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Tech Industry

An end to digital piracy?

Washington wants Silicon Valley and Hollywood to shake hands. But movie lobbyist Jack Valenti will have to find common ground with file swappers he says are "terrorizing" his industry.

Jack Valenti is the Hollywood blockbuster of Washington lobbyists.

As the chief executive of the Motion Picture Association of America, he talks in apocalyptic terms unmatched by lesser lights in Hollywood's executive suites. Belying his genteel drawl, his pronouncements are the equivalents of celluloid fireballs, warning of catastrophe for the industry.

A former aide to U.S. Presidents Kennedy and Johnson, he joined the movie industry's trade association in 1966 and has led the group ever since, turning it into one of the most powerful forces on Capitol Hill.

For the last several years, Valenti has increasingly focused on the dangers of Internet piracy, offering dire predictions that Hollywood's products--America's most visible export--are at risk of being cannibalized. He pulls no rhetorical punches, saying that file swappers are "terrorizing" his industry.

But the stakes have been raised. After studio heads complained about a lack of support from the technology industry, a bill was introduced in the Senate last month that would force Hollywood, tech companies and consumer-electronics companies to figure out a universal way to protect digital content against piracy. If the three groups can't figure it out on their own, federal regulators would step in to mandate an anti-piracy plan.

Valenti is a talker, not a technologist. He doesn't always get the precise description of the technology right. He's not the one to propose specific technological solutions for what he calls the "devilish" problem of peer-to-peer piracy.

But the bill has put Valenti back on his home turf. Even if the proposed legislation, sponsored by Sen. Ernest "Fritz" Hollings, D-S.C., faces steep political obstacles, it's clear that Washington wants Silicon Valley and Hollywood to get serious about coming to terms at the negotiating table.

CNET spoke with Valenti about the looming legislation and the on-again, off-again negotiations between Hollywood and Silicon Valley over piracy protection.

Q: What is your sense for the real need for Hollings' bill? What do you expect to happen with the legislation?
A: I issued a statement in support of it. But we want to narrow the focus of the bill as the legislative process moves forward. What needs to happen is we all sit down together in good-faith negotiations and come to some conclusions on how we can construct a broadcast flag (for keeping digital TV content off the Internet), on how we plug the analog hole (allowing people to record digital content off older televisions and other devices), and how we deal with the persistent and devilish problem of peer-to-peer.

"Most of the people know what they're doing. I know a lot of students know what they're doing is not right."
There are more than nine and a half million broadband subscribers now. Once those large pipes and high-speed access subscribers begin to increase, we can be terrorized by what's going on.

In a digital world, who on earth is going to invest large sums of venture capital in a movie if they believe it is going to be ambushed early? The value of that movie is going to be diminished. You don't have to be a Nobel Prize winner to figure that out.

Has there been a shift in the landscape since the Hollings bill was introduced, or since it became a serious possibility? Is the technology community more open to your concerns?
I think they are much more responsive than they were. I think they realize as I do that there are smart people inside each of these industries. But as long as everyone is suspicious of each other, what we have to insert in these discussions is good faith.

But as more people in the content and the technology and the consumer-electronics communities begin to think more intensively about these issues, we're all coming to the same conclusion at the same time. There is more incentive to do this now.

Including discussions?
None of us have anything to lose by sitting down and talking. But if we don't do this ourselves, someone is going to do it for us.

Many people in the technology community are concerned that the Hollings bill would take away some of their rights. What is your response to their criticism?
What rights are we talking about? I'm not trying to be glib. A lot of people who haven't thought it through believe that anything on the Internet is free, that you can just go and take down a movie from Morpheus.

But most of the people know what they're doing. I know a lot of students know what they're doing is not right.

These kids are smart. They know. What I'm trying to do is find a ready alternative to stealing. You can never protect movies against hackers. Hackers will break into anything. But 99 percent of people aren't hackers.

The movie industry today, with Morpheus and Kazaa being used, looks very much like the record industry and Napster in late 1999 or 2000. What have you learned from the experience of the record companies?

"You can never protect movies against hackers. Hackers will break into anything. But 99 percent of people aren't hackers."
I'm not faulting the RIAA (Recording Industry Association of America). They got hit hard by something they hadn't anticipated. We had some breathing room because of broadband. You can download a song over a 56K modem almost in real time. It takes a lot longer to download a two and a half hour movie, with all its graphics.

But there's only one thing to do, and that is for all the parties--content companies, technology companies and consumer-electronics companies--to sit down and figure out how to give consumers a legitimate alternative to stealing. If you put movies on the Internet in legitimate services, at fair prices, it will entice consumers.

Are we at a crisis point? Does something have to be done today, or this year?
It takes time to do this. If you don't begin now you're in trouble. President Johnson used to tell a story that President Kennedy told, about a French general that wanted to plant a specific kind of tree to line the driveway of his chateau. He called his gardener in and told him what he wanted. His gardener told him, "But mon general, that tree takes 50 years to bloom!" The general looked at him and said, "Then start planting right away! We don't have a day to lose."

That's why I think we need to do this now. In order to avoid a crisis, we need to start now, immediately.

Do you think that the environment has gotten better, where everyone is now willing to sit and negotiate in good faith?
I pray I am right. I want to give the other fellows the benefit of the doubt. I believe that everyone senses that the time to sit down is now, and we can work these issues out.