FC: Rep. Howard Berman declares war on P2P networks, plans new laws

[Declan McCullagh <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=2002

-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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