Eisner sees piracy peril for Snow White

Disney chief tells Congress that law is needed to prevent online theft of programming treasures

With Internet users rapidly converting to high-speed access, Disney Chairman Michael Eisner worries that it won't be long before getting a perfect copy of a Disney film will be the modern-day equivalent of waving a magic wand: clicking a mouse and waiting.

To protect Disney's hefty interests in copyrighted material, Eisner wants a law that would require computer and Internet-service providers to recognize an industry-standard mark that would identify copy-protected content and keep it out of the hands of digital thieves.

"This is the most devastating thing that has happened to the entertainment industry in 75 years," Eisner told the House-Senate Joint Economic Committee last Wednesday morning.

He said a new law is needed because computer makers and ISPs have not been eager to incorporate into their products technology that would protect copyrights, arguing that it would slow down computers while increasing costs to consumers.

"We need the cooperation of the computer industry, which has been dragging its feet," Eisner stressed.

But computer makers are not likely to come around soon.

"There's no doubt that piracy is wrong; we all can agree with that," said Jeff Joseph, spokesman for the Consumer Electronics Association. "What Eisner, the Motion Picture Association and the Recording Industry Association fail to recognize is that there's a difference between piracy and fair use. The fair use rights that consumers enjoy in the analog world.should continue in the digital age."

That is the same stance computer makers took in 1998, when Congress passed the Digital Millennium Copyright Act to protect digital content. That bill does not include any language requiring computer makers to include copyright protection in their products, although it goes a long way to protect the interests of copyright holders in a digital world. That law also upholds a long tradition of allowing consumers to make one free copy of any work for their own private reference, a practice that is legally referred to as "fair use."

Because it is so easy to make millions of perfect copies of digital products, content providers fear that pirates hiding behind fair-use doctrines will have a field day reselling movies, recordings and other programming without paying royalties.

This is already happening in the case of shared-distribution sites, such as Napster.com, where people can download songs in MP3 formats and share their libraries for free with anyone who is logged in. The music industry has been fighting the site, but Napster.com says its users have the right to one copy of any piece of music under fair-use laws. The courts have yet to decide the matter.

In the same vein, pirates can easily and quickly get one digital copy of a movie, such as Disney's recently released Dinosaur, and post it on the Internet where others can download it and share it with still others. Today, it can take hours or even days to download a file as big as a movie, but high-speed Internet access will change that.

Eisner is so worried about the problem that he is considering backtracking on plans to release products like Disney's classic Snow White on digital video disk. "If it is heavily pirated, that product-which is one of the backbones of our company-is gone forever," Eisner explained.

Eisner and his Washington lobbying team face a long battle in Washington, starting with educating Congress.

One Congressman who opposed the measure in 1998, Rep. Rick Boucher (D-Va.), said last week that he thought Eisner's plan was a good one, it just "didn't fit the structure" of the 1998 copyright law.

"I am hopeful we can find a way to implement the technology without doing a disservice to computers," Boucher said after Eisner's afternoon presentation to the Congressional Internet Caucus.

Senate Judiciary Committee Chairman Orrin Hatch (R-Utah), who has jurisdiction over such issues, said he plans a series of hearings this summer to look at the issue. "I'd like to keep the Internet as unregulated as possible," Hatch noted, "but we need to look at what regulations may be necessary."

So far, Disney is the only company publicly asking Congress for a new law, but Motion Picture Association of America President Jack Valenti said the matter is so important to his organization that it is creating a "digital strategies" department to look for industry solutions. MPAA this month will hire someone to run that department.

Besides asking for legislation, Eisner also asked Congress not to pass any law that would grant ISPs a compulsory copyright license for streaming. A compulsory copyright would allow ISPs to pay copyright fees into a pool and then stream any content they wanted without direct permission from the copyright holder.

That issue blew up at the end of last year, when language in satellite TV reform legislation was construed to mean that Internet service providers could avail themselves of a compulsory license meant strictly for satellite TV providers. Content companies want to make sure that Internet companies have to pay royalties to them directly before getting access to their content.