The Politics of Entertainment - Industry Trend or Event

Industry Standard, The, August 14, 2000 by Elizabeth Wasserman

The record and movie industries had Congress' ear when it rewrote the copyright laws. So why are they stilt unhappy?

FOR MANY, THE MAN TO MEET AT the Republican National Convention last week wasn't George W. Bush. It was Rep. Mark Foley of Florida who heads a congressional task force on the entertainment industry. At a trendy Philadelphia nightclub, the red carpet rolled out for Foley, with a crowd of middle-age lawmakers and young Republican staffers serenaded by Latin crooner Jon Secada.

The $400,000 bar tab was picked up by some of the biggest entertainment companies on the planet -- Viacom, Walt Disney and Time Warner -- and trade groups like the Motion Picture Association of America and the Recording Industry Association of America.

The timing was fortuitous. This same crew has been prodding Congress to crack down on copyright infringement on the Internet. Only weeks earlier, Disney's Michael Eisner told a meeting of more than 100 lawmakers that Internet piracy is "the most devastating thing that's happened to the entertainment industry in 75 years."

Eisner and others are putting their money where their mouths are. So far this election cycle, the entertainment industry has contributed more than $15.5 million to federal parties and candidates.

"[Piracy is] a subject that the entertainment industry is really pressing Congress to solve," says Holly Bailey, a researcher at the Center for Responsive Politics. "A lot of people who have a lot of money are buying access to the lawmakers who write these rules."

The copyright war is being waged in court as well as in Congress. In federal court in San Francisco, the RIAA is trying to shut down Napster, while in New York eight film studios and the MPAA are suing hackers who cracked the DVD encryption. Both cases involve a law that the industry had a heavy hand in drafting, the Digital Millennium Copyright Act of 1998.

The entertainment companies weren't the only ones weighing in on the DMCA -- the computer industry, Internet service providers, libraries and universities also influenced the law, which took nearly four years to craft. But it was the copyright holders who prevailed. Hollywood successfully fought to get the DMCA to forbid the circumvention of copyright protection technologies. That's the crux of the movie studios' case against Eric Corley, who published a DVD decryption program, DeCSS, on his Web site.

The Motion Picture Association of America's Jack Valenti maintains that he's satisfied with the copyright law outlined in the DMCA. But his group adamantly reserves the right to ask Congress for more legislation if the MPAA doesn't prevail in the courts. It's still possible they will seek a law that requires computer and electronics manufacturers to include antipiracy technology in their products.

The manufacturers have been reluctant to do that, asserting that it would rope them into solving Hollywood's problem. And they've been generous with Congress, too -- contributing $13.5 million to members and parties this year, three times what they contributed at this point in 1996. Everyone, it seems, wants to be Congress' darling.

For its part, Congress seems to be holding off on any more legislation. In the past few weeks, two key players in the copyright drama, Sen. Orrin Hatch (R-Utah), chairman of the Judiciary Committee, which handles intellectual property issues, and Vermont's Sen. Patrick Leahy, the ranking Democrat on the committee, have been inundated with more than 70,000 e-mail messages from users of Napster and MP3.com urging hands off. At a Senate Judiciary Committee hearing last month, the threat from Hatch and Leahy was explicit: If the industry doesn't respond to consumers' demands for reasonably priced downloadable digital music, Congress would step in and impose "a single fee for the writers, performers and record companies."

But Napster may have more foes than friends in Washington. With so called peer-to-peer firms like Napster all the rage on Sand Hill Road, the money that counts may not be directed at Congress but at companies. "VC-fueled piracy is something the DMCA did not contemplate," says Peter Harter, a consultant to E-Music.com, one of a host of companies arguing for a middle ground in Washington through the Digital Media Association, a trade group. "They're like the Exxon Valdez," Harter says of Napster. "They're going to screw up the delicate balance the DMCA created."

But depending on legislation to stop technology's progress is a fool's game. Many hope that technology itself will solve the standoff. Jonathan Zittrain at Harvard's Berkman Center for Internet and Society argues that technology can usher in a new era of trusted privacation" - a cross between private and publication - through which information owners can distribute products but retain controls on large-scale copyright infringement, a la Stephen King's latest honor-system serialization.

Asking music listeners to mail in a dollar bill for every download, as King is asking of his readers, isn't exactly a foolproof business plan. And you'd be hard pressed to find record companies agreeing to the honor system. But considering the alternative - putting 20 million Napster users in jail - it's not a bad start.