Copyright Fights Slowing Broadband Growth

WASHINGTON — Resolving the legal issues of digital content and rights management are integral to sparking broader consumer use of broadband, Bruce P. Mehlman, the U.S. Department of Commerce’s assistant secretary for technology policy and a key intellectual property advisor to the White House, told a packed conference room at a Capitol Hill think tank Wednesday.

The Bush Administration considers the “widespread deployment of broadband” as one the keys of its economic policy. According to Federal Communications Commission, the physical deployment has already happened, with more than 70 percent of Americans having access to broadband connections. However, less than 15 percent actually subscribe to the high speed services offered over telephone lines or though cable boxes.

Speaking on a panel discussion entitled “Pirates and Posses: The Battle Over Digital Copyright,” Mehlman said, “While users are adapting broadband very rapidly and in line with reasonable expectations for a new technology, the greater availability of movies, music and games from legitimate sources will be critical to more rapid and sustained consumer adoption.”

Also speaking at the Heritage Foundation event were Gary Shapiro, president and CEO of the Consumer Electronics Association; Alec French, minority counsel for the House Judiciary Committee’s Subcommittee on Courts, the Internet and Intellectual Property; and James Delong of the Competitive Enterprise Institute.

Downloadable movies and music and a host of other content-driven applications were supposed to the “killer apps” that would sway consumers to broadband, much like e-mail drove the phenomenal growth of dial-up Internet services in the 1990’s. Instead, the once promising venue has become entangled in bitter, complex multi-million dollar copyright battles between Hollywood studios, music publishers and file swapping services such as Napster.

“The fight over digital content and rights management has it all — critical industries battling over billions, lobbyists and lawyers maneuvering for position, disruptive technologies in a dynamic market, and self-possessed consumer advocates gearing up for a great crusade,” Mehlman said to begin the discussion. “Moral absolutism abounds — you are either on the side of ‘freedom and innovation’ or the ‘Eighth Commandment and the rule of law.'”

On of those worried about consumer rights is Shapiro, whose organization on Monday filed a friend of the court brief in the MGM Studios v. Grokster case currently before the U.S. District Court for the Central District of California. In the brief, the CEA argued that the balance between consumer rights and copyright holders established in the 1984 “Betamax” case, i.e., the right of consumers to make copies for personal use of works they purchase, should be preserved and protected as new technologies emerge.

Shapiro told Wednesday’s panel that copyright holders had fought every technological innovation over the last 20 years, including cassette tapes, VCR’s and DVD’s. In each case, he said, the copyright holders ultimately profited from the introduction of the technologies.

Shapiro’s statements drew Mehlman’s agreement: “Disruptive technologies and the content community have collided before — we’ve read this book. For over one hundred years, every new technology has boosted the revenues of the creative copyright industries over the long run. There’s no reason to think the Internet technologies will be any different. But getting there is not easy and will take great cooperation.”

In outlining the administration’s plans for bridging the yawning legal divide between the warring parties, Mehlman called for information technology developers to work with the content community to develop technological solutions that protect digital content.

“Companies clamoring every day for government help to accelerate broadband adoption can make significant strides on their own and without government mandates by working with the content community to satisfy their concerns,” he said.

Mehlman urged content providers to “out-compete free,” adding, “It is also critical for content creators to accept the reality that we will never be able to entirely eliminate online piracy, just as we have never been able to eliminate offline piracy. The Internet was built to connect, not to contain, and the battle against piracy will be won or lost based upon the quality of legitimate online consumer offerings. Paid services can beat elusive and illegal peer-to-peer networks by offering greater features and selection at reasonable prices and in the formats consumers want (e.g., usable throughout a home network). They lose when they refuse to compete.”

As a final note to those seeking government intervention in the digital content dispute, Mehlman warned, “While I believe government can help, I would caution interested parties to be careful what you ask for, since the only law that never changes in Washington is the law of unintended consequences.”

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