Nerds get the word

H'w'd makes Internet piracy case in D.C.

WASHINGTON — Delivering Hollywood majors a boffo victory, an influential Senate panel on Thursday blasted the tech industry for refusing to play ball and figure out a way to stop pirated pics from being zipped around the Internet.

No one on the Senate Commerce Committee even bothered to step in when Walt Disney Co. topper Michael Eisner began to exchange heated words with Intel exec veep Leslie Vadasz. By the end, both were scoffing, unable to conceal their disdain.

Eisner, wowing solons with his feistiness, said no Internet protection, no more Hollywood.

“There are people in the tech industry who believe that piracy is the killer app for their business. Their quarter-to-quarter growth is pushed forward by people getting things for free,” Eisner said.

“I really take exception to that,” Vadasz said. “Contrary to what Mr. Eisner says, we as an industry have not been built up around thievery.”

But Vadasz seemed to have no friends up on the dais, thanks to an intensive, months-long lobbying campaign by Motion Picture Assn. of America prexy Jack Valenti and the majors. Testifying with Eisner were Valenti and News Corp. topper Peter Chernin.

It was clear that the political powers-that-be had sided with the MPAA forces, threatening legislation if the tech sector didn’t return to the bargaining table and solve three key copy-protection issues.

“If you cannot protect what you own, you don’t own anything,” Valenti said.

Committee chair Sen. Ernest Hollings (D-S.C.) and other pols have begun to cite the lack of copy protection as one of the key culprits holding up the digital TV transition: No Hollywood content, no transition.

Solons did exact one promise from Vadasz: By the end of March, the country’s top computer makers will present technology that prevents the transfer of content from digital TV sets to the Internet.

Two other problems

But two other key issues remain unresolved.

Studios also want technology that would stop traditional TV sets receiving a digital signal from being hooked up to cyberspace.

And, perhaps more critically, the Hollywood majors are seeking technology that will stop computer users from file-swapping pirated movies on the Internet.

Vadasz said government intervention in these areas would do “irreparable damage” to the computer biz, and that Hollywood wants to overburden computers and other devices with too many restrictions.

Hollings dismissed the characterization as “nonsense,” saying, in essence, that Congress doesn’t want to neuter the computer biz but, rather, to neuter piracy.

“This is an example of the rhetoric we’ve been hearing for years,” Eisner told Hollings. “If you don’t protect content on the Internet, that’s the end of the entertainment business.”

Eisner said it was no coincidence that toppers of the country’s leading computer companies sent a letter Wednesday to studio chiefs expressing a continued willingness to negotiate a resolution. He felt the letter was prompted by the hearing and Hollings’ threat to file legislation if the tech sector and consumer electronics don’t figure out how to protect content.

The room filled with laughter when Vadasz countered that the timing of the letter had nothing to do with the Senate hearing.

The letter, sent from toppers at Dell, Microsoft, Intel and other computer makers, said a private solution was still possible and that the tech biz is committed to sitting down with Hollywood.

Calmer Chernin

Taking a more low-key approach than Eisner, Chernin said the studios don’t want to deprive consumers of their right to record movies for personal viewing at home. At the same time, he said, studios need to know their content will be reasonably secure.

“Thus, the single most important issue for all entertainment companies, and certainly for every content producer, is that of copyright protection, a constitutional right that has increasingly come under attack in this digital age,” Chernin said.

Vadasz took a dig at Valenti, recalling how the MPAA topper once referred to the VCR as the “Boston Strangler” of the film industry. As it turned out, of course, the video biz created a new revenue stream for Hollywood.

When it came his turn to testify, Valenti laughed off the barb. “By the way, I did say that and I would use it again. It’s a picturesque phrase.”

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