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Follow UsAndy Sullivan
WASHINGTON: Media and technology companies told Congress on Thursday they had
not yet settled on a method to stop digital piracy, prompting a key senator to
say he would go ahead with plans to impose a government solution.
Sen. Ernest Hollings, chair of the Senate Commerce Committee, said he would
prefer that media companies like Walt Disney Co. and high-tech firms like Intel
Corp. figure out a technological fix on their own to stop unauthorized digital
copying of movies, music and other media.
But after a bumpy three-hour hearing in which executives of Disney and Intel
clashed, Hollings said he would introduce a bill to push the two sides toward a
compromise. The South Carolina Democrat's long-discussed bill is championed by
Disney and other media companies but opposed by tech firms who fear it would
impede innovation.
The bill would require makers of personal computers, digital televisions,
VCRs and other consumer electronic devices to include copy-protection technology
preventing the devices from playing pirated movies, TV shows, or other
broadcasts.
Federal agencies would set the standard if the two sides could not come to an
agreement after 18 months, a period Hollings said he might shorten to 12 months
because the technology has already been developed. "They can easily do it,
we all saw that," he said.
At the hearing, Disney CEO Michael Eisner blasted the high-tech industry,
alleging Intel and other tech companies were basing their growth strategy on
enabling customers to download entertainment illegally. Intel vice president
Leslie Vadasz accused Disney and other media companies of trying to dictate
computer design.
Piracy fears slow digital TV, internet growth
Media companies have withheld content from new distribution channels like the
Internet and digital television because they fear their movies and TV shows
could be copied easily.
New consumer devices like CD recorders and portable MP3 players have only
compounded their concerns. This lack of content has slowed consumer adoption of
digital television and high-speed Internet connections, experts say.
Technology and media companies have worked together over the past seven years
to come up with digital watermarks and other technologies to prevent
unauthorized copying, but such efforts will be of little use if
copyright-protection controls are not also placed in computers and other devices
that play digital material, media companies say.
The technology industry has been unresponsive to these concerns, Eisner said,
because they design products to encourage unauthorized copying. "It's hard
to negotiate with an industry whose growth, they think, is based on pirated
content," he said.
Intel's Vadasz denied the charge, and countered that high-tech innovation
would suffer if Disney and other movie studios were able to dictate the design
of personal computers. "The media industry would try to make the personal
computer nothing more than an expensive DVD player," he said.
Technology groups say progress is being made. A standard to prevent
unauthorized copying of digital television broadcasts will be ready by the end
of March, Vadasz said. A group of high-tech CEOs sent a letter to media
executives Wednesday pledging to cooperate on copyright-protection efforts.
Eisner said the tech companies have become more responsive to his industry's
concerns because they are afraid of government intervention. "Until Senator
Hollings said he was going to consider legislation, we couldn't have a
conversation," he said.
Vadasz said it was a coincidence that the CEOs' letter was sent a day before
the congressional hearing. His response drew snickers from the audience.
Hollings and other senators said they hoped industry could solve the problem on
its own, but they would continue to keep close tabs on the situation.
"Fear is a good motivating factor," said Virginia Republican Sen.
George Allen. "Whether that's fear of draconian government regulations or
fear of inept government regulations, that may get folks moving."