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"The CBDTPA and DMCA"

[written March 23, 2002]

Last week Senator Fritz Hollings finally got around to proposing what used to be the SSSCA, or what is now known as the CBDTPA. Combined with the already existing DMCA, what we're left with is a lot of stupid acronyms, little media coverage, some struggling anti-competitive and anti-innovation organizations, and a lot of alienated consumers.

Now I realize that every tech savvy person on the Internet is thinking the same things about all this legislation, but I still want to write about it, so I guess what I want to do is just bring up some points that I find interesting about the whole thing.

Language

CBDTPA stands for "Consumer Broadband and Digital Television Promotion Act" and SSSCA stands for "Security Systems Standards and Certification Act". DMCA stands for "Digital Millennium Copyright Act".

President and CEO of the MPAA, or Motion Picture Assocation of America, Jack Valenti, stated, "MPAA supports the Hollings bill - a measure that will serve the long-term interests of consumers by calling upon the Information Technology, Consumer Electronics and Copyright industries to negotiate in good faith to find solutions to digital piracy."

Just the language that the senators involved in the bill and the people they represent, such as the MPAA and the RIAA (Recording Industry Assocation of America), is insidious enough. Everpresent is an insistence that these laws are in the best interest of the CONSUMER and the ARTISTS. On CNBC last week, Jack Valenti told one of CNBC's bobbleheads that piracy of movies and music has exploded with the Internet, tech to decode and distribute it, and other factors related to technological progress. He then proceeded to claim that this hurt consumers.

Hollings: "Every week a major magazine or newspaper reports on the thousands of illegal pirated works that are available for copying and redistribution online. Academy award winning motion pictures, platinum records, and Emmy award winning television shows – all for free, all illegal. Piracy is growing exponentially on college campuses and among tech savvy consumers. Such lawlessness contributes to the studios and record labels' reluctance to place their digital content on the Internet or over the airwaves."

Specious arguments about long-term inflation due to piracy aside, how is more and more people seeing and listening to more and more different movies and albums BAD for the consumer? If anything, it seems like things are better than ever for consumers. Instead of waiting for a year or so so the MPAA can squeeze all profits out of movies before releasing VHS/DVD, people can download the movie for free, even if the quality is bad. If they really love the movie, they'll go see it in the theater. (and, given the figures, it seems as though people still love to go to the movies because the quality and hugeass movie screen and sound system can't be beat, even though US movie tickets and food are FAR more expensive than other countries!) AND, when the DVD finally comes out, they can buy it for a decent price, or wait for the used copies to show up, which are much cheaper. As for music, people love to download advance copies of albums, and the whole albums, which they can pretty much get at flawless quality now. BUT, what they WILL pay for is to see the artists perform these albums live, or go to clubs and hear the music being mixed. Consumers will still pay for live performance that can't be duplicated from home.

I have read the proposal by Senator Hollings, and while it seems far better written and informed than I first suspected, I think he and his supporters fail to place the blame on the RIAA and MPAA themselves. He is too quick to support them and blame the consumer for its inscrupulousness. He obviously does not trust the consumer at all. "This is for your own good," he seems to say, a statement that rings hollow for anyone who has listened to pirated MP3s or divx's.

In a market which is reasonably free, if consumers are not given enough satisfactory options to get that which they desire, then they will create their own options by either skirting the law or becoming producers themselves. Black markets spring up in this way. In this case, consumers were given albums with a few hits on them, tagged with $15-20 price tags, distributed a month or more after they went gold. Or they were forced to pay $7-9 to go see a movie at the theater and then wait a year or so for the VHS/DVD to come out, and then even longer for it to show on TV for free.

The music labels and movie distributors meanwhile carefully controlled the release of various phases of "art" that they didn't even create, in order to squeeze out the most profit. Show a movie in the theaters worldwide just so long until the grosses wind down, then blitz consumers with a marketing campaign for the VHS/DVD. They want control every step of the way.

So then things like the Internet, CD burning, faster CPUs, and so on gave consumers a new option to get the products they wanted. So they get albums months before they're released in stores, at flawless digital quality, for free! Or they get high quality versions of movies that they can copy as much as they want as soon as that movie gets into the theaters, again for free! They don't have to waste their money to see a shitty movie in the theater, or they can if they think it's worth it. They don't have to wait a year or longer to get a version they can watch at home. Senator Hollings and his ilk, for this, yell, "CRIMINALS! CRIMINALS!" And consumers yawn.

Illegal, illegal, illegal. Lawlessness! Such contempt for what Hollings admits is a cultural phenomenon that the media is picking up on because SO MANY PEOPLE ARE DOING IT. The constituents of these so-called representatives are at odds with the senators introducing legislation which labels them as illegal, lawless pirates. College campuses, the main fonts of innovation, creativity, and demand that the movie and music industries crave, not to mention the main entertainment demographics, are festering with "pirates". Tech savvy people are also to blame apparently because they exploit improperly secured devices to break the law.

Like most people, I am clueless as to how to deal with the issue of giving due credit and money to the artists who contribute their work to the world. But it seems unavoidable to conclude that expecting a world to exist that securely and under complete control delivers a product to people so that they can only experience it under the author's (or more accurately, the author's distributor's) terms is unrealistic. Copyright laws as we know them are outdated and impossible to maintain. The worst is that Hollings says that "it is technologically feasible to provide ... a protected environment", blaming the private sector for not coming up with solutions fast enough. This in turn makes the entertainment industry wary of putting their content online because they know it's not safe enough yet. He calls upon the hardware makers to help protect the existing business model of the entertainment industry and incorrectly assumes that it IS "technologically feasible" to make transmission of digital media secure, when obviously the hardware industry DOESN'T think it's feasible!

And how does putting government-mandated protections in all hardware and software going to affect products from international countries? Will the government regulate what comes into the US? How hard exactly is it for a cracking group to obtain foreign hardware to rip a movie or album, encode it into another format, and upload it for the world to have? How hard is it for people in other countries to do it for the US groups? All that legislation has been circumvented unless the government decides to harshly pursue and prosecute people who have pirated material.

"America’s creative artists deserve our protection."

I have a huge problem with organizations like the MPAA and RIAA expecting people to perceive them as acting in the best interest of their artists and the consumers. Everyone sees through this. They are middlemen who inflate the price and take most of the profits of art that they didn't even create. I'm not saying there's no need for promotion, distribution, and so on, but the mere existence of these middlemen causes inflation, alienation between artist and experiencer, and, as history has always shown, a large organization's power and will to subjugate both the two in order to ensure its own necessity to both parties. These entertainment organizations don't talk about their role in the whole process because it's weak ground for them. They realize they're interloping on the feedback process between creator and his audience.

Innovation

In that same above interview on CNBC with Jack Valenti, he lamented that movies in the US require an AVERAGE of $80 million to make. On another occasion, he said something like 2 out of every 10 movies ever make their money back through sales. $80 million to make! And not even a 50% chance of making your money back?! What kind of business is this?

The music industry is the same. The top artists at each label provide the venture capital and perks cash for the rest of the artists that music labels try to squeeze talent out of. Very high risk for a slim chance of reward.

And yet this is good business? It's so good that the government must step in and protect it?

Okay, how is this? The MPAA and RIAA can look at their businesses and labels, note the massive budgets appropriated to projects that should be recognized as utter garbage, and reform their practices completely. Trim the fat, refuse to pay people exhorbitant salaries, seek better scripts, and all in all not expect a government to bail them out if they can't make ends meet.

I do not honestly believe that record labels and movie producers are doing a good enough job running their businesses efficiently. George Lucas may be a crackpot, but the resistance he found towards universal adoption of digital filming technology is just ridiculous. Why would you not use digital cameras instead of the extremely expensive, cumbersome, and sensitive celluloid? Why would you pay someone $30 mil to act in a movie? Why would you let Snoop Dogg and Dr. Dre do a movie about working at a car wash? Why would you then blame it all on the consumer, who is your life blood?

Why are some notable cheap projects doing so wildly successful? Blair Witch Project, Oh Brother Where Art Thou, and Stolen Summer (the movie directed by the rookie guy who won the HBO contest to have the production filmed for a miniseries, the cost supposedly being a bit over only $1 mil) being such examples.

The RIAA and MPAA are crying foul, unable to adapt with one of the biggest issues to affect mankind, the issue of copyright, and are looking towards government for assistance.

Free Markets

In preliminary hearings for the bill, there was a big row between the supporters of the act and with companies in Silicon Valley. The reason for this is because companies like Intel would be expected to implement technology on all their hardware and software to control the distribution and viewing capability of entertainment products. Meanwhile, Silicon Valley has no incentive to side with the RIAA or MPAA to hurt the consumer! Why would hardware makers actively seek to make their products less useful to the consumer? (that is, if they don't get anything out of it, I should add =P)

Andy Grove, former CEO of Intel, said, "Is it the responsibility of the world at large to protect an industry whose business model is facing a strategic challenge?"

An insightful commentary. But in light of 9/11 and what some saw as a US economic recession, we just had the pleasure of seeing Dubya place steel tariffs to stimulate US steel demand. In other words, he thinks interfering in a free market and tampering with conservative laissez-faire policy is worth it if it means protecting US jobs. So the same protectionism should extend the MPAA and RIAA, they must be thinking, and senators have been trampling over each other to support the entertainment industry! Peter Chernin of News Corp. responded to Grove, "Let's say I decide to broadcast on my network the code for how to make Intel chips or Microsoft software. I think they'd find a way to stop it."

Hey, that isn't such a bad idea! =P But he actually hurt himself more than helped. The software industry has had to deal with piracy for far longer than the RIAA and MPAA have. It's done everything it can to stop piracy and has for the most part been unsuccessful. If anything, pirating now is even nicer and easier than it used to be. It's getting to be a bit more of a hassle now that games are getting big enough to fit DVDs, but this happened before when CD games were pirated while modems still existed. Once broadband became pervasive, that was no longer a problem. So it will be with DVDs. And Microsoft has had to contend with people pirating its OS for ages. WindowsXP was available weeks before it was officially released. Yet somehow Microsoft is one of the wealthiest companies in the world. They figured out how to make themselves relevant in an industry where piracy, freebies, and price deflation are the norm.

Government's Role

Hollings: "But given the pace of private talks so far, the private sector needs a nudge, and in doing so, continue the government's longstanding role in promoting (and sometimes requiring) the implementation of technological standards in electronics equipment to benefit consumers."

Excuse me, "nudge"? Whoever wrote this proposal (and I wouldn't be surprised if it wasn't Hollings) thought to word it politely. But it's still government interference in the free marketplace. It's still the government imposing its will on not only producers but also the consumers it so gallantly protects.

Exactly which technological standards has the government helped implement to benefit consumers? You mean the V-chip? FCC standards regarding radio and television moral standards for profanity, sex, violence, and so on? Video game violence? Oh yeah, THANKS.

HDTV

Hollings brings up HDTV. He correctly (and amazingly intelligently) points out that people won't pay $2k for an HDTV yet. Damn fucking straight! He goes on to say, "As for broadband, rural and underserved areas aside, there is no availability problem. There is a demand problem. Roughly 85% of Americans are offered broadband in the marketplace but only 10-12% have signed up." And, "By unleashing an avalanche of digital content on broadband Internet connections as well as over the digital broadcast airwaves, we can change this dynamic and give consumers a reason to buy new consumer electronics and information technology products."

Okay, let's get this straight. Movie downloading via piracy is rampant over the Internet. But people won't buy HDTVs or use broadband because there isn't enough demand for products over the Internet. Does this make sense to you?

The First Invocations: Criminal Prosecution

I didn't talk much about the DMCA above but it's still relevant. The main thing about it is the part that allows criminal prosecution of offenders of copyright infringement. This gives the act some real teeth.

The first notable summoning of the DMCA occurred when the software company Adobe had a Russian programmer, Dmitri Skylarov, arrested when he came to the US to attend a convention of some sort. More details on the case are available at the EFF's site.

Just recently, the Church of Scientology threatened google.com, the most popular search engine right now, of copyright infringement for merely listing sites that criticized the Church by putting up what they considered copyrighted material. This was done under the umbrage of the DMCA, the Church claimed. You can see how such wide-sweeping legislation can be abused by those who seek to control access to information.

These incidents are the beginning. The unfortunate reality is that the bills are being proposed by politicians who do not truly understand the issue, being fed by the hand by companies whose futures are in question because they refuse to remain competitive, fighting against who are in reality people who ARE breaking current law, people who don't really understand the issue themselves and attack it as rabidly as the politicans they hate. Defending against the MPAA and RIAA are what amount to a bunch of zealous lunix/slashdot/copyright geeks whose underlying philosophies are that every institution is corrupt and should be avoided, a way of thinking that justifies their solitary and meaningless lives. It really is a horrible situation on both sides.

Nevertheless, I personally have full confidence that time will temper everyone involved. The way we view copyright will destroy itself and be reborn in a more relevant way for the digital age. Such mindless acts of legislation will surely be found unconstitutional, even if it has to go up to the Supreme Court. These are the opening shots off the bow in a war in which everyone is unsure, unprepared, and ill-informed. I expect it to be messy.

But still I hope. And seek the answer. =)



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