Intellectual Property Protections and Technological Innovation in the Broadband Economy
By Eric Green A forum on "Intellectual Property Protections and Technological Innovation in the Broadband Economy" was held June 27, 2002 in the Hart Senate Office Building. Hosted by the Tech Forum, a bipartisan Senate caucus lead by Sens. Jay Rockefeller and Bill Frist, the background for the meeting was: Broadband (high-speed) Internet services represent one of the key enablers for future business productivity. However, the technologies that produce an increasingly bigger "pipe" to allow the transfer of more data at higher rates of speed, also create additional delivery and use issues for data producers, internet service providers, business leaders and policy makers. This briefing will address how the technological advancements may be merged with business models to stimulate this segment of the marketplace for providers and users while protecting the intellectual property rights and privacy of all. This forum featured presentations by:
Each participant was given ten minutes to speak on the topic, and then the forum was opened to discussion between the participants as well as questions from the audience.
First to speak was Jack Valenti. He said that the focus of the motion picture industry is on the consumer. But, to best serve the consumer, Valenti feels copyright owners must be able to protect their work. He said that the members of the MPAA "hospitably" welcome the net as a new delivery system for watching movies at home. He believes that the internet could be a "sanctuary" for digital media content, not a haven for illegal activity. To do this, Valenti proposes we set up a system where consumers can see movies sold at fair and reasonable prices determined by the market. Valenti mentioned the infamous "Hollings Bill" as one route toward a potential solution, but he never specifically endorsed a solution to the problem between IP rights and technological progress. Rather, he thinks meetings between all the major players involved would be the most beneficial way of resolving copyright issues.
Lawrence Lessig followed. He began by praising Valenti as someone who has brought the needed attention to issues of IP rights in the digital world. But, then Lessig changes his focus and says Valenti's argument, however, is skewed. Lessig says that Valenti's view of affording intellectual property the same rights as physical property is not a practical means of looking at the world. Rather, Lessig says the real argument is for a balance between technology and copyright rights. He says that in old rulings (like the Betamax case) the Supreme Court ruled that a device is permissible provided it has a "significant legal" use. He feels that the court's rulings imply that its job is not to regulate the balance between tech and IP, rather the task belongs to Congress. However, he cites recent changes in this prevailing attitude – he feels that lately, rulings force new technology to adhere to the rules of last decade. Simply put, Lessig believes that the copyright rules must develop with technology and that it is the job of congress to ensure this balance.
Margaret Greene represented a change in the focus of the discussion. She described the forum as "Goldilocks and the Three Bears," with herself as Goldilocks, meaning that her views were broader. Rather than pick a side of the IP issue, Greene says that the argument is irrelevant because the current state of broadband networks cannot support the extensive use (legal or otherwise) necessary to get us to the "Digital Promised Land." With only 12% of US households using broadband, Greene cites availability of broadband, not lack of content, as the problem needing to be addressed. She said that with deregulation, telecom companies lost too much money to be able to facilitate broadband access across the nation. She compared deregulation of service lines to a Napster free-for-all in the telecom industry. Greene stressed that "we're at the beginning of an evolutionary process," and the government must trust the market to regulate itself. She also stated that the parties involved in the IP/tech debate must grow up and find a practical solution, on their own.
Last to speak was Ken Potashner. Mr. Potashner gave some background on his company, stating that they have 45% of the market share on MP3 players and 55% on portable CD players that read MP3 data disks. He also discussed a product that his company, SONICblue, sells – a wireless music server for the whole house. This server would contain all the audio data from the CD's loaded into it, and then send sixteen data streams simultaneously to digital media devices around the house. He used the talk of his products that rely on data sharing as a segue into the legal issues his company has faced. With products that record and playback TV and audio data, SONICblue has faced numerous Napster-like lawsuits on the grounds that the company's products facilitate copyright violation. Mr. Potashner said that his company is doing nothing illegal, and the courts have confirmed that. Despite its financial and legal success, SONICblue has reached out to the content industry numerous times attempting to resolve the copyright debate, but has never received a response. Mr. Potashner said that his company did over $300 million in sales last year with a $0 advertising budget. Why has SONICblue enjoyed such success? Mr. Potashner joked that it is due to the attention his company receives as a result of the suits brought against it.
Of the questions asked, the most relevant related to compulsory licenses for file sharing services. Many view this as a good solution to the rampant file sharing the internet sees today. Mr. Lessig looks favorably on these licenses. He believes that they, rather than a technology mandate, are the only true way to protect the illegal content already on the internet. As for new content, he believes that the implementation of DRM is not a bad solution. However, Mr. Valenti disagrees. He feels that any compulsory fees, mandated by the government, would be unfair. He cites the regulation of the cable companies where adherence to compulsory fees almost destroyed the industry. Mr. Lessig countered by pointing out that the cable industry today is a multi-billion dollar industry. The two men went back and forth on the issue, but ultimately came to no resolution.
As a whole the forum was very entertaining and informational. The back and forth debate of Lessig and Valenti was amusing at times, yet full of valid points that add clarity and insight into the complex issues of technology and IP rights.
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02 May 2005
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