Written Testimony of Michael D. Eisner Chairman & CEO, The Walt Disney Company Submitted to the Committee on Commerce, Science & Transportation United States Senate

Business Wire, Feb 28, 2002

There are several key considerations that should be a part of the solution to this pressing problem. First, the interests of consumers, content owners and device manufacturers ALL require that there be common technological standards. Common standards will prevent consumers from confronting a bewildering array of confusing and incompatible standards. Common standards will help create a technologically predictable market to which content owners can bring their movies and other works. And common standards will make it reasonable to mandate that device manufacturers build the necessary hardware and/or software into their devices.

This does not mean that there will be a single "silver bullet" solution or that all content owners must use the same digital rights management system in the distribution of legitimate content. Rather, what the market needs is some means to ensure interoperability and a common set of "baseline" technologies to help digital media devices identify and reject the illegal, pirated copies.

Second, the technological standards should be open -- not limited to the proprietary developments of a single firm. Widely available open standards, licensed at reasonable costs, will prevent the emergence of new "gatekeepers" who could retard the development of new digital services and limit consumer choice in content. A top public policy goal for Broadband should be open standards so that consumers have convenient access to all content from all producers.

Third, the private sector should be given every reasonable opportunity to develop appropriate means of protection and to adopt common open standards for use in a wide variety of delivery devices. Only in the event of private sector failure should government set the standards. But, the pressure of a timeline for eventual government action is critical to yield the desired standards in a reasonable time frame.

Fourth, the standards that we seek must be renewable, upgradeable and extensible without the necessity of time consuming bureaucratic processes in either private sector, or government, standards setting organizations.

Fifth, once standards are set, they must be mandated for inclusion in all digital media devices that handle creative content. This is necessary to ensure a reasonably secure environment and to prevent unfair competition by non-compliant device manufacturers.

Finally, it is critical that the government act now to help achieve appropriate solutions. Disney is very grateful for the efforts of many in the Congress who have tried over the years to "jawbone" the affected industries to negotiate the required technological standards. For example, we thank Chairman Hollings and Ranking Member McCain for scheduling this hearing, which has acted as a healthy spur to discussions in the private sector. Other leading legislators have been helpful as well. Members of both the House and the Senate, Democrats and Republicans have written to the Motion Picture Association, to the Electronics Industries Association, to prominent high tech companies and to the FCC urging swift private sector agreement on technological standards to protect creative content in the digital world. And, we are grateful to Chairman Hollings and Senator Stevens for the Discussion Draft Legislation that they circulated last year. That Discussion Draft contained many innovative suggestions to break the Gordian knot that has frustrated all prior attempts to solve the digital piracy problem.