CONTENTS Page Blanford, Lawrence J., CEO, Philips Consumer Electronics Chernin, Peter, President and Chief Operating Officer, News Corpora- Litai, Assaf, Founder and Acting CEO, Vidius Parsons, Richard D., Co-Chief Operating Officer, AOL Time Warner Inc (III) ENSURING CONTENT PROTECTION IN THE DIGITAL AGE THURSDAY, APRIL 25, 2002 HOUSE OF REPRESENTATIVES, AND THE INTERNET, The subcommittee met, pursuant to notice, at 12:30 p.m., in room 2123, Rayburn House Office Building, Hon. Fred Upton (chairman) presiding. Members present: Representatives Upton, Barton, Stearns, Gillmor, Deal, Shimkus, Fossella, Davis, Bass, Terry, Tauzin (ex officio), Markey, Eshoo, Engel, Green, McCarthy, Luther, Harman, Boucher, and Sawyer. Also present: Representative Walden. Staff present: Jessica Wallace, majority counsel; Linda BlossBaum, majority counsel; Will Nordwind, majority counsel; Hollyn Kidd, legislative clerk; Andy Levin, minority counsel; and Brendan Kelsay, minority professional staff. Mr. UPTON. Today's hearing is on ensuring content protection in the digital age, and while our inquiry starts with the important question of how this impacts the transition to digital television, our subcommittee's interest is, of course, much broader. The DTV transition deadline of 2006 is fast approaching. So time is of the essence. This hearing follows on the heels of several lengthy DTV roundtables which Chairman Tauzin held with myself, Mr. Dingell, and Mr. Markey, at which representatives of the major, relevant industries discussed, sometimes fiercely debated, the obstacles which stand in the way of a successful and timely transition to digital television and how we can overcome those obstacles. Many issues, such as cable compatibility and must carry, have been touched upon in our roundtables, but perhaps the one issue that has dominated the agenda has been content protection. Clearly, this issue needs to be addressed if we are to succeed with the transition. I truly believe that the best solution is a private sector solution. Yet inter-industry agreements have been elusive to date. I know, through over 8 hours of roundtables, that these issues are complex both legally and technologically. But if we can put a man on the moon, then I am optimistic that, with the right amount of pressure from Congress, the industries, and consumers, which have the best (1) engineers and minds in the world, we can do anything that we set our minds to. So the questions I have are these. How long can, or should, we wait for those deals to be struck in light of the impending deadlines on the transition to digital? Do the industries have the right processes in place to come up with a fair plan to all, including consumers, and one that will not stifle technological innovation in the future? And what, if any, is the proper role of government? We have heard that three content protection issues have been identified in apparent order of degree of technical difficulty. From easiest to hardest, they are: (1) the broadcast flag; (2) the analog hole; and (3) peer-to-peer. Earlier I mentioned putting a man on the moon, and I am reminded of how our Nation achieved that objective. President Kennedy laid out the first challenge. Then the engineers came about solving the problem. First, we put chimps into orbit and, once that was done, we put men into orbit, and after that we finally put a man on the moon. The point is that it was not all done in one step. It was done step by step. In today's context, the question becomes: If we can get the broadcast flag done and maybe the analog hole, will that be enough, for the sake of the DTV transition, to unleash the content as we continue moving forward on the other content protection issues? And will, or should, Congress or the FCC be needed to ratify any such deals to ensure consistent compliance amongst all manufacturers? In all of this, we cannot lose sight of the fact that this is about the consumer. The consumer wants to continue enjoying great American movies, whether it be "Saving Private Ryan," "Lion King," "Band of Brothers," but if that content is continuously ripped off and illegally transmitted with one click to the rest of the world on the Internet, then we will see a decline in the studios' ability to make them. Consumers also enjoy great home entertainment equipment and certain expectations regarding "fair use" rights, and we, as Members of Congress, must vigilantly guard those rights as we make our way through this important debate. It is a delicate balancing act, but one which is as old as Article I, Section 8 of the Constitution itself. I am confident that even Ben Franklin, as he was exploring science with his kite and his key in the thunderstorm, never could have dreamed of the digital technology, let alone motion pictures, DVDs, the Internet, Morpheus, and the like. Hence, fast forwarding to today, it is this Congress' burden to help sort out how to rationally protect content in the digital age, and that is what I hope can be accomplished someday, if not today. I look forward to hearing from today's panel of witnesses to help us through these issues, and I am excited that our subcommittee will be the first to use our committee's latest technology to hear from one such witness remotely, Mr. Chernin of News Corp all the way from Los Angeles. I tip my hat to Chairman Tauzin and Ranking Member Dingell for their foresight in bringing our committee room into the 21st century. |