Verizon's copyright campaign
With lobbyists from telecommunications giants lining up to oppose Hollywood's demands for new copyright laws, Verizon lawyer Sarah Deutsch explains what's behind the budding confrontation.
Now consumers have a powerful new ally. Verizon and other telecommunications giants have ordered their phalanx of lobbyists to oppose the entertainment industry's demands for new copyright laws. The company is also fighting the Recording Industry Association of America's request for information about a subscriber.
So at the center of the copyright scrum, you'll find Sarah Deutsch. The 41-year-old Deutsch, a vice president and associate general counsel at Verizon, represented her employer during the negotiations over the World Intellectual Property Organization (WIPO) copyright treaties and the Digital Millennium Copyright Act (DMCA). These days, she is marshaling the opposition to proposals in Congress that would permit attacks on peer-to-peer networks, boost technology used for digital rights management, and grant more power to copyright holders.
CNET News.com sat down with Deutsch, who was recently in town for a Progress and Freedom Foundation conference, to talk about this looming confrontation over digital copyright law.
Q: The Recording Industry Association of America wants you to reveal the name of a subscriber who's an alleged peer-to-peer pirate, but you're saying they're not following the appropriate legal procedure. What's the dispute?
A: Verizon looked carefully at the subpoena. This is different from anything they had sent us in the past. (Those) always applied to material residing on our system or network (instead of a peer-to-peer node). It created a very difficult policy issue for us. We understand that RIAA has a problem and needs this information. At the same time, we have an equally legitimate concern that they comply with the proper legal process. We believe this is a very important case of first impression and should not be rushed.
Sen. Fritz Hollings, D-S.C., wants to implant copy-protection technology in software and hardware devices, and Rep. Howard Berman, D-Calif., hopes to let copyright holders hack into and disrupt peer-to-peer networks. Did you work with them in crafting their bills?
| In this new digital era, to reach a solution for many difficult problems, we have to create a win-win solution for all stakeholders. |
What is your position on Berman's anti-P2P bill?
We oppose the Berman bill. It's very troubling in that it essentially permits one particular segment of the U.S. industry to engage in vigilantism on the Internet. So, for example, the content community could engage in denial-of-service attacks, as long as they have a reasonable belief that they were defending their copyright.
Who are your allies in the industry?
The same companies that oppose us on many telecom issues are our strongest allies on intellectual property and liability issues. Companies like AT&T, WorldCom, together with U.S. Cable & Wireless, and the other Bell companies.
How about AOL Time Warner? They're both a content owner and a service provider.
They're straddling both sides. On pure liability issues, they're clearly with the service providers. On copyright, they're struggling with both sides.
What bills concern you the most?
We're concerned about the Hollings bill, even though it's not moving. We're concerned that the bill is being broken into pieces that will be reintroduced in new legislation.
Such as?
There's been some talk about finding legislation to codify a broadcast flag standard (that would prohibit selling TV receivers that did not follow a copy-protection standard). Verizon and other telecommunications companies have never been at the table to discuss a broadcast flag. We're concerned about the standard and our ability to offer innovative services in the future.
How would a broadcast flag law affect Verizon?
For example, even assuming that Verizon was able to provide digital television over the Internet, would we be allowed to do so without a technology that has been blessed by three (movie) studios? Or if we wanted to market a wireless home network, is that an approved technology that could ultimately pass the standard that has been created by this small group of companies that has discussed the broadcast flag to date?
What's your take on other copyright bills? How about the plan by Sen. Joseph Biden, D-Del., to prevent forging digital rights management (DRM) marks or watermarks?
We oppose the Hollings bill. On the Biden bill, we have a concern when the word "physical" was dropped and it became a DRM bill. The bill criminalizes and creates civil penalties for knowingly transporting an illegal authentication feature.
How could Verizon run afoul of that?
We could easily obtain knowledge through a notice from a copyright owner, alerting us that a certain watermark, for example, was being sent over our network. There is an implication in the bill that if we do not do something to stop that illegal watermark from crossing our network, that we could face both criminal and civil liability under the bill.
So you tried to fix Biden's bill?
We sat down with the content community, with (Capitol) Hill staffers, and offered up several different alternatives to get the service provider out of the bill. We proposed, for instance, that it apply only to the party initiating the transmission. That was rejected. We tried definitional approaches that made it clear the bill did not apply to an intermediary. That was rejected.
Did you try to work with the bill's sponsors directly? How about with Sen. Biden?
We've had a difficult time obtaining a carve-out. We think it's a very simple issue. The bill is intended to target the bad guys. There shouldn't be a controversy over exempting an intermediary.
When you lobby people on Capitol Hill, what do you tell politicians?
On the Hollings bill, we've discussed our concerns and talked about how the bill undermines our longstanding compromise (in the DMCA).
Could you explain the DMCA compromise?
It started in, I believe, 1994 when the U.S. Patent and Trademark Office came up with their "green paper" (policy document) on the National Information Infrastructure (NII). It talked about this horrible new device called the Internet that was a giant copying machine. One of the conclusions of the green paper was that the best policy was to hold the service provider liable. That phrase awakened a sleeping giant. The telecom industry never paid attention to the topic before. At the same time, the copyright community introduced a bill called the NII Protection Act that made all temporary copies illegal.
You're talking about buffered and cached copies?
Yes. Then they went to Geneva (for the WIPO negotiations) and tried to make temporary copies illegal as an infringement. All the telecommunications companies banded together and went to Geneva and essentially removed that language from the WIPO treaty.
Could you explain why caching is important for Internet providers?
Caching was hugely important, and it still is. If everyone had to send all the traffic immediately over the network, it would clog up the network.
| We have a 300-pound gorilla on one side of the scale. Many of us are joining together on the other, to reach that necessary balance. |
They were forced to come to the table to negotiate a liability limitation for service providers. We came up with a system called "notice and takedown." If there was an infringement residing on our network, we would take it down after receiving a valid notice from the copyright owner. And the user also has the opportunity to protest.
Now what's happening in Congress, and what's your take?
The content community would like to expand the scope of the DMCA to have the service provider block infringing sites that are not located on our network and to use digital rights management tools to stop peer-to-peer transmissions. But these infringements occur on the users' hard drives, not (on) our networks. We're just a conduit. Their strategy right now is to use DRM bills as a way to reopen the DMCA and to get remedies through forcing technologies on other industries.
How about section 512 of the DMCA? It lets content owners work with you on DRM technologies.
It requires the service provider to accommodate standard technical measures. That's the same thing as digital rights management, only under section 512i, we agreed to create standards under broad voluntary industry discussion.
Has Hollywood or the recording industry approached you about these standards?
They never approached us.
Why not?
I don't know. It's been sort of a mystery to us why we haven't been approached, because the protection of DRM was one of their key issues, and they've had these remedies spelled out in the DMCA since 1998. We would have begun talks with them years ago if they had approached us.
Everyone agrees there won't be any action on those three (Hollings, Berman and Biden) copyright bills this year. But what's going to happen in 2003?
The difference from the DMCA days is that the content community could threaten the rest of the industry with liability, and we worked out a solution. In this new digital era, to reach a solution for many difficult problems, we have to create a win-win solution for all stakeholders. That means everyone has to receive some tangible benefit for working together in this manner. So, for example, users would want to receive some increased security in the area of fair use and rights in the digital world. Companies like Verizon would want increased access to content. We've proposed a compulsory license (for) both video and music as a way to compensate the content owner and legitimize the file-sharing and other activities that are occurring today that are very difficult to stop.
You're sounding a little like consumer groups and fair-use activists. Isn't it odd for such a huge company, a once-strictly regulated monopoly, to come across like Ralph Nader?
It's been an interesting time to be on the same side as groups like Public Knowledge and the Electronic Frontier Foundation. We find ourselves with shared interests in making sure that fair use is preserved, that users' expectation in new digital services are fulfilled, and that copyright is ultimately a law that involves balancing the interests of many parties. We have a 300-pound gorilla on one side of the scale. Many of us are joining together on the other, to reach that necessary balance.
Though if Verizon and other telecommunications firms get what you want, you'd bow out of the debate. Since your interests are not exactly the same as consumers, wouldn't you be parting ways if that happens?
Not necessarily. We also want to see a law that's balanced and that the user community will also accept. The copyright community has to understand the reality that if consumers are not happy with the compromise...many of these illegal activities are going to continue.
