Written Responses of Jonathan Taplin to the Senate Judiciary To Chairman Leahy 1. I assume that any solution to the "Analog Hole" problem that did not conform to current law on Fair Use would never be adopted or would face massive consumer resistance (like Copy proof CD's) 2. Investors would probably not put their money into any program service until these issues were settled. Since the current technology is working and is gaining more acceptance by copyright holders, and government intervention would bring the whole business to a halt. 3. We are currently deploying Intertainer in Hong Kong, Korea, Singapore and Beijing. Any attempt to mandate a new US DRM standard would be resisted by those countries. The notion that the whole world would go along with a US mandated standard seems naive, especially given the international roots (Bern, Switzerland) of Internet Protocol and HTML. 4. The attempt by the music industry to sneak a "Freedom to Virus" provision into the Patriot Act seems to foreshadow many of the complications that would result in terms of Privacy implications from the copyright holders desire to have access to individual's hard drive. This cannot have any good outcome on the question of privacy and liability for erasing users private data from a remote terminal. 5. I believe that the industry will reach consensus because cooler heads in the content community will prevail over those seeking to impose legislation from the FCC or Commerce Department. I'm sure the FCC has no interest in picking a DRM standard. 6. Consumer interest in Broadband is being slowed by lack of quality of service. Consumers are reluctant to pay twice as much for Broadband Internet service that quite often slows down to 56 KBPS because of over subscription by network operators. Until the FCC or Congress mandates a "Truth in Advertising" standard of 750 KBPS minimum speed for a service called "High Speed" or "Broadband", the consumer adoption will be slow. 7. I believe that the majority of pirated movies that are currently being served on Morpheus and Kazaa that are in the “Pre-DVD” release window are actually stolen from Studio or post-production house vaults. It would seem to me that those security standards should be tightened. The version of "Lord Of The Rings" that Mr. Parsons showed at the hearing clearly was not captured by a home video camera in a theater. I'm not sure there is anything the government can do about these perfect un-encrypted copies stolen from the studios. 8. I am not briefed enough on the issue to answer this question. 9. I believe the original copyright legislation was meant to protect "Authors Rights". I would suggest that these right are already being abused as the copyright law is being applied more to protect the right of corporations that are forcing artists into "work for hire" contracts. Any further erosion of the original intention of the copyright act, where Congress cedes it's power would be problematic for the artists whose blood, sweat and tears give birth to creative work. 10. I believe that if an individual purchases a legitimate license to watch a given piece of content for a given time period, then that individual should have the right to move that content to the device of his or her choice. 11. In general, we are supporters of open standards like Internet Protocol, HTML and XML. 12. I believe the marketplace is working in terms of providing DRM standards that work. I believe that these technologies are continually improving because of the marketplace factor of competition. To eliminate that factor would be to stall innovation. 13. Clearly major progress has been made on the DRM front in the last 9 months. Further innovations will be introduced to the market this summer. There is no reason for government intervention at this time. 14. It would be very problematic in the international arena as stated in response #3. 15. I am not involved in the discussion of the "Analog Hole" and other DTV standards so I can't opine on this. 16. I believe the FCC is not properly staffed to create such a standard. The history of government TV standards is fraught with mistakes. The Japanese governments attempts to set a Hi Def TV standard in the 80's turned out to cost private companies hundreds of millions in lost revenues as they chose the wrong standard. 17. I do not believe that that there are any elements of DRM that are unconquerable at this time by the private sector. Question of Senator Biden The reason that more content is not available on legitimate encrypted sites like Intertainer is rather complex. On the one hand, most major film studios plan to go into the business of on-line distribution themselves through two joint ventures: Movielink and Movies.com. Therefore we believe they may be interested in slowing down the lead we have in the space. On the other hand some of the majors believe that by bringing the "window" in which films are released to the Video On Demand distributors like Intertainer, closer to that of the DVD release might lessen the piracy problem, giving legitimate content providers an opportunity to sell before the wide scale propagation of "ripped DVD's". Questions of Senator Thurmond 1. I believe that once a consumer purchases any piece of digital media they should have the right to move it onto any of their own personal digital devices. 2. The market is currently developing many robust DRM technologies. The next step will be to have interoperability standards. It is my understanding that the MPEG group is working on those standards today. 3. I do not believe any Congressional intervention is needed at this time. 4. I believe that some of the more aggressive proposals for DRM standards would compromise the privacy rights of individuals. I would cite the music industry's "Freedom to Virus" amendment that was placed and then struck off the Patriot Act as an example of the more aggressive proposal. Many of us find these ideas to be disturbing. 5. Many companies can provide competing DRM technologies that could be interoperable. From the point of view of thwarting hackers, the more competing DRM's the better as a single standard would provide a single point of attack for every Hacker. Questions of Senator DeWine 1. We are exploring offering a download service. The only impediment would be studio permission. 2. As a small company we had to choose to develop for one browser at the beginning. Explorer had by far the most users so we developed for that. If Navigator gains market share, I am sure we will port it to that environment. Questions of Senator Hatch 1. We absolutely agree that there is considerable demand for media rich content. With little or no marketing we have signed up 75,000 registered users in 12 weeks. 2. I would refer you to the answer I gave to Senator Biden's question above. Some of the studios have multiple agendas. Lack of supply drives prices for limited supply higher. 6. I would suggest that quickly releasing video content on-line at the same time it goes on to DVD would help attract users to legitimate distributors like Intertainer. 7. I believe that Interoperability is key. A common standard like XrML would be very important in advancing this. STATEMENT OF SENATOR SAM BROWNBACK "COMPETITION, INNOVATION, AND PUBLIC POLICY IN March 14, 2002 Our society is transitioning from an analog to a digital world, characterized by bandwidth-intensive Internet applications and the broadband connections required to access them. This transition holds great promise for continued industry innovation and productiveness, as well as opening up a whole new world for consumer and community access to information, entertainment, education, and health care. The digital revolution and the emergence of broadband connectivity could be the single most important factor in the continued economic growth and development of our nation in the 21" century. Today, the Committee seeks to review the role of copyright protection in this new digital environment. I am fortunate to sit on two Committees - Judiciary and Commerce - that have equally important roles to play in this transition. The Judiciary Committee is charged with ensuring the rule of law - copyright law - is obeyed while the rights of consumers are protected. This will ensure digital content is widely available online, in turn helping to create demand for broadband connections needed to access such content. The Commerce Committee is charged with ensuring that consumers have access to a competitive choice in broadband supply – the infrastructure required to make broadband connections available to consumers. Just one year ago, I found myself in the Commerce Committee urging broadcasters and consumer electronics companies to work harder to resolve their concerns over digital piracy in order to move the transition to digital television forward. I explained at that time that if they failed Congress would do it for both of them, and likely to their mutual dissatisfaction. Today, I find myself in the Judiciary Committee making similar statements, but also making it clear to everyone that copy protection is not the panacea of broadband deployment and acceptance. In my view, broadband demand and supply are symbiotic in nature, not an either/or proposition. Content producers cannot be expected to make digital content widely available online if it will simply lead to a “perfect” form of piracy. At the same time, digital copy protection solutions must permit information technology and consumer electronics companies to innovate and create products consumers demand. In my view, federal regulation of these issues will simply ensure that technology is tied to those regulations. Innovation will be sapped. This does not benefit consumers, IT and consumer electronics companies, nor will it ultimately benefit content producers. Rhetorically at least, most industry partners seem to agree on the need for balance between copy protection and innovation. They seek an industry agreed-upon method for addressing copy protection. While it is dissappointing, given the rhetoric, that such an agreement has not been reached, I am willing to extend the benefit of the doubt a little longer. I encourage the witnesses here today to redouble their efforts to work on digital copy protection solutions - broadband demand -- to create a secure digital environment in which industry, consumers, and entire communities can benefit and thrive. Resolution of these issues can and should be a win-win scenario for all industries involved. The alternative is likely to be some form of legislation, and I seriously doubt any company involved in this process will be very satisfied with the result. The marketplace, not Congress, should find an answer. This is only part of the reason why the transition to digital seems to be stalling. At last count a mere 10% of the nation subscribes to broadband services. As we focus on broadband demand issues today, it is important that we recognize that digital content is available online. Through websites like Intertainer.com, consumers have access to bandwidth-intensive content online, yet they are not snapping up existing broadband connections in order to do so. This very clearly suggests that copy protection alone is hardly the panacea of broadband acceptance that some would like us to believe. Existing broadband connections still takes hours to download movies. Do any of us really believe that consumers will trade a trip to Blockbuster for the Internet when going to Blockbuster is quicker? Clearly broadband supply must evolve to fulfill its promise as an empowerment tool for industry, consumers and communities alike. This requires broadband connections that make telephone, multichannel video and video-on-demand, as well as data services possible simultaneously through one Internet connection. No consumer in the U.S. has access to such a broadband connection today. I will continue work to address the supply problem through broadband deregulation legislation that will spur competition, and create marketplace incentives not only for the deployment of broadband, but for the deployment of superior broadband connections compared to today's rudimentary services. I again urge you to resolve the content and demand side of this issue. |