Mouse grouse: Dis
boss lays into computer biz
March 01,
2002
By
Brooks Boliek
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WASHINGTON -- Walt
Disney Co. president and CEO Michael Eisner accused some
computer manufacturers of profiting from copyright piracy
during a contentious hearing Thursday before the Senate
Commerce Committee.
"The killer
app for the computer industry is piracy," Eisner told the
committee during its hearing examining copyright problems in
the digital realm. "They think their short-term growth is
predicated on pirated content."
Eisner's words came during an extraordinary hearing
during which Eisner, News Corp. president and chief operating
officer Peter Chernin and Intel executive vp Leslie Vadasz
asked one another as many questions as the lawmakers asked
them.
Eisner told the panel that
he was convinced that some computer manufacturers had adopted
a unspoken sales-through-piracy doctrine after it was
mentioned last year during a conference on broadband in
Washington. He also cited advertising that computer makers
were using that encouraged people to buy their products to
burn CDs and DVDs.
While he said
some information technology companies believed in copyright
protection, he singled out Apple's "Rip. Mix. Burn." ad
campaign, saying the company was telling people "that they can
create a theft if they buy this computer."
Intel's Vadasz denied that his company, or the
information technology industry as a whole, was using a
business strategy built on an illegal activity.
"You can't build the kind of
industry the size we are, and want to be, by illegitimate
means," he told the committee.
Intel, and the makers of computers and other
consumer devices, want to protect copyrighted works, Vadasz
said. Not to do so would do more harm than good for the
industry, he said.
"This problem
needs to be solved," he told the panel. "The use of rich
content is beneficial to our industry, the network industry
and the media industry."
In a
letter to the committee sent after the hearing to clarify some
of his points, Vadasz wrote that "rip," "mix" and "burn"
referred to "features that consumers have come to expect. The
ability to rip, mix and burn in a protected manner is not
piracy, it is simply fair use of content as permitted by law."
That was disputed by
entertainment industry executives.
"That's like selling a crowbar and telling someone
to smash, bash and steal," one executive quipped.
Chernin told the committee that the
entertainment industry had no desire to stop people from what
they normally and legally do.
"Home copying is a legitimate use," he said. "We do
not believe in stopping home copying. We have no problem with
people using our products in multiple devices in the home;
it's the illegal (transportation) we oppose."
While Vadasz argued that the
information technology industry was prepared to deal, he
balked at the suggestion by Eisner and Chernin that computers
and other electronic devices include a microprocessor that
recognizes copyright-protection regimes.
He claimed that that would be an unnecessary
intrusion into the marketplace and accused the entertainment
industry of "technophobia."
"The
issue is abdicating the design discussions of the
microprocessor and creating a technological cul-de-sac for our
products," he said. "I do not want to see our industry
abdicate a key design issue to the entertainment industry."
While the executives of both
industries pledged cooperation, there was little in evidence
from the often-heated testimony. Both sides attempted to make
economic arguments that their industry was more deserving of
protection than the other.
Vadasz
also bristled at the suggestion by Eisner and Chernin that the
electronics industry install copyright-protection technology
that would, in effect, police the Internet by preventing
devices from displaying an illegally made product.
The entertainment industry wants to
prevent illegal copies -- such as movies camcorded in a
theater or otherwise illegally obtained -- from being
distributed on the Internet.
"There are not technical solutions to all the
problems of the world," Vadasz said. "You can cut bread with
your kitchen knife, or you can kill somebody with it."
In his letter mailed to the
committee after the hearing, Vadasz wrote that "content, once
captured in 'unprotected' form, can never be put back in the
'bottle' and protected against copying on the Internet."
While Vadasz said the technology was
unavailable, Eisner said it took a chip that cost only 80
cents.
"If it's a fact you cannot
protect intellectual property on the Internet, I do not accept
that," he said.
Disney and News
Corp. are pushing for legislation that would require digital
devices to recognize copyright-protection regimes even if the
material was obtained illegally.
Sen. Fritz Hollings, D-S.C., chairman of the
committee, has been circulating a proposal called the Security
Systems Standards Act that would give the industries 18 months
to develop an "open and common" standard for the technological
protection of content.
If the
private sector agrees on a standard, the Secretary of Commerce
is directed to write regulations for its adoption by the
industries. If the private sector cannot agree on a standard,
then the commerce secretary is directed to promulgate federal
rules adopting standards based on a public rulemaking.
Electronics makers would be given
one year to incorporate the new standards into their machines,
and the U.S. Commerce Department would conduct a periodic
review of the standard.
Following
the hearing, Hollings said he planned to introduce the bill
soon, but intends to shorten the timetable, giving the
industries 12 months to develop a plan rather than 18
months.
Hollings said he was
getting fed up with the pace of the negotiations and placed
most of the blame on the consumer electronics industry.
"Industry negotiations have been
going on for years with little to show for it," he said.
He agreed with Eisner that some tech
companies were profiting from the sale of products that
facilitate Internet piracy. It is a situation that the
information technology industry views, at best, with a blind
eye.
"When I listen to the
clarion call to the government, 'Please stay away from our
business,' I am reminded of the police chief in 'Casablanca,'
who feigned surprise and said, 'I'm shocked, shocked there is
gambling going on here,' " Hollings said.
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