise it would take far too long to download. A non-compressed DVD, for example, would take three or four days to download using a broadband connection. A full music CD would take six or seven hours. What's more, this uncompressed material would take up an enormous amount of hard-drive space, making it impractical to share more than a handful of files. Digital piracy is only practical if it involves compressed files. But compression involves a noticeable degradation of original material. Compressed DVDs are no better in quality than videos recorder by the consumer in his home. They lack the pristine imaging and sound qualities that make commercial DVDs compelling as a consumer product. The same goes for compressed sound files. The MP3 sound format is significantly inferior to the original digital source. MP3s lack the sharpness and bloom of the digital originals. They even distort frequencies, causing certain notes to sound as if they were played at the wrong speed. Digital pirates who really like a song or a movie will not settle for a degraded version: they will go out and buy the original.

The entertainment industry claims that it loses $3 billion a year to digital piracy. This, however, is clearly an unproven assertion. The fact is, no one really knows how much the entertainment industry loses (or gains) as a result of file sharing over the Internet. This leads to another consideration of critical importance - namely, the legal problem of determining the extent of the injury. Laws are made for protection against the infliction of harm. In the absence of a provable injury, there cannot be a crime. Now while it may be true that, in a general sense, digital piracy injures the entertainment industry to a certain (unspecified) extent, you could never prove beyond a reasonable doubt that digital piracy must always damage legitimate copyright holders. When a thief comes into your house and steals your CD collection, it is quite easy to prove that you have been harmed. But if he merely copies all your CDs and steals only the duplicated digital material, you are not harmed one infinitesimal bit. The entertainment industry is correct when it points out that computer technology makes copyright infringement so much easier. But they fail to mention the other important factor in the equation: the fact that piracy of digital material does not necessitate injury. If the person who "steals" the digital material would not have purchased the content even if the piracy option had not been available, there is no harm. How then can the entertainment industry justify punishing that person?

Senator Hollings' bill would make certain forms of digital piracy a felony offense. Civil penalties would range from $200 to $25,000 per infraction. How can penalties of this size possibly be justified when harm cannot be proven beyond a reasonable doubt? Sharing copyrighted material over the Internet should never carry more than a $200 fine; nor should it ever be a felony. These draconian strictures would only serve to turn the entertainment industry into a kind of authoritarian behemoth. It is political capitalism at its very worse: big business using government to take away the rights of consumers. If consumers must give up their right to use the digital material they have purchased in a manner they see fit, why shouldn't the entertainment industry also have to give up some of their rights? It is not as if the Hollywood moguls and the big record companies have never been guilty of abusing the privileges of copyright law for their own personal profit. How many stories have been told down through the years of musicians and screenwriters who have sold a song or a screenplay for peanuts only to find some movie studio or record company earn millions from it? The original intention of copyright law was to enable writers and composers to earn a living. It was not intended to make Hollywood moguls filthy rich.

Senator Hollings' bill would not only come down hard on digital pirates; it would penalize everyone who uses a computer, whether they used it to share copyright material or not. The bill would require anyone manufacturing or distributing "digital media devices" (i.e., any device that can be used to reproduce copyrighted material) to include government-approved copy protection markers. This would obviously impose a cost not merely on digital material itself, but on any hardware that can reproduce such material. That includes computers and networking hardware. It would even include, as absurd as it sounds, software. Websites that distribute, for example, the old Unix command "cp," could be sued for thousands of dollars!

For obvious reasons, the computer industry opposes the bill. Jim Raposa of eWeek even went so far to call it the "greatest threat that America's technology infrastructure has ever faced." It would likely have a devastating affect on new computer sales. A black market for foreign-made PCs unaffected by "protection markers" would immediately establish itself. Ordinary citizens would be treated like criminals simply because they wanted to use the products they bought with their own money as they see fit. "This legislation would be an unwarranted intrusion by the government into the commercial marketplace," declared Ken Kay, executive director of the Computer Systems Policy Project, a trade group that includes, among other luminaries of the computer industry, IBM, Intel, Dell Computer, and Motorola. "This would freeze technology...(and) force government to pick winners and losers."

The good news is that it looks like Hollings' bill will be held up in the judiciary committee. Nevertheless, the threat to consumers remains very real. Only last week Rep. Adam Schiff of Burbank, California introduced a version of Senator Hollings' bill in the House. The entertainment industry is not likely to give up on this one, and if they’re persistent, they might succeed in seriously compromising the freedom of all Americans, whether guilty of piracy or not. The Consumer Broadband and Digital Television Promotion Act, if passed, would probably have a greater impact on our lives than any other bill passed this year. If it should pass, even in an attenuated form, it would only go to prove once again that Hollywood really is opposed to American values.