RIAA SUBPOENAS ARE DEBATED AT SENATE HEARING

Among the topics debated were not only RIAA’s subpoenas, but also the role of govt. in encouraging digital rights management solutions (DRMs) such as the FCC action on a broadcast flag. Brownback made it clear that the subpoenas RIAA had issued since its initial court victory over Verizon had created a vulnerability. “The real harm here is that nothing in this quasi-subpoena process prevents someone other than a digital media owner -- say a stalker, a pedophile, a telemarketer or even a spammer from using this quasi-subpoena process to gain the identity of Internet subscribers, including our children,” he said. Brownback was echoed by SBC Gen. Counsel James Ellis. SBC has declined to respond to any subpoenas from copyright holders, despite the RIAA v. Verizon decision, rejecting 60 requests from pornography producer Titan Media.

Under the court’s interpretation of DMCA, Ellis said, any copyright owner can “make a filing with a court clerk and pay $25, and the right of privacy [of a peer-to-peer user] goes out the window.” SBC supports Brownback’s bill, he said, because anyone can use the subpoena process: “It will be inevitable that an Internet stalker, child molester, abusive spouse or some other wacko who uses the Internet will use that approach to find their victims.”

But Sen. Boxer (D-Cal.) accused SBC and Verizon of “a little bit of hypocrisy” for protecting their own intellectual property but not permitting the music industry to do the same thing. She said those companies shared information frequently in other contexts, but when RIAA needed merely a name, phone number and address, they urged RIAA to file a John Doe case in a court. Boxer said intellectual property was “critical to my state” so Brownback permitted her a 2nd round of questions during the first panel. She took that opportunity to lecture ISPs that they “were involved in a compromise” when the DMCA was crafted that they would be exempt from liability if they cooperated with copyright holders. “You didn’t want to be liable, you wanted to wash your hands of it. You got your wish, and now you're not cooperating,” she said: “I'm rather sad that we have come to this circumstance.”

Boxer also cited the protection of children in taking a different approach to the topic than that of Brownback. Echoing testimony last week before the Senate Judiciary Committee, Boxer noted that P2P networks carried pornography, sometimes targeted at children. She showed a poster illustrating a search result on Kazaa for Britney Spears, and one of the results actually was a file called “Drunk Teen Sex 2.” “Your child can think she’s downloading music and instead download pornography,” Boxer said.

Another senator citing the importance of the entertainment industry in his state was Sen. Nelson (D-Fla.). He said “it’s unfortunate the [music] industry has had to resort to individual lawsuits, but it’s facing a serious threat.” “I believe the burden is on ISPs” to demonstrate that privacy concerns of customers trump the need for content owners to protect their intellectual property: “If they can demonstrate that, I'm all for changing the law. If not, then let’s move forward with all available speed.” Sen. Sununu (R-N.H.) called balancing intellectual property rights and privacy “a very difficult issue.. We're going to be dealing with this 2 years from now, 4 years from now, 10 years from now.” That said, he did say he had “concerns” about govt.-mandated technology standards.

“Congress may indeed have to step in to take a more active role” if industry doesn’t reach some solutions, said Senate Communications Subcommittee Chmn. Burns (R-Mont.), “a prospect that I don’t look forward to but may be necessary.” He said he saw the govt. role “as one that encourages the principal stakeholders to arrive at an agreement expeditiously.” He said last week’s FCC decision on cable and consumer electronics “plug- and-play” was a good example of private-sector cooperation resulting from govt. prodding, and hoped for the same on copyright protection issues.

Brownback also praised the plug-and-play agreement, adding that the FCC broadcast flag approach was too much like a govt. mandate. He spoke in greater detail on the subject in a Tues. night floor statement, saying that the result might not be technology-neutral: “The importance of technological neutrality in the plug-and-play agreement vs. the tech mandate in the broadcast flag becomes very clear when you review the particular provisions of each agreement.”

Larry Blanford, Philips Consumer Electronics N. America CEO, called the broadcast flag flawed and said it wouldn’t protect content but would interfere with fair use. MPAA Chmn. Jack Valenti countered that the flag merely prevented redistribution of content across the Internet, and “consumers will never know there’s a broadcast flag.” Princeton U. Prof. Edward Felton said Congress should ask if whether it made sense to apply copyright protection to content that always had been free “in the clear.”

Senate Governmental Affairs Investigations Subcommittee Chmn. Coleman (R-Minn.) has begun an investigation of RIAA’s subpoenas and has scheduled a hearing on the subject. He was permitted to speak before the witnesses at the Wed. Commerce hearing, and outlined his plans. He said RIAA had been given “broad powers” under DMCA, and “it is possible for innocent people to get caught up in a legal web.” “Many are teenagers or younger” who are being subpoenaed, he said: “They need to be told they are performing illegal acts, they don’t need to be sued.” He said his subcommittee would look at how technology was “being used to steal works of artists but also to prove someone stole it,” as well as “why peer-to-peer networks don’t proactively prevent illegal downloading.” Coleman said: “I believe the very future of the music and motion picture industry is at stake” in this battle, and subpoenas merely “alienate current potential customers.”

RIAA Pres. Cary Sherman and EMI Group Exec. Vp John Rose defended the subpoenas. Sherman called the music piracy rate “astronomical,” adding “no one has a privacy or First Amendment right to participate in copyright infringement.” Rose said his company recently posted a 33% increase in profits, but Wall St. cut EMI’s market cap 76% out of fear of damage from file sharing. The result has been reducing EMI’s roster of musicians 25%, he said. Sen. Wyden (D-Ore.) suggested RIAA had a “litigation forever strategy,” and asked Sherman “how long is this going to go on? Five thousand suits? Ten thousand suits?” Sherman said “I really can’t answer the question” because it depended on how many suits were needed to change the mindset of music downloaders. He said the suits were having an effect: “College orientations have changed. Parents are discussing it with their kids.” Wyden has a bill that would require music companies to label copyright-protected CDs, and Rose said “I certainly agree with the objective” of that legislation. He said the bill helped spur industry talks toward better labeling of DRM-protected content.

New legal music download services are “fantastic” and “can compete with free,” Center for Democracy & Technology Assoc. Dir. Alan Davidson said. He said such services needed to continue to evolve, “otherwise you just have Prohibition, just suing people and not giving them an alternative.” He said his group and many others supported Verizon and SBC in their resistance to the DMCA interpretation because “there is a real privacy concern here.”