TCS Daily

Hollywood vs. Silicon Valley

By Sonia Arrison - April 11, 2002 12:00 AM

Hollywood and Silicon Valley are at war over how to stop illegal copying of digital property such as music and movies. Recently, a California senator and congressman supported plans to intervene in favor of the movie moguls. While the politics of these announcements might be entertaining, the results could be disastrous.

The popularity of digital file-sharing systems such as Napster, which allowed Internet users to illegally download songs, took Hollywood's fear of digital theft to an all-time high. Hollywood lobbyists have since pressured Congress to force technology firms to implement a scheme that Hollywood wants and the market resists: Total control for Hollywood over digital content.

The result is the Consumer Broadband and Digital Television Promotion Act (CBDTPA) introduced by Senator "Fritz" Hollings (D-SC), co-sponsored by Senator Dianne Feinstein (D-CA), with a promise from Representative Adam Schiff (D-CA) to introduce a companion bill in the House.

Sen. Hollings has always had a mixed record on technology, but the support of Californians Feinstein and Schiff, who should know better, is disappointing. The three of them together have received more than half a million dollars from the entertainment industry.

The CBDTPA would prohibit the sale of almost any technology unless it contains copy protection standards endorsed by the federal government. This threatens to make it impossible for consumers to copy CDs for their own use, making Silicon Valley insiders hopping mad.

Joe Kraus, co-founder of, started to fight initiatives like the Hollings/Feinstein bill which he describes as the "fishnet fantasy of Hollywood," designed to control consumers' computers.

Kraus is upset that Hollywood has managed to frame the debate so that legitimate file copying, such as back-up files, are seen as the same action as piracy. Instead, he says the solution is to punish pirates, not outlaw the technology that pirates happen to use. For example, "we make child pornography illegal, not the video cameras used to make it," Kraus said.

It's not that Silicon Valley companies don't value intellectual property. To the contrary, technology firms seek to protect intellectual property with the aggression of a rottweiler on steroids. And Silicon Valley knows the pain of piracy all too well: Tech firms lose $12 billion dollars annually to piracy in comparison to the content industry's $3 billion. The place where the two sides disagree is on how to stop it.

Hollywood wants to kill the proverbial fly with a sledgehammer and Silicon Valley wants to spend more time looking for an optimal fly swatter, but the task is not easy. For example, in 2000 the Recording Industry Association of America (RIAA) thought it had come up with a technical solution to prevent unauthorized sharing of music files through the use of digital watermarks, a form of encryption.

Full of confidence, the RIAA offered $10,000 to anyone who could defeat the protective technology. A team of researchers at Princeton University broke the system in three weeks, delivering a harsh blow to entertainment executives eager to use the Internet as a new delivery channel.

Instead of treating this failure as a lesson on how to create better digital rights management technology, the entertainment industry threatened the researchers and sought government intervention. But government-mandated technology standards are guaranteed to quash innovation.

If one method of copy protection is given a monopoly status by the federal government, there will be no incentive for technology companies to come up with new and improved ways to manage digital rights. In that scenario, everyone will lose because the technology will not move ahead.

Worse still, if the tech industry and tinsel town can't agree on a standard for digital rights management, Hollings and Feinstein want the government to choose one for them. If government management of electricity is any indication of how government-created copy protection standards would work, then everyone has reason to worry.

Bureaucrats are not better equipped than the tech industry to choose technology standards, unless, of course, Congress wants to cave in to Hollywood demands quickly, fully, and at no cost to the entertainment industry.

Digital rights management technologies are intellectual property themselves, requiring development time and money. The CBDTPA would make the tech industry provide that property for no charge, essentially nationalizing the copy protection costs that Hollywood should cover as a cost of business.

California's war has gone to Washington threatening technology firms and consumers with the pledge "I'm from the government and I'm here to help." But the backers of CBDTPA fail to understand that government control of engineering standards will be bad for technology and consumers.

Sonia Arrison is director of the Center for Technology Studies at the California-based Pacific Research Institute. She can be reached at

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