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Protecting digital content

Protection of digital content is one of the biggest policy issues that Congress will face during its next session, Washington lobbyists agree, but no one knows exactly how and when the issue will come up.

"I think it's more of a defensive year than an offensive year for the copyright industries with respect to Congress," says one lobbyist. "But we fully expect that people are going to try to make changes [in existing law]."

In 1998, Congress passed the Digital Millennium Copyright Act, a law that took steps toward protecting all sorts of copyrighted digital content, such as movies, songs and books. The copyright industries, which include record companies and movie studios, say they want to wait and let the law work. But they fear that advocates who think consumers should have liberal copying rights will push Congress to open up the law sooner rather than later.

Still, says one lobbyist, Congress isn't likely to jump into the fray until enough streamed media exists that it threatens traditional business. For example, Congress did not write legislation that granted satellite-TV companies a blanket license to air local TV signals in local markets until broadcasters and satellite TV providers were at war with each other. Finally, the conflict came to a point where the problems could not be solved without new legislation.

A similar situation will have to erupt in the brand-new world of streaming media before Congress will see a clear need to change the law, observers say, and companies have only begun to realize what they can do with Internet streaming.

So far, streaming is predominantly used by broadcasters to put their radio signals on the Internet. Last November, in a big win for the music industry, the U.S. Copyright Office ruled that broadcasters would have to pay additional royalties to record companies if they wanted to stream their radio signals over the Internet. Right now, broadcasters pay copyright fees only to the composers and music publishers to get the rights to play music on the radio.

The Copyright Office also ruled that Webcasters that provide what is known as "consumer-influenced" radio-allowing consumers to input their preferences in music-will be classified the same as broadcasters and need only one blanket copyright license. Webcasters were happy with that decision because the Copyright Office could have ruled that they were "interactive" services, which would have required them to negotiate royalties for each piece of music they played.

The Copyright Office plans to start a proceeding in May to determine what the fees are, how they are paid and who qualifies for the blanket license.

Although there has been a lot of talk about copyright policy with regard to the Internet, deciding how Webcasters should be treated under copyright law is the first real policy step the federal government has taken. Two years ago, two copyright issues emerged at the end of the Congressional session.

First, a provision slipped into a bill could have granted Internet service providers a blanket license to stream all TV stations. Entertainment lobbyists went into a frenzy, and that provision was quickly stripped before the bill was finally passed into law.

Second, a Canadian company called began streaming over the Internet TV signals from the Toronto market area, something broadcasters considered a clear violation of copyright. A federal court in Pennsylvania soon forced iCraveTV to stop.

The matter of streaming TV signals over the Internet has yet to find its way to Washington. The Pennsylvania court's decision put a stop to would-be Internet television broadcasters, and no company since then has wanted to try that again.

The music industry is waging heated battles with such companies as Napster and over how digital music should be treated on the Internet, but so far those battles have stayed mostly in court.

Last year, Rep. Rick Boucher (D-Va.) sponsored legislation that would have made it clearly legal for consumers to copy their music collections on to the Internet and access their music from anywhere they could get an Internet connection. That bill died when Congress left in December, but Boucher could reintroduce it in 2001.

For the most part, however, members of Congress are biding their time.

"Content companies that own valuable business models are changing," says Rep. Bob Goodlatte (R-Va.), co-chair of the Congressional Internet Caucus and a member of the House Judiciary Committee. "Once that change starts taking place, it might become clearer whether there are some legislative fixes that need to be done or whether there is any kind of change needed in the comprehensive legislation that we did two years ago."

Things are expected to get even more complicated once broadband networks are more widely deployed. Because the Internet is a distributed network, with no one central server, it can hold an infinite amount of data. That makes it easy to store large files, such as movies.

According to a Sony spokesman, the movie studios are developing a standard that would allow movies to be streamed over the Internet to home computers.

So far, the studios have been hesitant to release their digital content without adequate protection because they fear that consumers will be able to make perfect copies of movies and other specialty programming and then distribute the copies for free around the globe. They have been negotiating with the television and consumer electronics industries for years over how their copyrights will be protected. All sides say they are getting closer to an agreement that would essentially retain existing policy.

"We don't want to see these rights consumers have had for two decades eroded or cut back," says Michael Petricone, vice president of technology policy at the Consumer Electronics Association. "Just the mere fact that we're moving from an analog world into a digital one shouldn't mean that consumers should have to give up their non-commercial fair-use rights."