Electronics and public interest groups oppose bill

WASHINGTON — Jack Valenti’s parting gift from Capitol Hill is hardly wrapped and ready for delivery.

Last month, the movie and music industries hailed sweeping antipiracy legislation introduced by Sen. Orrin Hatch (R-Utah), chairman of the Senate Judiciary Committee, and the panel’s ranking Democrat, Patrick Leahy of Vermont, two longtime showbiz allies.

The Inducing Infringement of Copyrights Act of 2004 would effectively ban peer-to-peer networks, where most online piracy takes place. It would also usher in dramatic changes to copyright law by imposing the same legal burden on “whoever intentionally induces a violation (of copyright law)” as is faced by individual infringers.

The legislation was music to the ears of the movie and recording industries, as were plans to put the measure on a fast track so it would sail to the Senate floor in a matter of weeks.

Yet in recent days, consumer electronics and public interest groups have vigorously opposed the measure, arguing it would catch a whole host of unwitting parties in its legal dragnet. The groups have called for a series of hearings to express their concerns publicly, and the Senate Judiciary panel is now considering holding one as early as next week, industry sources said.

With so much opposition, it’s clear that swift passage of the legislation won’t come without a fight; both sides are already lobbing grenades.

Last week, Public Knowledge, a consumer electronics advocacy group, sent a letter to Senate Judiciary Committee members charging that the bill could stifle technology innovation by “opening the floodgates to massive copyright infringement litigation” by lowering the standards for bringing such a lawsuit.

This week the Recording Industry Assn. of America fired back with a five-page missive to every senator, laying out all the reasons why the music biz desperately needs the measure to stanch piracy’s powerful drain on the industry.

Even though Valenti and the Motion Picture Assn. of America wholeheartedly embrace the bill, the RIAA has done most of the heavy-lifting lobbying efforts behind the scenes and does not want to cede any ground.

As a former GOP political operative, RIAA topper Mitch Bainwol was barred from lobbying certain members of the Senate directly for more than one year. That ban expired a few months ago, and Bainwol has since sharpened his powers of persuasion. In the RIAA’s letter to senators, Bainwol described piracy’s impact on the music industry in dire terms, claiming the nation’s intellectual property assets are “under assault as never before.”

In direct response to consumer industry concerns that the bill is overly broad, Bainwol stressed the legislation targets only “bad actors — those who have built business models to get away with stealing the creative work of predominantly American artists.”

The strain illegal file-swapping has placed on the music biz is unbearable without congressional help, Bainwol argued. In 2000, the top 10 hits sold 60 million units in the U.S., but those figures were cut nearly in half last year when the top 10 hits sold 33 million units.

“Some have suggested P2P drives sales — or has little impact on sales,” Bainwol wrote. “And pigs fly. The absurdity of that notion is made plain by the sales pattern of hits.”

Bainwol readily acknowledged critics’ complaints about the bill and agreed to support any changes to it as long as the measure targets P2P companies.

He also dismissed arguments that the measure would stifle innovation, arguing that it would do just the opposite by encouraging investors to pursue legitimate P2P networks that make only authorized copies of music, movies and software available.

“So please look carefully at this legislation,” Bainwol implored. “And please do not let perfection be the enemy of the good or tangential excuses be the enemy of common sense defense of property rights. Too much is at stake.”

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