Gary Shapiro: P2P File Sharing is Legal and Moral

[Seth Johnson]

(This essay hits many very effective points.  One of the key
things that needs to be borne in mind, however, is the fact
that technological proposals currently on the table are
implementations of the notion, foreign to American society
and jurisprudence, of creators' "moral rights" -- a term
basically saying that creators dictate how information may
be used.  This essay nevertheless clearly represents a very
significant step forward in the discourse.  Forwarded from
POLITECH.  -- Seth)


-------- Original Message --------
Date: Wed, 18 Sep 2002 22:35:19 -0700
From: Declan McCullagh <declan at well.com>
To: politech at politechbot.com

Some background:
http://www.ce.org/press_room/press_release_detail.asp?id=10027
http://www.ce.org/press_room/speech.doc
http://news.com.com/2100-1023-958324.html?tag=cd_mh

File photo:
http://www.mccullagh.org/image/d30-25/gary-shapiro.html

-Declan

---

Speech by Gary Shapiro, President and CEO of the Consumer
Electronics Association.

The Campaign to Have Copyright Interests Trump Technology
and Consumer Rights

We are at a critical juncture in history when the inevitable
growth of technology is conflicting with the rising power
and strength of copyright  owners.  How we resolve this
tension between copyright and technology will  define our
future ability to communicate, create and share
information,  education and entertainment.

Today I would like to share with you my views on this
situation and the  questions we must confront as we wind
through this confusing, but historic  maze.

There is no doubt that this era’s rapid shift to digital and
other  technology is changing the rules of the game.
Reproduction, transmission  and storage technology all are
progressing exponentially, resulting in an  unprecedented
power to copy, send and save all forms of media.
Reproduction  technology has become incredibly cheap and
reliable. Transmission  technology, including satellite,
cable, broadcast, wired or wireless, and  often connecting
through the Internet, has linked everyone at ever 
increasing speeds and competitive pricing. Storage
technologies also  quickly have expanded in capacity as
total storage media costs have plummeted.

With each new technology, the fears of the music and motion
picture  industries have grown. With television and the VCR,
it was going to be the  end of movies. With CDs and
cassettes, it was the supposed harm from  real-time
transfers and one-at-a-time copies. Today’s technologies
make  these perceived threats seem naïve and harmless. With
high-speed  connectivity and the Internet, it’s not buying a
CD and making a copy for a  friend; it’s downloading from a
stranger or making available thousands of  copies with the
touch of a keystroke.

The growth of reproduction, storage and transmission
technology has  terrified copyright owners. The RIAA claims
that 3.6 billion songs are  downloaded each month. The RIAA
also estimates that $4.5 billion has been  lost by the music
industry due to pirating. And the motion picture industry 
also sees the writing on the wall. Fox Group CEO and News
Corp. President  Peter Chernin in an August 21 keynote
speech at an Aspen conference claimed  that Spiderman and
the latest Star Wars movie were downloaded four million 
times following the weekend after their release.

Based on these and similar threats the content community has
gone on a  scorched earth campaign ­ attacking and burning
several new recording and  peer-to-peer technologies. They
have used the Congress, media and courts to  challenge the
legality of technology and morality and legality of 
recording. In the same Aspen speech, Chernin attacked
computers as  untrustworthy and the Internet as primarily
used for pornography and  downloading.

I believe that hardware and software companies have a mutual
interest in  working together, so that they can sell more
products. For years, consumer  electronics companies have
been working with both the recording and motion  picture
industries on developing technological measures that meet
the needs  of both industries. For instance, the DVD
standard includes anti-copying  protection. It also includes
an anti-fast forward technology designed to  ensure
copyright warnings are shown, but instead is being used to
require  consumers to sit through movie previews. CE
companies also have provided  digital interfaces that allow
consumers to share content among their own  devices while
restricting unauthorized redistribution to the Internet. By 
protecting content at the source, content providers can be
assured their  intellectual property rights are respected,
while consumers can enjoy  unimpeded personal use. However,
source protection should not be used to  mislead consumers
to purchase CDs that can only be played on certain CD 
players.

Indeed, despite the cooperative efforts, the copyright
community has  declared war on technology and is using
lawsuits, legislatures and clever  public relations to
restrict the ability to sell and use new technologies. 
Lawsuits have shut down file-sharing services like Napster
and Aimster, and  threaten peer-to-peer networks like KaZaa
and Morpheus. They unsuccessfully  challenged the legality
of MPs recorders in the Diamond Multimedia case.  They have
challenged as illegal ReplayTV, a TIVO-like device, which
allows  television programming to be sorted and stored on a
hard disc and which  allows a consumer to skip commercials.
In fact, one TV executive equated  the skipping of
commercials as “stealing” free broadcast television. The 
RIAA has announced that it will start suing individuals who
engage in file  sharing and has subpoenaed Internet access
provider Verizon to identify a  downloading subscriber.

At the urging of the content community, Congress has stepped
into the act.  Legislation has been introduced which
requires all technologies to be  shaped by a
government-mandated copy protection system. Other
legislation  allows any copyright owner to seek and destroy
the posting of copyrighted  products on P2P networks via
personal computers connected to the Internet.  Still other
legislation would allow a content owner to insert an
embedded  watermark into the work to determine if there was
infringement and, at the  content owner’s discretion,
disable the device, even if, upon subsequent  determination,
the use was lawful.

The most recent and scary development is that the United
States Department  of Justice is threatening to jail
millions of Americans who use file-  sharing services. In a
presentation at the Progress and Freedom  Foundation’s Aspen
Summit on August 21, Deputy Assistant Attorney General  John
Malcolm said that peer-to-peer sharing is piracy and a
criminal offense.

With this pronouncement, along with similar euphemisms by
the media, it is  clear that the copyright community has
reshaped the debate. All of a  sudden, the downloading of a
song to sample an artist’s wares, behavior  most Americans
between 13 and 25 engage in regularly, has been likened to
a  criminal act.

Consider the clever public relations campaign of the content
community.  They’ve changed the simple language that
describes the acts at issue. It  used to be called “taping”,
“reproducing” or “downloading”, and advocates  on both sides
would call it “unauthorized reproduction” or “unauthorized 
taping”. Then somehow this use of technology shifted to the
more pejorative  and sinister “copying”. The word “copying”
sounds bad. It got you in big  trouble in high school on a
test. “Copying” is a sister to “plagiarism”  which is
especially bad.

But in the past few months, Hollywood and the music industry
have shifted  to different words. They now only talk about
downloading as “piracy”. They  call it “stealing” and always
use analogies to shoplifting products out of  a store. The
Justice Department has adopted this approach. “Stealing is 
stealing is stealing,” said Malcolm in Aspen.

At the same conference, Chernin echoed these themes and used
the words  “piracy”, “shoplifting” and “stealing” repeatedly
to describe downloading.  He even declared that those who
disagree with his views on copyright are  either “amoral or
self-interested”.

Another way copyright owners have distorted the debate is to
tie in  downloading with our national goal of broadband
deployment. They argue that  broadband demand will not grow
until this issue is resolved. Indeed,  Senators Holling’s
legislation is called “The Consumer Broadband and  Digital
Television and Promotion Act”. Yet broadband deployment has
little  to do with songs and movies, and more to do with
fast Internet speed,  always- on convenience, exchanging
home videos, interactivity on the web  and a range of
potential uses for education, medicine, business, shopping 
and gaming. Yet, some legislators have become confused and
convinced by  Hollywood that there is a connection between
broadband and copyright.

A third way that the copyright community has reshaped and
redefined the  debate is almost biblical in its reach. The
entire theme of the copyright  community is that downloading
off the Web is both illegal and immoral.

But is it either? I submit it is neither.

Despite the assertions of the Justice Department,
downloading is not illegal.

First, fair use rights are guaranteed to consumers by
statute, and applied  judicially on a case-by-case basis.
This means that, while some consumer  practices ultimately
could be adjudicated as either fair use or  infringement,
there is scant basis for challenging them as criminal.

The music and film industries claim that there is no such
thing as fair use  "rights" in an attempt to disparage the
term. They say that fair use is  only an affirmative defense
to copyright infringement and therefore not a  right. But
various recognized "rights" only may be asserted as
affirmative  defenses in a lawsuit. For example, in a
slander suit, one may assert the  First Amendment right but
only as an affirmative defense; this does not  diminish the
fact that the right exists.

Second, time after time, practices of individuals that were
initially  equated with "piracy" or "theft" have been shown
to be neutral or  beneficial to copyright owners, and have
either been tolerated or accepted  as fair use. Think of the
VCR and the Supreme Court decision holding that  its use to
tape full movies is fully legal.

Third, the 1997 NET Act's requirement of a total retail
value of $1,000 per  infringement should be taken seriously
as a barrier to bringing cases  against ordinary consumers.
This law should not be re-interpreted, after  the fact, as a
criminal enforcement vehicle against consumer-to-consumer 
recording and "swapping" practices.

Downloading is not immoral either. To make downloading
immoral, you have to  accept that copyrighted products are
governed by the same moral and legal  principles as real
property, thus the recent and continuous reference by  the
copyright community to label downloading as stealing. But
the fact is  that real and intellectual property are
different and are governed by  different principles.
Downloading a copyrighted product does not diminish  the
product, as would be the case of taking and using tangible
property  such as a dress. At worst, it is depriving the
copyright owner of a  potential sale. Indeed, it may be
causing a sale (through familiarity) or  even more likely,
have no impact on the sale. My son often will become 
familiar with artists through downloading their music on the
Internet and  then go out and buy the CD.

The comparison to real property fails for several other
reasons. Real  property is subject to ownership taxes. Real
property lasts forever and can  be owned forever. A
copyright can be owned only for a limited period of  time.
Indeed, the United States Constitution declares this. More,
copyright  law must bow to the First Amendment that
expressly allows people to use a  copyrighted product
without the permission of the copyright owner. This  concern
contributes to the statutory and judicial concept of “fair
use”.  The First Amendment includes, not only the right to
send, but also the  right to receive. Indeed, in 1984, the
U.S. Supreme Court in declaring the  VCR a legal product,
said that it could be okay to copy an entire  copyrighted
product. So if the Supreme Court expressly held that VCR 
copying in the home for non-commercial purposes is a legal
activity, how is  it suddenly labeled as “piracy” because
the device is a computer?

The major record labels concede that they totally have
failed to transform  their business models in response to
the Internet. But then they whine that  they “cannot compete
with free”, referring to the free downloading the  Internet
allows. While I am sympathetic to the radical shift of
selling a  CD with a one good song for $20 to a marketplace
where consumers pick and  choose which songs they want, I am
not sure this is the correct approach.  For one thing, you
can compete with free. Purveyors of bottled water do it. 
America Online does it. Book retailers do it with libraries.
Independent  online music services say they can do it, if
they can clear the rights.

The Beatles 1 album, which contained 30-year-old songs that
could have been  downloaded for free from Napster-like
services from day one, but  nevertheless sold some 26
million copies. Why? Because people were willing  to pay for
the quality of a CD over the often barely acceptable sound 
quality of a download using P2P services.

Of course, recording artists must make a living and should
be paid. Most  consumers likely would pay a reasonable
amount for quality downloads,  access to full catalogs and
maybe some promotional items such as concert  tickets or
hidden tracks on a CD. Artists even can get new revenue from
the  Internet by identifying their fans and promoting their
concerts, new  releases and other products. But the music
industry has made little effort  to look at new business
models or provide a viable and attractive  alternative to
the downloading services.

The recording industry and motion picture industry should
stop complaining  so much and look for technological
solutions to its own problems.  Doesn’t  it make more sense
to protect content at the source, using technologies  that
maintain consumer expectations for personal use? Content
providers  would be served better by working with technology
companies to deploy these  solutions rather than suing
everyone and lobbying Congress to legislate  unreasonable
and consumer-unfriendly mandates.

Despite a lack of hits and a recession, music and movie
sales are holding  their own. Compare this to real downfalls
in other sectors from  telecommunications to IT to
broadcasting, and you must ask yourself if the  Internet is
actually a good thing for the copyright community.

So where does this lead us? I submit that policymakers
should follow some  basic principles:

First, do no harm. If we had previously heeded the concerns
of the creative  community, we would have no radio, no TV,
no VCR, no computer, no e-mail  and no Internet. Yet each of
these technologies has enhanced the revenue  stream for
copyright owners.

Second, advances in technology should not be restricted. We
cannot even  imagine today what future advances we will
choke off if we artificially  restrict technology. If we can
envision technology connecting the poorest  in the world to
medical information, to education and to a better quality 
of life, we should be careful about stifling its growth.
Advances in  technology also can supply tools to content
providers to help them manage  digital rights in a manner
that takes into account consumers’ expectations.

Third, claims of harm should be greeted with great
skepticism. Not every  recording is a lost sale. It actually
may represent a stream of future  sales. Artists from Chuck
D to Janis Ian to Courtney Love support home  recording
rights for practical business reasons.

Fourth, copyright owners have a high burden of proof before
any technology  should be restricted. Broadcasters and the
motion picture industry have  come close to making the case
that redistribution of free, over-the-air  broadcast
television over the Internet is harmful to the concept of
free  over- the-air broadcasting. This is an area where
careful legislation or  regular legal review, respectful of
consumer rights and expectations, may  be appropriate.

Fifth, copyright owners should continue developing ways to
protect their  content at the source, rather than insisting
that the burden should be on  the device that plays it.
Perhaps they should consider a more flexible  business model
that focuses on keeping honest people honest. But, the 
corollary here is don’t sell CDs that don’t work on many CD
players.

Finally, any restrictions on technology should be narrowly
crafted, define  limitations on abuse by copyright owners
and define legitimate consumer  recording rights and
expectations. For example, CEA supports the distance 
education bill presented by Congressman Darrell Issa of
California and Rick  Boucher of Virginia that addresses a
specific IP concern rather than  attempting to legislate
through a one-size-fits-all approach. The Boucher-  Issa
bill reaffirms fair use rights and would amend the Copyright
Act to  ensure educators can use PCs and new technology to
foster distance learning.

The collision course between copyright owners’ desire to
preserve existing  business models and the inevitable
development of newer, better, faster and  cheaper
technologies need not be fatal. Our future is bright if we
resist  the temptation to restrict technology. Digital
technology will foster a  Renaissance of creativity. It will
connect our world and soon allow  everyone to have low-cost
access to information, entertainment and  education. If the
play button becomes the pay button, our very ability to 
raise the world’s standard of living and education will be
jeopardized.

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POLITECH -- Declan McCullagh's politics and technology
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