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81–896 PDF 2002

PIRACY OF INTELLECTUAL PROPERTY

ON PEER-TO-PEER NETWORKS

HEARING

BEFORE THE

SUBCOMMITTEE ON COURTS, THE INTERNET, 

AND INTELLECTUAL PROPERTY

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

SEPTEMBER 26, 2002

Serial No. 103

Printed for the use of the Committee on the Judiciary

(

Available via the World Wide Web: http://www.house.gov/judiciary 

(II)

COMMITTEE ON THE JUDICIARY 

F. JAMES SENSENBRENNER, JR., WISCONSIN, Chairman 

HENRY J. HYDE, Illinois 

GEORGE W. GEKAS, Pennsylvania 

HOWARD COBLE, North Carolina 

LAMAR SMITH, Texas 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

STEVE CHABOT, Ohio 

BOB BARR, Georgia 

WILLIAM L. JENKINS, Tennessee 

CHRIS CANNON, Utah 

LINDSEY O. GRAHAM, South Carolina 

SPENCER BACHUS, Alabama 

JOHN N. HOSTETTLER, Indiana 

MARK GREEN, Wisconsin 

RIC KELLER, Florida 

DARRELL E. ISSA, California 

MELISSA A. HART, Pennsylvania 

JEFF FLAKE, Arizona 

MIKE PENCE, Indiana 

J. RANDY FORBES, Virginia 

JOHN CONYERS, JR., Michigan 

BARNEY FRANK, Massachusetts 

HOWARD L. BERMAN, California 

RICK BOUCHER, Virginia 

JERROLD NADLER, New York 

ROBERT C. SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

MARTIN T. MEEHAN, Massachusetts 

WILLIAM D. DELAHUNT, Massachusetts 

ROBERT WEXLER, Florida 

TAMMY BALDWIN, Wisconsin 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California

PHILIP G. KIKO, Chief of Staff-General Counsel 

PERRY H. APELBAUM, Minority Chief Counsel 

SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

HOWARD COBLE, North Carolina, Chairman

HENRY J. HYDE, Illinois 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia, Vice Chair

WILLIAM L. JENKINS, Tennessee 

CHRIS CANNON, Utah 

LINDSEY O. GRAHAM, South Carolina 

SPENCER BACHUS, Alabama 

JOHN N. HOSTETTLER, Indiana 

RIC KELLER, Florida 

DARRELL E. ISSA, California 

MELISSA A. HART, Pennsylvania 

HOWARD L. BERMAN, California 

JOHN CONYERS, JR., Michigan 

RICK BOUCHER, Virginia 

ZOE LOFGREN, California 

WILLIAM D. DELAHUNT, Massachusetts 

ROBERT WEXLER, Florida 

MAXINE WATERS, California 

MARTIN T. MEEHAN, Massachusetts 

TAMMY BALDWIN, Wisconsin 

ANTHONY D. WEINER, New York

BLAINE MERRITT, Chief Counsel 

DEBRA ROSE, Counsel 

MELISSA L. MCDONALD, Full Committee Counsel 

ALEC FRENCH, Minority Counsel 

(III)

C O N T E N T S 

SEPTEMBER 26, 2002

OPENING STATEMENT 

Page 

The Honorable Howard Coble, a Representative in Congress From the State 

of North Carolina, and Chairman, Subcommittee on Courts, the Internet, 

and Intellectual Property .................................................................................... 1

The Honorable Howard L. Berman, a Representative in Congress From the 

State of California, and Ranking Member, Subcommittee on Courts, the 

Internet, and Intellectual Property .................................................................... 2

The Honorable Rick Boucher, a Representative in Congress From the State 

of Virginia ............................................................................................................. 7

The Honorable Bob Goodlatte, a Representative in Congress From the State 

of Virginia ............................................................................................................. 9

The Honorable Zoe Lofgren, a Representative in Congress From the State 

of California .......................................................................................................... 10

The Honorable Darrell E. Issa, a Representative in Congress From the State 

of California .......................................................................................................... 11

The Honorable William D. Delahunt, a Representative in Congress From 

the State of Massachusetts ................................................................................. 13

The Honorable Ric Keller, a Representative in Congress From the State 

of Florida ............................................................................................................... 13

The Honorable Robert Wexler, a Representative in Congress From the State 

of Florida ............................................................................................................... 14

The Honorable Martin T. Meehan, a Representative in Congress From the 

State of Massachusetts ........................................................................................ 16

The Honorable Tammy Baldwin, a Representative in Congress From the 

State of Wisconsin ................................................................................................ 17

The Honorable Anthony D. Weiner, a Representative in Congress From the 

State of New York ................................................................................................ 17

WITNESSES 

Ms. Hilary Rosen, Chairman and Chief Executive Officer, Recording Industry 

Association of America 

Oral Testimony ..................................................................................................... 19

Prepared Statement ............................................................................................. 21

Ms. Gigi Sohn, President, Public Knowledge 

Oral Testimony ..................................................................................................... 23

Prepared Statement ............................................................................................. 25

Mr. Phil Galdston, Songwriter-Producer 

Oral Testimony ..................................................................................................... 33

Prepared Statement ............................................................................................. 35

Mr. Randy Saaf, Chief Executive Officer, MediaDefender 

Oral Testimony ..................................................................................................... 38

Prepared Statement ............................................................................................. 40

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Prepared Statement of the Honorable Darrell E. Issa, a Representative in 

Congress From the State of California ............................................................... 12

Prepared Statement of Chris Gorog, CEO, Roxio, Inc. Santa Clara, CA (Remarks for the Aspen Summit/Symposium on Digital Rights—August 20, 

2002) ...................................................................................................................... 55

Page

IV

Prepared Statement of the Honorable John Conyers, Jr., a Representative 

in Congress From the State of Michigan ........................................................... 72

Prepared Statement of the Honorable Henry Hyde, a Representative in Congress From the State of Illinois .......................................................................... 73

The Washington Post Article of September 24, 2002 ............................................ 74

APPENDIX 

Prepared Statement of the Honorable Lamar Smith, a Representative in 

Congress From the State of Texas ...................................................................... 77

Prepared Statement of the Honorable Howard L. Berman, a Representative 

in Congress From the State of California, and Ranking Member, Subcommittee on Courts, the Internet, and Intellectual Property ......................... 77

Prepared Statement of the Honorable Rick Boucher, a Representative in 

Congress From the State of Virginia .................................................................. 80

Prepared Statement of David P. McClure, President, US Internet Industry 

Association ............................................................................................................ 80

Prepared Statement of the National Music Publishers’ Association ................... 102

Letter from Donald M. Whiteside, Vice President Legal & Goverment Affairs, 

Intel Corporation .................................................................................................. 104

Prepared Statement of Steve Griffin, Chairman and CEO, StreamCast Networks, Inc. ............................................................................................................ 107

News Release from the American Legislative Exchange Council (ALEC) .......... 111

Letter from Barbara Simons, Ph.D., and Eugene H. Spafford, Ph.D., CoChairs, U.S. ACM Public Policy Committee (USACM), Association for Computing Machinery ................................................................................................. 112

Letter from Marybeth Peters, Register of Copyrights of the United States 

of America, United States Copyright Office ....................................................... 114

Letter from Tom Turner, General Manager, Sound Choice ................................. 116

Letter from Michael Wood ...................................................................................... 118

Letter from Linn R. Skinner, Skinner Sisters ....................................................... 122

Executive Memorandum from The Heritage Foundation ..................................... 124

Letter from Barton Herbison, Executive Director, Nashville Songwriters Association International ............................................................................................ 126

Letter from Lewis M. Bachman, Executive Director, The Songwriters Guild 

of America ............................................................................................................. 127

Prepared Statement of John Hale, Nicholas Davis, James Arrowood and 

Gavin Manes, Center for Information Security, University of Tulsa .............. 129

Prepared Statement of Stephen Hinkle ................................................................. 134

Memorandum from Philip S. Corwin, Butera & Andrews, Attorneys at Law .... 142

Letter from Raymond E. Ozzie, Chairman and CEO, Groove Networks ............ 145

Prepared Statement of Panos Anastassiadis, President Chief Executive Officer, Cyveillance, Inc. ............................................................................................ 148

Letter from Johnathan Zuck, President, Association for Competitive Technology .................................................................................................................... 149

Prepared Statement of Edward W. Felten, Associate Professor of Computer 

Science at Princeton University .......................................................................... 155

(1)

PIRACY OF INTELLECTUAL PROPERTY

ON PEER-TO-PEER NETWORKS 

THURSDAY, SEPTEMBER 26, 2002

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY, COMMITTEE ON THE JUDICIARY, Washington, DC. 

The Subcommittee met, pursuant to call, at 9 a.m., in Room 

2141, Rayburn House Office Building, Hon. Howard Coble [Chairman of the Subcommittee] presiding. 

Mr. COBLE. Good morning, ladies and gentlemen. The Subcommittee will come to order. 

With the Subcommittee’s permission, and the audience’s indulgence, I’m going to deliver a longer than usual opening statement. 

Prior to addressing the subject matter of today’s hearing, I feel 

obliged to acknowledge that this is very likely the final time that 

I will preside over a hearing or markup as Chairman of the Subcommittee on Courts, the Internet, and Intellectual Property. While 

I won’t close the door on examining other issues during the muchrumored lame-duck session, I can’t say with certainty that we will 

meet again formally as a Subcommittee to conduct business in the 

107th Congress. We will play that by ear. 

If this is in fact my swansong, I want to say thank you. 

I’ve been a willing participant in politics for a long time, but I 

confess that during my service as an elected official through these 

many years, I have never enjoyed policymaking more than I have 

with our Subcommittee. I was fortunate to have been surrounded 

by many decent, creative, and industrious people, Republican and 

Democratic Members, staffers, and those from other public and private quarters, who wanted to participate in the policy debates of 

the past 6 years. I’m reluctant to begin reciting names, because 

once you start on that course, you inevitably omit people who ought 

to be recognized. 

But what has impressed me about everyone connected to our 

Subcommittee during my tenure as Chairman has been a collective 

willingness, for the most part, to work together, whatever our differences. I’m old enough to understand the rough and tumble nature of the legislative process, and to a very real extent, that feature is a healthy component of policymaking, reflecting as it does 

our constitutional right as Americans to express ourselves freely. 

I believe, in this room, pardon my immodesty, but in this room, 

on this podium, and with many of you in the audience, I think 

we’ve done a better than average job for the past 6 years at exVerDate Jan 17 2002 09:45 Nov 05, 2002 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 G:\WORK\COURTS\092602\81896.000 HJUD1 PsN: 81896
2

pressing ourselves civilly, not just freely. And I think we may attribute that tone to the decency of those assembled herein. 

Again, I thank you all very much for the generosity you’ve extended to me. I consider our accomplishments of the past 6 years 

to be better than average work. And I think during that time, folks, 

I think we have supported owners of copyrights, patents, and 

trademarks, both those who are financially struggling and those 

who are financially solvent, and the people who represent them. 

Now, I am going to mention a couple names now. Howard Berman, who sits to my left—in fact, he is to my left generally, but 

now literally to my left. [Laughter.] 

Howard has been a tremendous Ranking Member for the past 4 

years. Barney Frank, the Ranking Member the first 2 years I 

served as Chairman. Alec French and his able Democrat staffers. 

Blaine Merritt and his able Republican staffers. Mitch Glazier, who 

preceded Blaine in that role. Eunice Goldring, who does the administrative work and keeps things away from the reefs and the rocks 

and the shoals on a day-to-day basis. And of course, Chairman 

Hyde, Chairman Sensenbrenner, and Ranking Member Conyers. 

And all Members of the Subcommittee. 

In the event that we do have another hearing, Howard, I promise 

you won’t have to hear this speech again. This will be the final 

speech. 

Normally, as you all know, I deliver my opening statement, and 

then I recognize the distinguished gentleman from California. 

Today I’m going to reverse that procedure because the bill before 

us is Howard’s bill. So I am going to now recognize the distinguished gentleman from California, the Ranking Member, for his 

opening statement. I will then give my opening statement. And 

then we’ll recognize others who want to give opening statements. 

Mr. Berman? 

Mr. BERMAN. Well, thank you very much, Mr. Chairman. And I 

also may take a little more time than is generally allotted for my 

opening statement. The only thing I can assure you is that if I said 

everything I wanted to say, it would be a lot longer. 

But I think, first of all, before getting to the legislation before us, 

I just wanted to take a moment to reflect on your tenure as Chairman. As you mentioned, it is very possible that your chairmanship 

of this Subcommittee ends—well, as Republican rules now stand, 

your tenure as Chairman ends with the end of the 107th Congress. 

And I really want you to know that I have deeply enjoyed and 

deeply value our relationship as Chairman and Ranking Member 

these past 4 years. I say this not in any pro forma way but sincerely, that you have led this Subcommittee through innumerable 

legislative and political challenges, and you have done so with 

characteristic charm, will power, and an always easygoing demeanor. 

And your record I think is worth talking about for a moment because the accomplishments of this Subcommittee under your tenure 

have been really enormous. Think about it for a second. The Digital 

Millennium Copyright Act. The American Inventors Protection Act. 

We tried a long time with that legislation before you put it through 

this Committee, this House, and this Congress. The Sonny Bono 

Copyright Term Extension Act. The No Electronic Theft Act. The 

3

Satellite Home Viewer Improvement Act. The Anti-Cybersquatting 

Consumer Protection Act. I even remember the Work Made for 

Hire and Copyright Correction Act. [Laughter.] 

Mr. COBLE. If the gentleman will suspend, so do I. [Laughter.] 

Mr. BERMAN. And the Madrid Protocol Implementation Act. And 

that we did a number of times, if I remember. And it looks like 

today may be the day that we finally send that to the White House. 

Other innumerable but less heralded bills. 

I think that the American public owes you a debt of thanks for 

your dedicated service in your role as Chairman of this Subcommittee the past 6 years. I owe you a personal debt of thanks 

for including me as a partner in the leadership of the Subcommittee. I couldn’t have been blessed with a better person to 

work with from the oppose side of the aisle than you, and I’m very 

grateful for having had the opportunity to work with you and to 

serve with you. 

Now, to turn to the oversight hearing on the P2P piracy issue 

and the legislation. 

I think there have been some truly outrageous attacks on the 

P2P Piracy Prevention Act, and I want to take this opportunity to 

try and set the record straight. When we first introduced the P2P 

piracy bill, the Chairman and I, as well as Mr. Smith and Mr. 

Wexler, I never expected that anyone would challenge the underlying premise of the bill, namely that copyright owners should be 

able to use reasonable, limited, self-help measures to thwart rampant P2P piracy. But there are, it turns out, folks who actually challenge that premise. 

The head of a big trade association claims it’s legal to make unauthorized distributions of copyright works to 100 million P2P 

users. P2P software companies claim that, even if illegal, P2P piracy causes no harm. Representatives of the computer industry say 

that only record companies suffer harm, and they deserve it for 

charging too much. Others vaguely theorize that copyright owners’

self-help will threaten security or privacy. And still other piracy 

profiteers attempt to thwart any solution to P2P piracy and then 

throw their hands up and say it’s an insoluble problem. 

Let’s start with a basic fact: Unauthorized distribution or 

downloading of copyrighted works on public P2P networks is illegal. To paraphrase the 9th Circuit in the Napster case, public P2P 

users ‘‘who upload file names to the search index for others to copy 

violate a copyright holders’ distribution rights. P2P users who 

download files containing copyrighted music violate a copyright 

holder’s reproduction rights.’’ Any attempt to say otherwise is a 

bald-faced attempt to rewrite very well-settled law. 

Let’s move to another indisputable fact: Massive theft of copyrighted works is the predominant use for public P2P networks 

today. There are now approximately 3 billion—3 billion—files P2P 

downloads a month—a month. The vast majority of these 

downloads contain copies of copyrighted works for which the copyright owners receive no compensation. 

Now, another fact: P2P piracy doesn’t just affect the bogeymen—

record companies and movie studios. P2P piracy destroys the livelihood of everyday people. 

4

What do piracy profiteers have to say to Linn Skinner, a Los Angeles needlework designer whose livelihood has been destroyed by 

Internet piracy? Or about Steve Boone, a Charlotte small-business 

man—notice, Los Angeles, Charlotte—who has watched P2P piracy 

decimate his karaoke tape company? How do they respond to Mike 

Wood, a struggling Canadian recording artist who believes P2P piracy will derail his recording career before it gets off the ground? 

What do piracy profiteers say to the vast majority of songwriters 

who make less than $20,000 a year and have yet to make one thin 

dime from the massive P2P piracy of their works? 

Songwriters can actually quantify their P2P piracy losses. By 

statute, a songwriter is both entitled and limited to collecting 8 

cents for every digital phonorecord delivery of sound recordings 

containing her songs. Each illegal P2P download of a song robs the 

songwriter of that 8 cents. 

Those 8 cents may not seem like much, but multiply 8 cents by 

the reported 3 billion monthly P2P downloads. It calculates out to 

$240 million a month. Even one-tenth of that amount represents 

real money to the 5,000 American songwriters. 

Now another fact: If piracy profiteers were truly concerned about 

security and privacy threats to P2P users, they would address the 

security and privacy threats posed by the P2P networks themselves. A recent white paper by the University of Tulsa Center for 

Information Security details how KaZaA, Gnutella, and other popular P2P networks expose P2P users to spyware, Trojan horses, 

system exploits, denial of service attacks, worms, and viruses. A 

joint paper by Hewlett-Packard labs and the University of Minnesota details how the vast majority of P2P users are exposing personal information, such as credit card numbers, to every other P2P 

user. In fact, the United States courts, the House, and the Senate 

all block the use of public P2P networks because of the security 

concerns they pose. 

Do the piracy profiteers talk about these real security and privacy concerns? No. And you know why—because it is the piracy 

profiteers who point the spyware on the computers of P2P users so 

they can surreptitiously collect their personal information and sell 

it to third parties. 

Another fact: P2P companies could design their software to stop 

piracy, but they don’t. Grokster has designed its P2P software to 

filter out pornography, but has it ever tried to filter out copyright 

infringements? Napster claimed it couldn’t stop piracy, but after 

the court ordered it to do so, it suddenly found a way to stop most 

if not all piracy on its networks. 

Rather than looking for solutions to piracy, P2P companies are 

designing their systems to be better piracy tools. Both Morpheus 

and KaZaA have upgraded their software specifically to impair the 

ability of copyright owners to proliferate decoy files through the 

networks. 

Based on all these facts, what can an objective person conclude 

other than many companies plan to profit from piracy and have no 

intent or desire to stop it? 

I look at these facts and figures, at the faces of copyright owners, 

and I see a problem in desperate need of a solution. P2P piracy 

must be cleaned up and cleaned up now. The question is, how? 

5

I think my P2P piracy bill is an important part of the solution. 

The Peer-to-Peer Piracy Prevention Act is quite simple in concept. 

It says that copyright owners should not be liable for thwarting the 

piracy of their works on P2P networks if and only if they can do 

so without causing harm. 

You might reasonably wonder why we need to pass legislation 

giving property owners the right to protect their property against 

theft. After all, the U.S. Supreme Court has held that ‘‘an owner 

of property who seeks to take it from one who is unlawfully in possession has long been recognized to have greater leeway than he 

would have but for his right to possession.’’ The claim of ownership 

will even justify a trespass and warrant steps otherwise unlawful. 

The problem is that a variety of State and Federal statutes may 

create liability for copyright owners engaging in otherwise justifiable self-help. That’s not fair. Copyright owners should have the 

same right as other property owners to stop the brazen theft of 

their property. The P2P piracy bill simply ensures that the law will 

no longer discriminate against copyright owners. 

Obviously, it is critical that a liability safe harbor be appropriately limited. In drafting the P2P piracy bill, I tried to ensure 

that only reasonable self-help technologies would be immunized 

and the public would be protected from harm and that overreaching or abuses by copyright owners would be severely punished. 

The most important limitation in the bill is the narrow breadth 

of the safe harbor itself. The bill says that copyright owners get immunity from liability under any theory but only for impairing the 

unauthorized distribution, display, performance, or reproduction of 

their own works on public P2P networks. 

If the copyright owner’s impairing activity has some other effect, 

like knocking a corporate network offline, the copyright owner remains liable under whatever previous theory was available. 

Some claim that the bill is not limited that way. Their claim appears to be that the bill gives a copyright owner immunity for anything she does as long as it has the effect of stopping piracy on a 

P2P network. By their logic, the bill allows a copyright owner to 

burn down a P2P pirate’s house if the arson stops the pirate’s illegal file trading. Clearly, the bill says nothing of the sort, and no 

judge or disinterested party could read it that way. 

The bill specifically states that a copyright owner cannot delete 

or alter any file or data on the computer of a file trader. Thus, a 

copyright owner can’t send a virus to a P2P pirate. It can’t remove 

any files from the pirate’s computer. And it can’t even remove files 

that include the pirated works. The safe harbor does not protect a 

copyright owner whose anti-piracy actions impair the availability of 

other files or data within the P2P network, except in certain necessary circumstances. 

Some folks have raised concerns about this provision, and we’re 

thinking about alternative language that could resolve their concerns. The bill denies protection to a copyright owner if her antipiracy action causes any economic loss to any person other than the 

P2P pirate. The safe harbor is also lost if the anti-piracy action 

causes more than de minimis loss to the property of the P2P pirate. 

6

Finally, the safe harbor is lost if the copyright owner fails to notify the Attorney General of the anti-piracy technologies that he or 

she plans to use or fails to identify herself to an inquiring file trader. 

Obviously, these limitations would be meaningless if copyright 

owners did not have adequate incentive to obey them. The P2P piracy bill provides such incentives by subjecting transgressing copyright owners to more liability than they have under current law. 

This is a critical point. If a copyright owner falls outside the safe 

harbor, an aggrieved party could sue the copyright owner for any 

remedy available under current law and for an additional civil remedy created by the P2P piracy bill. The bill also gives the U.S. Attorney General new power to seek an injunction against transgressing copyright owners. 

The potential for liability under this wide variety of remedies 

provides copyright owners with strong incentives to operate within 

the strict limits of the safe harbor. 

I think the P2P piracy bill provides a strong starting point for 

legislation enabling copyright owners to use reasonable self-help to 

thwart P2P piracy. I don’t claim to have drafted a perfect bill. I 

welcome suggestions for improvements. I know, however, that 

while I will listen carefully to those who wish to solve the P2P piracy problem, I’m not that interested in being solicitous of those 

who wish to profit from it. 

Thank you very much, Mr. Chairman, for your indulgence here. 

Mr. COBLE. Thank you, Mr. Berman. And I thank you as well, 

Howard, for your generous comments at the outset. 

We normally restrict opening statements to the Ranking Member 

and the Chairman, but because of the widespread interest that’s 

been focused upon this issue, I want to ask my Members, how 

many would like to make opening statements? 

Mr. ISSA. I’ll submit mine for the record, Mr. Chairman. 

Mr. COBLE. If you would. 

And I think it’s in order that Mr. Berman exceeded the 5 minutes, because this is his bill, and I think that was in order. But 

I would ask the rest of you, if you would, to confine your opening 

statements, if you can, to within the 5-minute framework, because 

we do have a busy day on the floor today. 

I have been the beneficiary of complaints regarding bills that I 

have introduced, but I have never received such notoriety from a 

bill that I did not introduce. I co-sponsored this bill. And if Howard 

Berman asked me today to co-sponsor it, I would do so again. 

As Chairman of this Subcommittee—and, for that matter, as 

Members of this Subcommittee—I think it is our responsibility to 

promote efforts to reduce infringement or piracy of intellectual 

property. To that end, this hearing is intended to explore the problem of piracy on P2P networks and possible remedies. 

As Mr. Berman just said, if you have suggestions, come forward 

with them. We’re seeking solutions. 

Many people have inserted scare tactics into this. If you can successfully play with a scare tactic and frighten people, you have a 

leg up. I’ve read in different articles where anyone who supports 

this legislation is in the pocket of Hollywood, and I take umbrage 

with that for two reasons. A, it implies that only Hollywood beneVerDate Jan 17 2002 09:45 Nov 05, 2002 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 G:\WORK\COURTS\092602\81896.000 HJUD1 PsN: 81896
7

fits from anti-piracy approaches. And B, it implies that we’re in 

somebody’s pocket, and I don’t think there’s anyone on this Subcommittee that’s in the pocket of anyone. 

Recent technological advances have created a digital environment that is almost solely devoted to the unauthorized use of copyrighted works. In other words, P2P network customers are primarily using the program to obtain music, movies, software, photographs and other works without paying for the product. 

Let me be clear at the outset that I am not opposed to P2P networks. In fact, I believe that P2P networks have potentially beneficial uses that will play an increasingly important role in how 

business is conducted. 

I am, however, opposed to the rampant stealing that is occurring 

on these networks. While not every download is an infringement, 

statistics clearly reveal that a vast majority of them are in fact illegal. Between 12 and 18 million movie files and 2.6 billion music 

files are downloaded for free on the P2P networks each month. And 

the U.S. Customs Service reports that certain elements within the 

online community are responsible for at least $1 billion annually 

in lost sales of computer games, business software, music, and 

movies. 

This translates into huge economic losses for not just large media 

companies but also individual songwriters, photographers, graphic 

artists, and software developers all over the country. 

The question, then, is, how do we stop the massive piracy on P2P 

networks? Today we will hear from the panel about potential answers to the P2P piracy problem and their implications. 

The gentleman from California, Mr. Berman, has developed one 

solution, which he believes will work. It is my understanding that 

this bill is intended to clarify that copyright owners may utilize 

new technologies to protect their property as it is distributed on 

P2P networks. No doubt the panel will also comment on the merits 

of the proposed legislation. 

I’m also reminded of ongoing private negotiations between the 

content industry and the technology providers to find a technological solution to digital piracy. It is furthermore my understanding that the process nearly reached a consensus on a watermark technology for use on DVDs that could also have important 

implications for preventing P2P piracy. 

I strongly support efforts by industry to resolve these issues 

through private agreements. I encourage both sides to redouble 

their efforts and to narrow their differences. And should this process fail to reach an agreement, it is very likely, I think, that this 

Subcommittee may well examine the reasons for its failure at a 

later date. 

I anticipate that this hearing will provide lively debate on a complex and controversial issue. I look forward to learning more about 

the status of P2P piracy problems and potential solutions to the 

problem of digital theft. 

I am now pleased to recognize the gentleman from Virginia, Mr. 

Boucher, for 5 minutes. 

Mr. BOUCHER. Thank you very much, Mr. Chairman. Let me say 

at the outset that I appreciate the Subcommittee holding a hearing 

on the matter of music distribution across the Internet. But I’ll 

8

have to confess a preference for a somewhat different focus than 

that of this particular hearing. 

There is a need, I think, for legislative action in this Committee 

to facilitate the lawful distribution of music across the Internet in 

a manner that assures that all owners of copyrights are paid. Mr. 

Cannon and I have introduced a comprehensive measure, the 

Music Online Competition Act, which, if enacted into law, would 

help achieve that goal. 

The Copyright Office has also recommended legislation that 

would help achieve that goal. The recording industry can achieve 

that goal if it will simply place entire inventories on the Web for 

permanent, portable downloading at a reasonable price per track. 

There’s a recent Jupiter Media Metrix study that shows that 

two-thirds of the public values the availability of a broad inventory 

of music, the assured quality of the download, and the ability to 

keep the music permanently and move it from one player to another in the personal environment as more important considerations than price. These two-thirds of the public would clearly be 

willing to pay a reasonable price if the other elements of quality, 

availability, and portability are present. 

In my view, the recording industry does not need the legislation 

which the Subcommittee is considering today. It should put entire 

inventories on the Web for permanent portable download at a reasonable price. That’s the way to compete with the lower quality 

free peer-to-peer file-sharing services. 

Turning to the bill at hand, I question at the outset what it is 

that the industry wants to do that would be authorized under the 

provisions of this bill that it can’t do under current law. Spoofing 

is allowed now. Decoys are allowed now. Redirection to legitimate 

Web sites is allowed now. I hope that the witnesses will be very 

specific about what it is that the industry wants to do by way of 

self-help that it can’t do at present. 

And I have some other questions. Would any of these intended 

self-help mechanisms harm innocent Internet users by perhaps 

slowing down the speed of a shared network, such as a cable 

modem service? Would any of these mechanisms permit the recording industry to intrude into the personal computer space of an 

Internet user? And if so, what are the implications of such intrusions for the privacy rights of individuals? If any damage is done 

to the hardware, software, or data owned by an Internet user, how 

would the damaged party know who to proceed against? After all, 

no notice to him is required under the bill that his space is being 

invaded or who is doing the invading. And so if he’s damaged, how 

does he know who to recover from? 

What assurance will there be that material which is protected 

under the fair use doctrine will not be blocked or removed by a selfhelp invasion? What are the implications for the Internet’s 

functionality when the inevitable arms race develops and countermeasures are used to block self-help mechanisms? I can imagine 

that if the recording industry launches what amounts to a denial 

of service attack against Internet users, that denial of service attacks will, in turn, be launched against the industry, with broad, 

adverse effects on Internet speed to the disadvantage of Internet 

users generally. 

9

These are a few of the matters that concern me. And I very much 

hope that these questions will be addressed by the witnesses this 

morning. 

On a personal note, Mr. Chairman, let me extend to you also my 

thanks for the way in which you have conducted the business of 

this Subcommittee. You and I on occasion have disagreed on substance, but we’ve always disagreed agreeably. And I want to commend you, Mr. Chairman, for the fair and evenhanded way in 

which you have conducted the business of this Subcommittee. It’s 

a pleasure serving with you in the Congress. I look forward to 

many future years of our service together, and I wish you well. 

Thank you. 

Mr. COBLE. Thank you, Mr. Boucher. I appreciate that. 

The gentleman from Virginia. 

Mr. GOODLATTE. Mr. Chairman, thank you. 

Mr. COBLE. If the gentleman would suspend, I appreciate, Rick, 

your meeting the 5-minute rule. If you all could work with 5 minutes, because we are going to be called to go to the floor ultimately. 

I recognize the gentleman from the valley. 

Mr. GOODLATTE. Mr. Chairman, I thank you also for holding this 

hearing on a very, very important issue which goes to the heart of 

the use of the Internet by the public and the need to protect valuable copyrighted works by the creators and owners of those works. 

I have not yet co-sponsored this legislation. I am very, very concerned about piracy of copyrighted works. And I am very, very supportive of efforts to try to combat that. I am, as many of you may 

know, the author of the NET Act, which passed the Congress several years ago, was signed into law, that gives new tools to law enforcement to go after those who steal copyrighted works or give 

away for free the copyrighted works that do not belong to them. 

However, I am also concerned about what this legislation’s implications are for the use of the Internet. Will it work, or will it simply cause an escalating war of various technologies that will not 

lead to the best utilization of the Internet? 

I note the chart over there that indicates that those who promote 

these networks have already developed tools that will bypass some 

of the technology that those who would protect copyright want to 

deploy. They’ve already found ways to detect video files that are socalled spoof files or bogus files. 

And so I want to know the implication of that. I hope these witnesses today will share with us their concern about that. 

And I am very, very concerned about the misuse of P2P networks. I happen to think that they provide a very good service and 

a very good function for people to get access to a multitude of information that’s in the public domain. However, for things that are 

not in the public domain, for things that are privately owned, like 

copyrighted works, they have, in my opinion, a responsibility to 

come forward and to deploy the technology that apparently would 

bypass and detect the spoof files obviously would also detect legitimate copyrighted files, and it should be deployed in a such a way 

to protect those files. And I’d like to know why that is indeed not 

being done to protect copyrighted works and why instead the largest peer-to-peer network, KaZaA, has fled the United States, via 

the Netherlands to Australia, and now finds itself on the island of 

10

Vanuatu as its principle location for doing business obviously for 

the purpose of evading the ability of those who would protect copyrighted works and enforce the laws of the United States and other 

nations to do so. 

So, Mr. Chairman, I will listen with great interest in how this 

legislation will work and want to hear from these witnesses and 

their opinion on the legislation and will reserve my judgment. 

Thank you very much. 

Mr. COBLE. I thank you, sir. 

I am pleased to recognize the gentlelady from California for 5 

minutes. 

Ms. LOFGREN. Thank you, Mr. Chairman. 

I think there’s growing consensus that advanced peer-to-peer applications are the next killer application that will drive growth in 

the computer hardware, software and equipment industries as 

businesses and consumers demand faster and more powerful PCs. 

The P2P applications also have the potential to give consumers a 

reason to embrace broadband. 

But today we’re not here to discuss ways to harness the potential 

and encourage investments in peer-to-peer applications. We’re here 

solely to focus on ways to help copyright owner and holders sabotage peer-to-peer networks if they think their works are being infringed. 

Now, illegal file-sharing is a problem. But the breadth of the current proposal is of concern to me. Among other things, it seems to 

give copyright holders the power to launch denial of service attacks 

and other invasive self-help measures. It appears to authorize and 

make it easy for copyright holders to delete an individual’s files if 

they receive authorization in a non-negotiable licensing agreement. 

And it would make it nearly impossible for consumers to seek redress against copyright holders that cause unwarranted damage, 

much less find out who caused the damage. 

One of the most disturbing parts of the current discussion to me 

is that the interests of consumers tend to be overlooked here in the 

halls of Congress. We have major industries, including technology 

and entertainment industries, but the consumers’ interests sometimes don’t get attended to. And while some would say there are 

millions of pirates—and there are people who are unfairly taking 

advantage of peer networks—we also know that millions of consumers want digital distribution. So we can debate the spoofing 

and the decoys and the interdiction, but the problem of online privacy will not be solved, in my judgment, until those who have content and those in the technology world give consumers what they 

want: digital distribution that is affordable, secure, and userfriendly. 

The fact is that peer-to-peer networks, like the Internet, are here 

to stay. And I hope that this Committee will some day have the 

ability to explore ways to harness their potential so that users can 

get what they want and that content and copyright holders can be 

treated fairly. 

I would also like to note, Mr. Chairman, how much I have enjoyed serving with you on this Subcommittee. We have not always 

agreed, but the disagreements have never been partisan. This has 

11

been sort of an island of nonpartisanship in an oftentimes choppy 

sea of partisan nuttiness. 

And I would also like to thank Mr. Berman, who I admire a 

great deal and consider a friend. And while I do not support this 

current effort, I know that his motives are nothing but honorable. 

And I have a great hope that we will be able to pursue these issues 

agreeably and successfully in the next Congress. 

And I yield back the balance of my time. 

Mr. COBLE. I thank the gentlelady. Thank you, Zoe, for your comments. 

The gentleman from California. 

Mr. ISSA. Thank you, Mr. Chairman. And I, too, would like to 

thank Mr. Berman for producing yet another bill that, although I 

do not co-sponsor it, in fact points up a problem that has not gone 

away, a problem that sooner or later has to be dealt with by this 

body. 

I hope as we go through the hearing process and probably in the 

next Congress, that this bill or its successor becomes a bill that in 

fact we can all embrace. 

I would like to say here today that I have the good fortune of 

knowing, I believe, the association executive who made those statements. And I would like to disassociate myself with anyone who believes for a minute that Napster was in fact not a very organized 

way of stealing intellectual property, just as KaZaA is an extremely 

good example of exactly what this body, this Administration, and 

both the copyright holders and the technology community must ban 

together, with laws or with association work, and prevent. And I 

would call on that association and others to redouble their efforts 

to find a solution that doesn’t require a clumsy legal mandate. 

Mr. Chairman, I’d like to put my official opening statement in 

the record. 

Mr. COBLE. Without objection. 

Mr. ISSA. I would like to just comment on two things in opening, 

so that hopefully we set a tone for this. 

First of all, I got on this Committee not because I’m an attorney 

but because, in fact, I was probably the only person to come before 

this body who ever was ripped off for their intellectual property, 

went to court, won judgments, enforced the judgment, collected millions of dollars that were taken from my company by people who 

had no respect for a piece of paper and felt that their product outranked our piece of paper, our inventions. 

So I come here with a particular bent that in fact statements 

that were made here—which I do not want to insult people who 

made them; I think they were made without perhaps regard for the 

words. Statements like ‘‘reasonable prices’’ are in fact not part of 

the copyright, patent, or trademark debate. A reasonable price may 

be the price you charge yourself if you’re charging others. That’s a 

fair and similar price. 

But I want to make it very clear that I for one will not ask that 

online services be mandated to meet an artificially different price. 

I believe they should. That’s a personal opinion. But I think it’s important that the copyright holders understand that if they choose 

to put their product on at $29.95 or at $.99, that is a business deciVerDate Jan 17 2002 09:45 Nov 05, 2002 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 G:\WORK\COURTS\092602\81896.000 HJUD1 PsN: 81896
12

sion that they have to make consistent with the constitutional protection that they were clearly granted by our Founding Fathers. 

And I think as we go through the debate, hopefully we can eliminate this theory that piracy is the result of unreasonable prices by 

the copyright holders. I think that’s often something that slips into 

the debate. And although certainly you can undercut the pirates to 

a certain extent, you can never get below someone who didn’t pay 

for the product, and particularly on the Internet. 

In closing, Mr. Chairman, I think that this legislation being 

talked about is the most important thing that we can do in this 

Congress. But in the next Congress, if we cannot orchestrate industry-led solutions, I have no doubt that this Committee must act 

and must find a piece of legislation that is as least flawed as possible. And I look forward to working with all parties on that. 

Thank you, Mr. Chairman. I yield back. 

[The prepared statement of Mr. Issa follows:]

PREPARED STATEMENT OF THE HONORABLE DARRELL E. ISSA, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF CALIFORNIA

Thank you Chairman Coble for holding this Oversight Hearing on ‘‘Piracy of Intellectual Property on Peer-to-Peer Networks (P2P).’’

I thank the Ranking Member of this Subcommittee, Howard Berman from California, on introducing H.R. 5211, which is an attempt to address the issue of P2P 

networks and piracy. I hope that this legislation helps to shine some light on a very 

important issue. 

As a former businessman who owns numerous patents and trademarks, I understand the need to protect intellectual property. When I encountered infringers of my 

trademarks or companies that stole my patents to market their products, I was 

forced to litigate. Unfortunately, the copyright owners, because of the presence of 

P2P networks and the proliferation of new online users downloading pirated material, have had to follow the same course as I and have not been as successful. 

Since the introduction and immediate success of Napster, the Internet has been 

viewed by many as a means to download free music. Now, with the demise of 

Napster, new P2P networks, like Kazaa, Morpheus, BearShare, Grokster and 

Gnutella, provide channels for downloading music and movies with digital quality. 

The ease in which one can download pirated material is disheartening for me as an 

intellectual property owner. 

Copyright owners have attempted to discourage the piracy taking place on P2P 

networks by different means including litigation and most recently, interdiction, redirection, decoys and spoofing. Still, P2P networks are successfully evading the law 

by fleeing to foreign countries or taking refuge on offshore locations. Unfortunately, 

with each illegal P2P network that is shut down a new one takes its place. Each 

new P2P network seems to be a more decentralized program that will be more elusive to litigate. In the not-too-distant future, we will see other programs that will 

provide pirated material on bigger, better, faster nodes. The status quo is not acceptable for the copyright owners, nor is it in the interest of the American People. 

Without swift action, P2P networks that advocate pirating copyright material, 

without just compensation of any sort, will continue to be pervasive on the Internet. 

An industry-led solution is needed, but it will take coordination from the copyright 

owners, the consumer electronics industry and the software manufacturers in order 

to be successful. Collectively, they have the technology and ability to confront the 

infringement of copyrighted material on P2P networks. If a unified solution is not 

brought forward soon, or no consensus can be reached, I have no doubt Congress 

will be forced to pass legislation that is ‘‘least flawed’’ to address this problem. 

As we begin this journey, I encourage this subcommittee to hear testimony from 

additional witnesses, including content holders, software manufacturers and the 

consumer electronics industry. Their involvement is very important if we are to curtail piracy. I want to work with Chairman Coble and the next chairman of this committee on H.R. 5211 and any other bill that provide the tools necessary for fighting 

piracy that we can all embrace. H.R. 5211 will help to focus the attention of the 

members of this subcommittee and an issue that is spiraling out of control. 

I thank the Chairman for scheduling this hearing today and look forward to the 

testimony of this distinguished panel of witnesses.

13

Mr. COBLE. I thank the gentleman. 

The Chair is pleased to recognize the distinguished gentleman 

from Massachusetts. 

Mr. DELAHUNT. I don’t have an opening statement, Mr. Chairman. But let me join the others that have appropriately sung your 

praises. 

As my friend Zoe Lofgren indicated, I think her reference was an 

island of bipartisanship in a sea of controversy. Oh, how eloquent 

and poetic and true. 

You have earned the respect, the admiration, and the friendship 

of all of us who have served on this Subcommittee. 

Mr. COBLE. You all are making an old man feel mighty good this 

morning. Thank you, Bill. 

And I notice most of my accolades are coming from the Democrat 

side, not the Republican side. [Laughter.] 

Mr. DELAHUNT. That’s why we call it an island of bipartisan. 

[Laughter.] 

Mr. COBLE. I thank you, Mr. Delahunt, very much. 

Mr. ISSA. Howard, we know you’re not going anywhere. You’re 

just ending your Chair. We kind of figure we’ll still have you 

around to sing your praises. 

Mr. COBLE. Oh, very well. [Laughter.] 

The gentleman from Florida. 

Mr. KELLER. Thank you, Mr. Chairman. I, too, join in appreciation of your good work as the Chairman. 

I think there is unanimity in the concept that stealing is bad and 

there should be consequences. But as a practical matter, other than 

this self-help bill that Mr. Berman has drafted, I’d like to hear 

what the solutions are from the witnesses. And when I say the solution, just a practical solution, not legal mumbo-jumbo because 

this is the way I as a layman see it: Universal wants to put out 

the new Celine Dion CD, let’s say. So they ship the CD off to radio 

stations 4 months in advance to promote their best single, what 

they perceive to be their best single. I think it was called ‘‘A New 

Day.’’ And some college student, an 18-year-old kid, at one of these 

radio stations borrows that CD for the night and puts it upon the 

Internet, brings it back the next day. And so 4 months before this 

CD is released, it’s available on the Internet for free. 

The question is, what do we do here? What’s the remedy? 

Well, criminal enforcement has been mentioned in some of your 

statements. We can ask Ashcroft or our local prosecuting attorney 

to do something about it. And they’ll probably that they’re sure 

sensitive to this but they have murders and terrorists and Mafia 

kingpins and drug lords that they have to prosecute with their precious dollars. Civil enforcement has been mentioned as a second 

remedy. They could hire a Sullivan & Cromwell and spend 

$200,000 and get a judgment against this kid, and he certainly has 

no money to pay it. So that’s money down the drain. 

It would probably be a PR nightmare for Celine Dion to go after 

this little kid. 

There’s the use of licensed services that are legal. Well, that’s a 

great concept, I think. But why would people pay $20 a month 

when they can get it for free over the Internet? 

14

The fourth thing, maybe Congress should come up with some 

technological solution for the industry. There are a lot of smart 

guys around here, but I don’t know how many Ph.D.s we have who 

spend their free time coming up with secretive, complicated 

encryption devices that are going to work. 

I wish Lindsey were here, because he’s fond of saying that he got 

800 on his SATs and he’s one of the smart ones here in Congress. 

[Laughter.] 

So we’re left with technological self-help measures. And that to 

me is about what you’re left with. And if that’s not the solution, 

then please tell me, as a practical matter, what is the solution, in 

your testimony, because I can’t see any other solution. 

So thank you for coming here today. 

Mr. BERMAN. Would the gentleman yield? 

Mr. KELLER. Yes, I’d be happy to. 

Mr. BERMAN. I was just curious why you thought you could get 

that firm to get that judgment for $200,000. 

Mr. KELLER. I know that’s cheap, for any of the firms. I don’t 

want to do promotion for them. 

But please advise me on the practical solutions, because I’m certainly interested. 

Mr. Chairman, I’ll yield back. 

Mr. COBLE. I appreciate that. 

I’m told that we have a vote on, but I think I can recognize—— Mr. BERMAN. That’s just the warning. 

Mr. COBLE. I stand corrected. 

The other gentleman from Florida, Mr. Wexler. 

Mr. WEXLER. Thank you, Mr. Chairman. I would like to join in 

the chorus of people who have applauded the way in which you 

have conducted yourself as Chairman of this Subcommittee. Your 

evenhandedness and decency and fairness is all too uncommon in 

this process. And it has been a great honor to be a part of your 

Subcommittee. 

With your permission, Mr. Chairman, I would like to use my 

time for a brief demonstration. 

Mr. COBLE. Without objection, that will be done. And thank you 

for your comments, Mr. Wexler. 

Mr. WEXLER. Thank you. 

Before the issue of peer-to-peer piracy came up, I for one had 

never heard of peer-to-peer networks or MP3 files. And I thought 

it might be helpful to walk the Subcommittee through a demonstration of just how easy it is to download pirated music from 

these peer-to-peer networks. And the Members, if they wish, can 

follow on the screen. 

Once someone downloads a peer-to-peer program like KaZaA, 

downloading pirated music is as easy as surfing the Internet. This 

search you are watching was taped two nights ago. The reason this 

demonstration had to be taped is that the House of Representatives 

has a firewall to prevent peer-to-peer network activity because 

these networks are too risky for security and piracy reasons to be 

considered safe for use on House computers. 

So as you can see on the bottom right-hand corner of your screen 

there, this search is a recording from Tuesday night at 8:23 p.m. 

All you have to do to steal copyrighted material is click the search 

15

button and type in the name of the song or movie you want to 

download. 

Since we have a copyright owner testifying before this panel this 

morning, we searched for the song that Mr. Galdston wrote for 

Vanessa Williams, ‘‘Save the Best for Last.’’ We just type in 

‘‘Vanessa Williams,’’ ‘‘Save the Best for Last.’’ All of these hits come 

up. Each one of these lines is an MP3 file that has been uploaded 

to the peer-to-peer network without the permission of Mr. 

Galdston. And if Mr. Galdston will forgive us, we can just doubleclick any of these titles to download the song onto that computer 

right there. 

While we wait for the song to finish, let me point out, as you can 

see on the bottom of the screen, when we recorded this demonstration, we weren’t the only ones. Almost 3 million users were online 

stealing music, so-called sharing, almost 500 million individual 

files. This is just an ordinary Tuesday night in America on one of 

the many popular peer-to-peer networks. It is mind-boggling to realize that tens of millions of songs are being stolen every night in 

America. 

In only a few seconds we were able to steal the property of Mr. 

Galdston. We have a copy of the song as an MP3 file at near-CD 

quality. We can burn it onto a CD with other downloaded songs or 

share it on other peer-to-peer networks ourselves. 

Anyone can download music and movies. It’s easy. Sharing music 

and movies on peer-to-peer networks appears to have no negative 

consequences. You can get the entertainment you want for free and 

it seem harmless enough. Not so. 

Mr. Galdston and all the other songwriters and musicians who 

make their living writing and recording music get hurt. Without 

the income from their copyrighted property, many musicians will 

not be able to continue creating the music we love to listen to, and 

we will lose this important American business. We will lose this integral part of American culture as well. 

And the impact is felt by more than just the copyright owners. 

Local music and movie stores are facing dramatic drops in sales. 

With the economy as it is, we cannot afford do allow peer-to-peer 

theft to cripple the American economy or to stunt the development 

of new music and movies. 

As you can see on the chart next to the screen, 2.6 billion—billion—songs are downloaded every month. KaZaA brags on its own 

Web site—this is KaZaA—that over 120 million users have 

downloaded its software. 

And the problem is not limited to songs. Between 12 and 18 million movies are downloaded from peer-to-peer networks each month 

as well. 

One-half of all teenagers in America have downloaded music for 

free, with two-thirds of them saying they buy less music now that 

they can essentially steal it over the Internet so easily. 

I am a sponsor of Mr. Berman’s bill because given the severity 

and magnitude of the problem, we are left with no choice but to 

take action. Every one of these 2.6 billion downloads per month is 

a theft no different than going into a store and putting into you bag 

and walking out without paying. 

16

We cannot realistically expect the criminal justice system to 

prosecute these cases. We need the Berman bill so that the copyright owners can protect their property themselves, just as individuals are allowed to protect their possessions from theft. 

Thank you, Mr. Chairman, your indulgence. 

Mr. COBLE. I thank the gentleman from Florida. 

Mr. GOODLATTE. Will the gentleman yield? 

Mr. COBLE. The gentleman’s time has expired. We’ll get to this 

in a minute. 

The other gentleman from Massachusetts, Mr. Meehan. 

Mr. MEEHAN. Thank you, Mr. Chairman. And I, too, want to join 

my colleagues in thanking and congratulating you for your outstanding service to this Committee. Today is really ‘‘Howard Coble 

Day’’ in the House of Representatives. And I thank you for your 

outstanding leadership. 

I also want to thank the Chairman for calling this hearing, as 

well as Congressman Berman, for taking the lead on the issue of 

peer-to-peer piracy. 

Peer-to-peer piracy is theft, period. The illegal downloads of free 

music, which we’ve just seen demonstrated, of music software, movies from an Internet site, is really no different than lifting a CD 

or a DVD off the shelves of a Best Buy. And when you have two 

identical products—one that is free that you can download, as millions and millions of Americans apparently are, and then you have 

another one that has a price tag—obviously, free wins every time. 

And throughout all of the debate over this issue, I’ve yet to hear 

a single person dispute those simple facts. Instead of admitting 

those basic facts and trying to find a common solution, we have 

seen a whirlwind of charges hurled at the Chairman and Congressman Berman. In fact, I’ve rarely seen the amount of vitriol, unsubstantiated charges surrounding a piece of legislation as I’ve have 

with Congressman Berman’s bill. And it kind of makes me wonder: 

Has anyone really read this bill? 

If your goal is to preserve peer-to-peer piracy, then just come out 

and admit it. If at heart you simply don’t believe in intellectual 

property, then just say so. 

I agree that the content provider community has been too slow 

in finding ways to offer their products digitally. And I’m willing 

and eager to listen to amendments to this legislation. Certainly, no 

bill is perfect. But if you have a good-faith, reasonable alternatives, 

then I’m more than willing to hear them. But we have to take a 

first step, if we believe in American music and believe in American 

entertainment. 

I mean no offense to countries with weak intellectual property 

laws, but I would much prefer to watch a movie from Hollywood 

than average fare from Taiwan. 

This bill is a good first step toward stopping a very serious problem. 

Thank you, Mr. Chairman. 

Mr. COBLE. Thank you, Mr. Meehan. And thank you for your 

kind words as well. 

The gentlelady from Wisconsin. 

17

Ms. BALDWIN. Thank you, Mr. Chairman. I, too, would like to acknowledge the good humor and graciousness with which you have 

chaired this Committee and your very capable stewardship. 

Times have certainly changed since I had my cassette tape recorder sitting beside my radio, and I sat beside both, ready to dash 

to the record button when my favorite song came on. 

In acknowledging the challenges faced by the industries represented at the hearing today, I know that we are truly searching 

for constructive answers. I look forward to the testimony and joining the Committee Members in fashioning the appropriate solutions. 

Mr. COBLE. I thank the gentlelady. 

The gentleman from New York. 

Mr. WEINER. Thank you, Mr. Chairman. I want to join in the accolades being paid to you. And I also find it unusual that no one 

has commented on your exotic, Southern, I guess it’s Staten Island 

accent that you govern this Committee with. [Laughter.] 

And I want to thank you for how well you have conducted these 

hearings. 

At the same time that many of us have reached the conclusion 

that the best policy for Government to take in the explosion of the 

Internet was probably to take a few steps back and to allow some 

of the technological problems, some of the content problems that 

troubled folks, to be worked out by the marketplace, worked out by 

technological solutions, we’ve seen a certain level of schizophrenia 

about this problem. At the same time that music companies and 

producers are trying to figure out ways to stop this pirating of intellectual property, just about every day in the newspaper or on television you see hardware makers advertising that their products 

will make it easier for you to break the law. 

When you have an iPod advertised that you can have 3,000 

songs, rip it, zip it, and go, or something like that, you know, it 

is clear that, on one hand, technology is working to make it easier 

to commit these crimes, to make it easier to commit piracy. When 

you have that dopey guy from Dell telling you how great the system is. It lets you go to campuses and how it can download faster 

than any previous technology. And then you see in super-microscopic print, ‘‘Please be sure to observe all the copyright laws of the 

land,’’ in the tiniest of print in print ads, and it zips across the 

screen in the TV ads. It is clear that there is an intramural battle 

going on in the technology community. 

And frankly, I think we in Government can no longer step to the 

sidelines. 

At the same time, music companies have tried to give consumers 

what they what and, frankly, have done a crummy job. You know, 

I signed up for Pressplay a couple months ago, and the thing was 

loading and loading. And it has this icon that goes around that 

says, ‘‘Please wait while we load the program.’’ And it was going 

for hours and hours. And finally, I called someone to find out what 

was going on, and they said, ‘‘Oh, you have Netscape. We don’t 

work with that browser.’’

It is getting better. But at the same time the music companies 

are coming out with improved products to help consumers, Morpheus has another version out, KaZaA has a better version out. I 

18

mean, there is a battle going on, a fullthroated battle going on not 

only between technologies but even within technology companies. I 

mean, if you have Sony who makes the computers and the 

downloaders and the minidisk players, and they’re also producing 

music, it is not even clear the companies are on the same page 

about how to deal with this problem. 

I have to confess that when I first heard about Mr. Berman’s bill, 

I was, like, that’s tough stuff, that I’m going to go and somebody 

is going to be scouring these peer-to-peer transactions and saying, 

‘‘I don’t like this guy. I’m going in there, and I’m going to stop this 

from happening.’’ But I think it is evidence that I think the panel 

and those that listen to this hearing, it should be very clear that 

Congress is not going to sit in watch this go on much longer. 

And I agree with, I believe it was Mr. Meehan, who said that no 

one has made a good argument to me about why this should be allowed to continue. No one has made a good argument to me about 

why my good friend Britney Spears is wrong, that you can’t just 

go into a record store and grab what you like and say, ‘‘Well, the 

other 12 songs are crummy, so I’m going to grab this CD anyway.’’ You know, I believe that the industry obviously has to give consumers what they want. But I think it clear, whether you believe 

in the line-by-line explanation of the Mr. Berman’s bill, it is clear 

that he reflects the sentiment of Congress and, frankly, I think of 

all moral American consumers that we cannot allow this pilfering 

to continue unabated. 

I yield back the balance of my time. 

Mr. COBLE. I thank the gentleman from New York. 

And we’ve been joined by the gentlelady from Pennsylvania, who 

tells me she has no opening statement. 

I thank the Members for your opening statements. I appreciate 

that. 

And now we will get to the business at hand. Our first witness 

is Ms. Hilary Rosen, who is the chairman and chief executive officer of the Recording Industry Association of America, popularly 

known as RIAA, the trade group representing the U.S. sound recording industry. She was named president and CEO of RIAA in 

January 1998 having been with the organization for more than 11 

years. Prior to joining the RIAA, Ms. Rosen operated her own consulting firm. She holds a bachelor’s degree in international business from the George Washington University. 

And by the way, folks, pardon my gravelly voice, but I am coming 

down with my annual autumn cold, so I know it sounds not favorable. 

Our next witness is Ms. Gigi Sohn, who is the president and cofounder of Public Knowledge, a new nonprofit organization that 

will address the public’s stake in the convergence of communications policy and intellectual property law. Ms. Sohn also served as 

executive director of the Media Access Project, a Washington-based 

public interest telecommunications law firm. Ms. Sohn holds a B.S. 

degree in broadcasting in film, summa cum laude, from the Boston 

University College of Communications and a J.D. from the University of Pennsylvania School of Law. 

Our next witness will be Mr. Phil Galdston, who is a songwriterproducer whose work has appeared on over 60 million records 

19

worldwide, in countless motion pictures, and on recordings by several famous artists. His song ‘‘Save the Best for Last,’’ recorded by 

Vanessa Williams, simultaneously reached number one on Billboard’s three major charts, and received four Grammy nominations, including song and record of the year. 

Our final witness today is Mr. Randy Saaf, who is president and 

chief executive officer of MediaDefender Inc., makers of Internet 

and peer-to-peer anti-piracy software. Mr. Saaf attended the Harvey Mudd College School of Engineering in Claremont, California, 

and worked in software development at Raytheon Systems. At 

Raytheon, he helped to create more cost-effective solutions for developing radar software for the F–15 fighter jets. 

It’s good to have all of you with us. We have your written statements. They have been examined and will be reexamined, I assure 

you. 

Again, folks—Hilary, you know this. You’ve been here before. I’m 

not sure the others have. But we would appreciate your confining 

your statement to the 5-minute rule, if you will. And you will know 

your time has expired when the red light before you illuminates 

into your eyes. [Laughter.] 

Ms. Rosen, why don’t we start with you? 

STATEMENT OF HILARY ROSEN, CHAIRMAN AND CHIEF EXECUTIVE OFFICER, RECORDING INDUSTRY ASSOCIATION OF 

AMERICA 

Ms. ROSEN. Thank you, Mr. Chairman. And I’ll submit my record 

statement for the record. 

I have to join your colleagues, if I might, and add my personal 

and certainly our industry’s respect and appreciation for your 

chairmanship. I think there are few legacies in this Congress, in 

many Congresses, that will match yours. 

Mr. COBLE. Ms. Rosen, we may have to give you 10 minutes. 

[Laughter.] 

Thank you, Ms. Rosen. I appreciate it. 

Ms. ROSEN. The breadth of the creative output that results from 

the work that you’ve done coupled with I think the real balance 

you’ve achieved and strove for in technological innovation I think 

most importantly serves the public interest on all fronts. And I 

think the public has never been more satiated with creative works 

and the U.S. economy has never benefited more. 

Congressman Berman, thank you for introducing this bill and 

stimulating this hearing on this extraordinary important problem. 

America’s copyright industries, it’s always appropriate to remind 

this Committee and the public at large, account for over 5 percent 

of our Nation’s GDP. Over the last 25 years, these copyrighted industries have grown at twice the rate of any other American industry, responsible for over 5 million jobs, provided the most favorable 

balance of trade to the U.S. economy than any other single industry, outpacing aerospace and agriculture in that regard. 

The policies of this Committee to date have been responsible for 

that growth, and I urge you to continue that strong leadership. 

Music is this first in this online piracy problem. Everybody 

knows it. We’re getting a lot of attention lately, but every other 

copyright work, from needlepoint to books to film to software, will 

20

be where are shortly, if we don’t all pay more attention to this, because the economic engine that has driven these industries is at 

risk. 

New business models in the legitimate online music market cannot compete. They are urgently threatened with the exponential 

growth of illegal piracy on peer-to-peer networks. The networks 

certainly impact equally on the security and safety of the users’

own computers and their own private information, and that is in 

no way an indictment of the network itself. They’re perfectly legal. 

It is the use of the networks that are most at risk. That certainly 

doesn’t dissuade anyone from the notion that the concept of P2P 

and distributive computing has enormous commercial potential and 

enormous potential for consumers. 

Finally, there really is no easy solution. There’s no single bullet, 

as Mr. Keller sought. Frankly, I’m not even here to blame anyone, 

other than perhaps the network providers themselves who know 

exactly what they have created in order to profit on it. 

Rather, self-help in the music business has been our internal 

mantra of late. And we have looked at that self-help in four different ways. 

The first is business strategies. There is no substitute for giving 

consumers what they want. The record industry, it has been repeated multiple times, was slow to get there. But now there are legitimate services up and available. They clearly don’t have as much 

music as the pirate services, because they don’t have to worry 

about finding copyright owners to make sure that they get paid and 

are licensed. But they’re there. And in fact, they are growing, and 

they’re good music experiences today. They’ll be better music experiences in several months. There are download services available 

now and already have been announced for significantly low prices; 

you know, less than a dollar a single. I think that that record of 

licensing over the last year speaks for itself. 

The second strategy really are technical measures. We have to 

look at things like spoofing. The New York Times yesterday gave 

credit to spoofing for spurring the development of the legitimate 

marketplace, exactly what this Committee and what everybody 

should want to achieve. 

Unfortunately, this week, we saw this announcement, that 

Sharman Networks in their new KaZaA download has decided that 

they’re going to hamper spoofing. They can get away with technical 

measures against us, but all of this public outcry about technical 

measures to support ourselves. 

So spoofing has been effective, but it is at risk. Because of this, 

we have to be able to keep up. 

The second, obviously, is enforcement. I strongly believe the Federal Government has a role in enforcing criminal penalties. And 

the NET Act was an important step. The Justice Department has 

already announced their intention to be more aggressive in this 

area. They recognize the national economic threat, the national security threat. And we applaud that action. 

On the civil enforcement side, we’ve taken a lot of self-help. We 

have been very aggressive, spent a lot of money, and sued a lot of 

networks. Those suits have generally been successful. The problem 

21

is, there are just too many to consistently sue, and people have to 

understand that burden. 

And finally, public education. We’ve done a lot of research over 

the last couple of months about consumers and attitudes and views 

about this practice and its impact on the marketplace and what 

consumers really need to hear. Since so much of the growth in 

peer-to-peer network use has been in the 12- to 18-year-old category—in fact, 18- to 30-year-olds, the activity has generally been 

about the same in the last 2 years. What we’re seeing is tremendous growth in the 12- to 18-year-old. That means, as parents buy 

broadband and DSL and cable online services for their house, their 

kids are using that to go upstairs and steal music. 

What people really wanted to know is, is it legal or not? And the 

courts have spoken: It’s not legal. 

What the music community has done this week is launch a public education campaign based on that specific area of education. We 

are telling people what their rights are. We’re encouraging people 

to think about what playing fair is. And we’re telling them when 

their behavior is illegal. 

And this newspaper ad appears today in several national newspapers. It says, ‘‘Who really cares about illegal downloading?’’ And 

it’s signed by 90 artists, most famous but some not so famous. The 

famous artists obviously trying to send the message on behalf of 

those young artists and coming-up artists that there is a long-term 

concern for the music community. 

There is a Web site, MusicUnited.org. And this effort has 

brought together every single significant organization in the music 

community, many of whom this Committee has seen fighting 

among ourselves every day of the week on other issues. This issue 

unites us. 

So I encourage people to take a look at this campaign over the 

next several weeks. You will have seen small retailers talk about 

this problem. You will see economists talk about this problem. 

You’ll hear songwriters and fans talk about this problem. This is 

a serious problem, and this Committee bringing this problem to the 

public’s attention is enormously important, so thank you very much 

for today’s hearing. 

[The prepared statement of Ms. Rosen follows:]

PREPARED STATEMENT OF HILARY ROSEN

Mr. Chairman, Representative Berman, and Members of the Subcommittee, I 

want to thank you for holding this important hearing today. This is the first hearing 

Congress has held to specifically examine the effects of copyright theft over peerto-peer networks on the Internet. 

And as a representative of the industry that has been so far the hardest hit by 

this enormous problem, I am deeply grateful to this Subcommittee for taking the 

lead in focusing on what is becoming an epidemic for the American economy and 

culture. 

Just to give you an idea of the amount of copying that is occurring on unlicensed, 

free peer-to-peer systems—the most popular network, KaZaA, boasts on its site that 

its file-sharing software has been downloaded more than 120 million times. It is estimated that more than 2.6 billion files are copied every month—and no creator, no 

property owner is compensated for these copies. 

I wish I could tell you that there is a silver bullet that could resolve this very 

serious problem. There is not. The answer resides in a combination of efforts that 

must be undertaken at the same time: 1) extensive public education about the illegality of file-sharing; 2) the widespread availability of licensed services that consumers desire; 3) criminal and civil enforcement; and 4) technological self-help 

22

measures that prevent illegal copying and make it less desirable. These are all essential parts of assuring the vitality of our copyright system and the incentive to 

create new works. 

We begin with education. Polls show that many Americans still do not know that 

downloading an artist’s song on one of these unlicensed services is unlawful. And 

the message is clear—taking music on the Internet is no different than taking it 

from a store. The law protecting the right to reproduce a creative work applies on 

the Internet in the same manner in applies to sales of illegally made CDs on the 

street. 

I want to emphasize that technology is not the enemy. Peer-to-peer technology 

holds amazing promise for creators and consumers to experience entertainment and 

to communicate in ways never before available. It is the misuse of technology—em- ploying it to deprive compensation to creators—that must be tackled. 

For the past two years, record companies have been working with download sites 

and new subscription services to create a legitimate alternative to piracy networks. 

There now exist dozens of places on the Internet to download authorized music and 

a dozen new competing on-demand monthly subscription services, all of which pay 

the creators. They are not yet perfect. In the legitimate world, it takes time to negotiate licenses in the free marketplace, to develop secure encryption and digital rights 

management systems, to negotiate with all rights holders, to develop new royalty 

payment systems, and to organize and digitize for new delivery our vast music catalogs. Pirate systems face none of these obstacles. While in Internet time it may seem 

like an eternity, in only three years we are well on our way to transforming an entire industry. 

Enforcement of creators’ rights is another key component. I want to thank all of 

the Members of this Subcommittee who signed a letter to the Department of Justice 

urging that they prosecute those who create systems intentionally developed to enable theft, and to prosecute those who intentionally steal through peer-to-peer services. And we applaud the Department for its recent announcement explaining that 

theft on these systems is no different than theft through a different medium—and 

that they will prosecute copyright crimes on peer-to-peer networks. In addition, in 

the civil courts, we have brought suit against the most popular peer-to-peer services 

for mass copyright infringement. We are pleased that the courts have ruled that 

services such as Napster and Aimster must be held accountable. The Judge in the 

Aimster case recently summed it up best when it said that Aimster ‘‘managed to 

do everything but actually steal the music off the store shelf and hand it to [its] 

users.’’ We are hopeful that the courts will come to the same conclusion in the case 

we have filed, along with the movie studios and the music publishers, against 

KaZaA, Morpheus and Grokster. Enforcement alone, however, is not enough. We 

must be able to technologically prevent the illegal downloading of our creations over 

these systems. 

That is why I also want to thank Representative Berman and cosponsors for introducing a bill that is intended to level the technological playing field by assuring that 

copyright owners can take preventive measures that will deny the downloading of 

their works when it is not authorized—without invading a user’s privacy or damaging a user’s computer or network. 

An example of why it is so important to give copyright owners the ability to defend themselves with the same technological measures used by pirates to encourage 

theft came just this week when KaZaA announced that it was giving its users ‘‘better options and more tools than ever before . . . include[ing] a filter to help users 

avoid . . . misnamed or incomplete files that may have been uploaded by record labels and copyright owners trying to frustrate file sharing.’ It is truly ironic that we 

can be stopped from trying to protect ourselves against unlawful copying by technology, but using technology to prevent unlawful use is met with a firestorm of controversy. It is also ironic that KaZaA can employ a filter to avoid spoofed files, but 

not to filter out copyrighted works to which they have no right. 

Unfortunately, there has been a lot of misinformation about this bill. Some have 

characterized it as allowing copyright vigilantism, or letting record companies and 

movie studios hack into people’s computers, and crash networks. These irresponsible 

descriptions at best reveal a misunderstanding of the text and purpose of the bill, 

and at worst purposely cloud the real issues and problems with unlicensed peer-topeer networks. It is the use of a peer-to-peer system that opens up a user’s hard 

drive to the rest of the world, not the Berman bill. It is the current practice of those 

who have created today’s unlicensed peer-to-peer systems that invade a consumer’s 

privacy through spyware and the selling of consumer information, not the Berman 

bill. In fact, the bill prevents these activities, along with hacking, deleting or altering material, and causing damage to a computer. We support these prohibitions and 

other solutions to assure that all privacy and damage concerns are addressed. But 

23

we ask that those who share these concerns with us help us to come up with real 

solutions that also curtail massive piracy over these networks. 

The intent of the bill, it seems to us, is simply to allow a copyright owner to prevent the initial downloading on a peer-to-peer system of specifically identified material that it owns. An analogy might be a U.S. Coast Guard boat that is out in the 

sea preventing unlawful goods from entering the United States. It is not doing damage to the sender or the intended recipient, it is not boarding any other boats, or 

initiating any harm. It is simply acting in a defensive manner to block admission 

and to deny an illegal transfer. In our opinion, this preventive activity is warranted 

and necessary. 

Many of these types of activities are already allowed under current law, and copyright owners are availing themselves of their rights to protect their works. But some 

laws that were written at a time when peer-to-peer networks were not even contemplated have created some unintended confusion and ambiguity. It is sort of like 

a statute that was written to protect bank statements in the 1950s being applied 

to measures utilized to protect ATMs today. The Berman bill will clear up any uncertainty in both the application of current law and the respect that copyright owners must and should have for the integrity of networks and an end user’s privacy. 

We, like others, have many questions about the application, scope and exposure 

to copyright owners in the bill. But we are committed to working with the Subcommittee to resolve these questions and to work with those who have raised other 

legitimate concerns. 

And we are also committed to working with all parties who have a stake in creating a legitimate digital marketplace that will continue to make possible the gifts 

that music has brought to listeners around the world. 

I would like to close, Mr. Chairman, by noting that, because of term limits, this 

may be the last time that our industry has a chance to formally appear before you 

as Chairman of this Subcommittee. To call your tenure as Chairman extraordinary 

in the formation of modern copyright law would be a gross understatement. Your 

leadership is responsible for future creations that we have not even imagined. And 

your legacy is appreciated by all of us who are involved in the creative arts. We 

salute you and thank you.

Mr. COBLE. Thank you, Ms. Rosen. And thank you for your generous comments as well. 

With a sense of fairness, Ms. Rosen consumed 7 minutes, so I 

will allot each of you 7 minutes as well. 

So, Ms. Sohn? 

STATEMENT OF GIGI SOHN, PRESIDENT, PUBLIC KNOWLEDGE 

Ms. SOHN. Thank you, Chairman Coble, Congressman Berman. 

Mr. COBLE. If you will suspend, Ms. Sohn, you don’t have to use 

7, but you may use 7. [Laughter.] 

Ms. SOHN. I think I probably will. 

Thank you, Chairman Coble, Congressman Berman, and the 

Members of the Subcommittee for holding this very important 

hearing. I am honored that you’ve chosen me and my organization 

to represent the consumer perspective on P2P networks. 

We share your concern about massive illegal file sharing over 

P2P networks. We condemn such actions and favor targeted mechanisms to limit them. I emphasize the word ‘‘targeted.’’ We cannot 

support laws or technological measures that harm legal uses of 

computers and the Internet. 

Unfortunately, H.R. 5211 is not a targeted measure. We recognize and appreciate the good intentions of Congressman Berman 

and the other co-sponsors in attempting to limit unlawful file sharing over P2P networks. But this bill would permit copyright owners 

to employ self-help technological measures at the expense of all 

Internet users, whether or not they’re engaging in illegal activity 

and whether or not they’re using the type of P2P networks that are 

the purported subject of this bill. It is especially troubling that 

24

these measures can be employed secretly without any notice to the 

affected consumer as to who is engaging in self-help or why. 

Let me tell you what concerns us. One technique, interdiction, involves a program robot, or bot, that repeatedly requests an allegedly infringing file a P2P user, making her hard drive inaccessible. 

Sounds benign? Well, what if the bot is just wrong about whether 

a file is illegal? 

The content industries say that their bots are accurate. But 

when Warner Brothers twice asked an ISP to disable access for a 

file trader that had a 1k file named ‘‘harry potter book report.rtf,’’

did it really believe that such a small text file was anything but 

a child’s homework? 

And remember, the rights in this bill redound to all copyright 

owners. So while the content industries may have the means to use 

more expensive and accurate self-help, others will use whatever 

homebrewed tactics they can afford. 

And what if these or other future self-help techniques result in 

file trader’s computer crashing or her Internet service becoming unavailable? Regardless of whether an individual has an infringing 

file, denial of service caused by self-help will burden ISPs and 

other network users. Every denial of service claim requires ISP 

time and resources to figure out its source, causing it to spend less 

time on other more serious service problems. 

Moreover, denial of service attacks on ISP networks using shared 

architecture could directly affect the service quality of other ISP 

customers. 

The anti-consumer effects of this bill do end there, unfortunately. 

Even in the unlikely event that an innocent victim of self-help can 

figure out who among the millions of copyright owners is responsible, the bill erects economic and procedural barriers to seeking relief in the courts. This is true even the when the copyright owner’s 

actions are the most egregious. 

These obstacles and the broad authorization granted to copyright 

owners under this bill shift the burden of using self-help away from 

the content industries and places it squarely on the backs of consumers. 

What H.R. 5211 could sanction is a virtual Wild West. Attacks 

on hard drives will likely provoke retaliation by some users and the 

acquisition of defensive software by others. The collective impact of 

all these efforts might be to reduce or eliminate the effectiveness 

of the Internet and delay the rollout of broadband. 

So if H.R. 5211 is not the right answer, what is? I recommend 

four solutions, all of which are currently available to content industry. 

One, enforce existing laws. This is the ultimate self-help technique. We are not aware of one case in which the recording industry has taken legal action against an individual downloader. The 

problem is that the industry apparently does not want to enforce 

the law when it comes to illegal file trading because it looks bad 

to sue its own customers. But it’s not Congress’ job to protect any 

industry from negative public relations. 

Two, employ noninvasive self-help. We support the use of selfhelp techniques that are activated by an individual’s affirmative efVerDate Jan 17 2002 09:45 Nov 05, 2002 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6601 G:\WORK\COURTS\092602\81896.000 HJUD1 PsN: 81896
25

fort to obtain an unlicensed copy of a file, including spoofing, flooding, decoy, and redirection. 

Three, promote competition to build a new business model. There 

appears to be a growing consensus that online music services that 

provide easy access to a wide range of high-quality content at a fair 

price can compete with free. The New York Times reported yesterday that more and more file traders are using legal online music 

services in part because file sharing is, in the words of one convert, 

a dreadful experience. In fact, Jupiter Research predicts that by 

2006, the industry will reap more than $1 billion from these services. Forrester Research puts that estimate at $2 billion. 

But more can be done to expedite a better business model for 

selling music online. One way is for the recording industry to give 

others the opportunity to sell music online, not for free. The record 

companies could license their music to online retailers and ask for 

the same statutory rate that the publisher gets for each song sold. 

This is a win-win situation. The copyright owner gets paid, and 

a competition ensues to build a viable online music service. The 

Music Online Competition Act, which is currently pending before 

you, is an important step in the direction of increasing competition 

in the lawful delivery of online music. 

Four, educate the public about digital copyright. I applaud the 

recording industry on the educational campaign it has started 

today. The content industries have some of the world’s biggest and 

best public relations capabilities. They should use them to give the 

public truthful information about what is legal and illegal in a digital world. 

I want to again thank Chairman Coble, Congressman Berman, 

and the Members of the Subcommittee. As the sole representative 

of citizens’ rights at this hearing, I respectfully ask that you keep 

the record open for 30 days to permit others to submit testimony 

and comments. 

[The prepared statement of Ms. Sohn follows:]

PREPARED STATEMENT OF GIGI B. SOHN

Chairman Coble, Congressman Berman and other members of the Subcommittee, 

my name is Gigi B. Sohn. I am the President of Public Knowledge, a new nonprofit 

public interest organization that seeks to ensure that citizens have access to a robust public domain, an open Internet and flexible digital technology. 

I want to thank the Subcommittee for holding this important hearing on the great 

promise of peer-to-peer (P2P) networks and some of the perils associated with their 

use. I am honored that you have chosen my organization to represent the citizen/

consumer perspective at this hearing. [1] 

My hope is that this hearing will further advance the dialogue that Public Knowledge and other public interest organizations have already begun with the various 

interested industries and with policymakers. That dialogue is intended to find solutions that provide the content industry with a ‘‘reasonably secure’’ digital environment for its content while ensuring that citizens retain their rights under copyright 

law and continue to have access to an open Internet and the kind of flexible technology that they have come to expect and enjoy. 

P2P TECHNOLOGY IS CHANGING THE FACE OF COMPUTING—FOR THE BETTER

In just two years, P2P has become a computing phenomenon. Millions of Internet 

users are communicating with each other through P2P file sharing software programs that allow a group of computer users to share text, audio and video files 

stored on each other’s computers. While the P2P applications we know today are 

just a few years old, the technology underlying P2P is at the heart of the Internet. 

26

The Internet was designed to be a distributed system of linked computers in which 

users could freely share content and data stored on each other’s computers. 

Few disagree that P2P networks are already changing the way businesses, educators, artists and ordinary citizens use their computers. In businesses, for example, 

they offer an alternative to centralized server-based sharing of documents and 

projects. [2] The vast majority of these changes are positive. By linking together individual computers and distributing their power, P2P technology is superior to the 

centralized server approach because it:

• is more robust and resilient

• is more cost effective

• is faster and more reliable

• harnesses bandwidth and storage resources that would otherwise go unused

• enables real-time collaborative work

Already, both public and private P2P networks are helping small and large businesses (including content companies), universities, artists and others work collaboratively and more efficiently. Here are some examples:

• The University of North Carolina at Chapel Hill. Robert Kirkpatrick, Distinguished Associate Professor of English and Director of the London Summer 

Honors Program at the University of North Carolina at Chapel Hill, used 

Groove Network’s P2P tools to manage a class in the composition of poetry. 

Among other things, Kirkpatrick used P2P technology to encourage collaborative editing and comment on students’ work, adjust the syllabus, archive 

course materials, and create a list of links to resources of poetic forms and 

vast archives of complete works of poems and critical writing. The class also 

uses the Groove tools for a class forum and an announcement board to share 

information on musical, dramatic and other events on campus. Kirkpatrick 

said that P2P technology ‘‘makes it possible to extend that most expensive 

form of education—one-on-one tutorial—into a cohesive class experience. . . . 

It comes very close to being, for me, the ideal academic tool.’’[3]

• CenterSpan. CenterSpan is a distributed content delivery network licensed to 

distribute copyrighted digital content from major media companies. Earlier 

this year, CenterSpan announced an agreement with Sony Music Entertainment whereby CenterSpan’s secure P2P network provides music from Sony 

Music artists to a wide variety of online service providers seeking to offer 

their subscribers streaming and downloadable music. [4]

• J!VE Media. J!VE Media is the creator of a suite of digital video packaging, 

digital rights management and media delivery services which enable content 

providers to distribute protected digital video content via publicly accessible 

P2P networks, including the Gnutella Network (which includes users of 

LimeWire and Morpheus) and the Fastrack Network (which includes users of 

KaZaA and Grokster). J!VE uses P2P distribution technology because it allows content owners to rely almost entirely on users to provide the most costly computing resources involved in digital distribution: data storage and 

bandwidth. J!VE distributes only authorized content, and its customers include: 1) the Priority Records division of the EMI Recorded Music Group; 2) 

Koch International, the world’s third largest independent music label; and 3) 

The Comedy Network, Canada’s 24 hour comedy cable channel. [5]

• Project Gutenberg. Project Gutenberg seeks to convert to ebook form, and 

widely distribute over the Internet, over 4500 works from the King James 

Bible to Shakespeare to the CIA World Fact Book. These works are either in 

the public domain or authorized by copyright owners for distribution. One of 

the chief hurdles facing Project Gutenberg and public domain projects like it 

has been the expense of hosting and distributing the resulting files. Today, 

these expenses are being reduced, and valuable public domain works are 

reaching more people, because these texts are being distributed over P2P networks. [6]

• Furthur Network. The Furthur Network is a non-commercial, open source, 

P2P network of legal live music. Music lovers download and share music from 

each other. Musicians that allow the non-commercial taping and trading of 

their live performances are allowed on this publicly accessible P2P network. 

This would include bands like the Grateful Dead, the Allman Brothers Band 

and the Dave Matthews Band. TDK, the consumer electronics and recordable 

media company has recently recognized the importance of this segment of the 

music industry by sponsoring the third annual Jammy Awards, which honors 

27

musicians who focus their art on live music. In the words of Bruce Youmans, 

TDK’s Vice President of Marketing, ‘‘There are literally hundreds of sources, 

including directly from some of the artists performing at the Jammys, for legally acquiring today’s best music without infringing on artists’ copyrights.’’[7]

All indications are that P2P technology will stimulate our economy if it is allowed 

to flourish. As with any successful new technology, innovators will seek to capitalize 

by developing new applications for P2P. [8] Moreover, since every computer on a P2P 

network becomes, in effect, a file server for every other computer, it is likely that 

businesses and individuals will demand faster and more powerful PC’s. Equally as 

important, many experts predict that increased use of P2P networks will drive up 

the demand for broadband. [9] It is not difficult to see why—using the increased 

bandwidth capabilities of a P2P network, a homeowner using only a DSL line could 

send files at a speed and capacity that is eight times faster than a T-1 line! 

LIKE OTHER TECHNOLOGIES, P2P CAN BE ABUSED

Despite the recognition of Congressman Berman and other legislators of the enormous promise of P2P networks, [10] the focus of this hearing is on their abuses—

that is, the illegal sharing of copyrighted material over these networks. Let me be 

clear—Public Knowledge does not condone the illegal sharing of files on any network—be it P2P or otherwise. We believe in the constitutional and historical purpose of copyright protection, that is, to encourage the creation of new artistic works 

for the ultimate benefit of the public. That purpose is not well served by individuals 

who engage in large scale illegal file trading. As discussed below, we think that the 

content industry has several avenues available to it to curb these abuses that will 

also preserve the technology and the rights and expectations of consumers and computer users. 

That being said, my fear is that the emphasis on the abuses of P2P networks may 

well give rise to actions that could ultimately destroy the promise of this technology. 

As discussed below, proposed laws like H.R. 5211 could lead to actions by copyright 

owners that could literally bring these and other networks to a sudden and unfortunate halt. Even where the copyright owner’s motives are the most benign, actions 

authorized by this bill could seriously tax these valuable networks by making them 

less efficient, more unstable, and subject to greater private control. That is not good 

for consumers, the tech industry or the content industry, which believes, as I do, 

that it will figure out how to harness P2P technology and profit. Thus, it is not just 

the illegal activity that might be slowed by the kinds of self help techniques authorized by this bill, but also every legitimate current and yet-to-be-developed business 

dependent upon the promise of P2P technology. 

P2P networks, like other technologies (e.g., cars, telephones) can be used for good, 

or they can be abused. But we don’t outlaw these technologies or limit their legitimate use because of the possibility (and yes, even the probability) that someone will 

use them to do harm. Public Knowledge supports targeted mechanisms to limit 

abuses of these networks. But we cannot support laws or technological measures 

that harm legitimate uses of the technology in the effort to curtail illegitimate ones. 

THE CONTENT INDUSTRY HAS TOOLS AT ITS DISPOSAL WHICH, IF USED TOGETHER, CAN

LIMIT THE IMPACT OF ILLEGAL FILE TRADING OVER P2P NETWORKS. 

Over the past several months, my staff and I have had a number of productive 

conversations with various sectors of the content industry. While we have not 

agreed on everything, I have appreciated their willingness to be candid and engage 

in a continuing dialogue. One thing the various sectors of the industry have been 

willing to admit is that infringement cannot be stopped completely. This is true with 

regards to physical infringement as well as virtual infringement. 

Thus, the critical question becomes: how can the effect of illegal file trading over 

the Internet be limited without eroding the legitimate consumer/computer user 

rights and expectations? I propose a combination of three tools: 

ENFORCEMENT OF EXISTING LAWS

Both the Copyright Act and the Digital Millennium Copyright Act provide for 

remedies for certain unlawful uses of copyrighted material. [11] There is little evidence and indeed, the content industries do not claim, that when the law is enforced 

it is ineffective. In fact, when the content industries choose to enforce their rights 

under these laws, like in the Napster, Audiogalaxy and Madster (aka ‘‘Aimster’’) 

cases, they have succeeded. 

28

Despite its claims that billions of songs have been illegally downloaded, we are 

not aware of a single case in which the recording industry has taken legal action 

against an individual downloader. The problem is that the recording industry apparently does not want to enforce the rights it claims when it comes to illegal P2P file 

trading because it looks bad to sue its own customers. Therefore, the industry has 

decided instead to shift that burden onto other corporations, and in particular, ISPs. 

As many of you know, the RIAA is seeking to force Verizon to hand over the names 

of its customers based solely on the RIAA’s allegations that those customers are engaging in infringing activity. Verizon, backed by civil liberties and other public interest organizations such as my own, has argued, among other things, that forcing 

ISPs simply to give copyright owners the names of their customers without a judicial determination that they may be engaged in any illegal conduct would violate 

the constitutionally mandated privacy and anonymity rights of their customers, and 

put ISPs in the untenable position of having to respond to the numerous identification requests that would inevitably result. 

Were Verizon and other ISPs to comply with such requests, the RIAA would be 

empowered to collect sufficient information with which to conduct investigations of 

potential defendants and engage in surveillance over a period of days or even years, 

choosing to sue the defendants presenting the worst facts and having profiles least 

likely to garner public or judicial sympathy. As is often said, bad facts make bad 

law. The RIAA plan appears to have no other purpose than to find the worst facts 

before seeking an interpretation of its legal rights. 

Verizon’s refusal to succumb to the RIAA’s request does not leave the industry 

without a remedy. It can bring a ‘‘John Doe’’ lawsuit against anonymous infringers 

and serve Verizon with a third-party subpoena pursuant to Fed. R. Civ. P. 45. Once 

the industry has satisfied a judge that its allegations of infringement have evidentiary support, Verizon (and other ISPs) will be required to make available those 

names. With ‘‘robot’’ technology that allows the industry to pinpoint the most egregious uploaders with some (but by all means not perfect, see discussion below) accuracy, the industry’s complaint that it would have to bring numerous expensive lawsuits rings hollow. Unless the industry wants to sue every person with a handful 

of infringing files on its hard drive, it has the economic and technological means 

to locate the kind of large scale alleged infringer that it would want to bring to 

court. 

An industry-initiated law suit against a large scale infringer could also have the 

benefit of serving as a deterrent to other bad actors. As we have seen in other contexts, specifically targeted lawsuits and other legal action can have a deterrent effect, and also educate the public as to what is legal. But if the industry refuses to 

bring targeted cases, we will only be left with unfounded complaints that the copyright law provides a ‘‘right without a remedy.’’ The remedies exist, but copyright 

owners must take up the challenge of invoking them. 

NON-INVASIVE SELF-HELP

Public Knowledge does not oppose the use of reasonable non-invasive self-help 

techniques by the content industry. By non-invasive, we mean techniques that do 

not entail a third party attacking a file located on a computer hard drive (or denialof-service attacks on individual users or on providers). Examples of non-invasive 

self-help include spoofing, flooding, decoy, spoiler files and redirection. Many of 

these techniques involve the intentional distribution of phony or corrupted files that 

an individual seeking to make an unlawful reproduction will then download. Others 

will send downloaders to legitimate sites. What distinguishes these techniques is 

that they are activated by an individual’s affirmative effort to obtain an unlicensed 

copy of a file. 

On the other hand, Public Knowledge cannot support self-help techniques that 

permit the copyright owner to block access to an individual’s computer hard drive 

for the purpose of making an allegedly illegal file unusable or incapable of being 

downloaded. In the most popular of these techniques, commonly known as Interdiction, a computer program repeatedly requests the same file from a particular P2P 

network user. As a result, no one else can get to that file, or to any other file on 

that user’s computer even if the other files to which access is sought are perfectly 

legal and downloading them is perfectly lawful. 

There are several problems with self-help techniques of this kind. The first, of 

course, is that the program, or robot, could be mistaken in its determination that 

a file is one that warrants protection. While we have received assurances from the 

RIAA that the ‘‘bots’’ that its member companies use are extraordinarily accurate, 

evidence submitted in its pending litigation with Verizon demonstrates otherwise. 

For example, UUNet, an ISP, was sent a notice by Warner Brothers, owner of the 

29

copyright to the motion picture ‘‘Harry Potter and the Sorcerer’s Stone.’’ The notice 

asked UUNet to disable access to a user, identifying as the single infringing file a 

1K file named ‘‘harry potter book report.rtf.’’ The size and type of the file make it 

clear that the file was nothing more than a child’s school book report on a Harry 

Potter book. The record includes other examples of similar inaccuracies. [12] 

Moreover, it is important to remember that the members of the RIAA will not be 

the only copyright owners capable of using these techniques, particularly if H.R. 

5211 becomes law. The fact that Interdiction not only makes unavailable the allegedly infringing file, but also makes the rest of the user’s files unavailable only exacerbates this problem. 

A second concern is that Interdiction and similar self-help techniques punish individuals for ‘‘making available’’ copyrighted content, regardless of whether that content was legally obtained or not. Such punishment would extend copyright protection beyond what the law currently allows. Unlike in the European Union, U.S. 

copyright law does not give a copyright owner a separate right to ‘‘make available’’

his work. Efforts to include such a right here have been heretofore rejected. 

Finally, we are concerned with the worst case scenario—that repeated requests 

or similar actions could prevent a user from accessing the Internet for any other 

purpose, resulting in a so-called ‘‘denial of service.’’ Regardless of whether an individual has an infringing file, denial of service caused by self-help will burden ISPs 

and other network users, both indirectly and directly. This is particularly true 

where such attacks can be done secretly, such that a user’s first call will be to its 

own ISP to complain about a malfunction. Even on a network where a loss of service 

for one may not directly affect other users, every denial of service claim requires 

ISP time and resources to figure out its cause, causing it to spend less time on 

other, more serious service problems, which might be caused by cyberterrorism, 

other security breaches or legitimate technological breakdowns. This has an indirect 

effect on all the other customers on an ISPs network and also burdens the entire 

network. Moreover, with some ISP networks (particularly the shared architecture of 

cable modem service), the service quality of innocent ISP customers could be directly 

affected if invasive self-help leads to a denial of service for another customer—in 

other words, innocent ISP customers are harmed by the acts of one suspected infringer. 

Legitimizing and harboring invasive self-help has startling implications. Again, 

whether the large content companies use techniques that are more accurate and 

often unrecognized by the computer user is nice, but is largely beside the point. If 

expressly permitted or protected, self-help of various shapes and sizes will be available to all copyright owners, some of whom may believe that it is perfectly within 

their rights to launch denial of service attacks. Some of these attacks may affect 

actual infringers, while some almost certainly will affect innocent parties, who will 

have no idea why they (or others) cannot access their files or why their Internet 

service is not working. These attacks will likely provoke retaliatory attacks by some 

users, and the acquisition of defensive software by others. Soon, the Internet will 

look like the Wild West, with self help bots and bot blockers replacing guns as the 

weapon of choice. 

The collective impact of all these self help efforts, particularly if they are sanctioned by law, might be to reduce or eliminate the effectiveness of the Internet as 

a communications medium in a number of ways, from consuming bandwidth to forcing ISPs into imposing crippling terms-of-service agreements. The final victim of 

this Internet free-for-all, of course, would be rollout of broadband, for which P2P is 

the ‘‘killer app.’’

PROMOTING COMPETITION TO BUILD A NEW BUSINESS MODEL

Last June, at the request of USA Today, I spent several hours discussing digital 

media issues with a number of top executives from the content and consumer electronics industries. What struck me was that the New York representatives of the 

content industries all agreed on one thing: that they had to create new business 

models that take advantage of the low cost, ubiquity and speed of the Internet. In 

answering the question of whether the recording industry had responded to the 

Internet needs of its customers, John Rose, Executive Vice President of the EMI 

Group stated: 

There’s no question that this industry, like every other industry that went 

through this, didn’t deal with it in as forward-thinking a manner as it could have. 

The real question is: here’s where we are, what do we do about it? There’s no way 

you’re going to constrain the Internet, . . . The question is, can you come up with 

economic models to empower guys like Alan [McGlade of MusicNet, an industrybacked online music service]? [13] 

30

These content industry executives believe, as I do, that if they can provide easy 

access to a wide range of high quality content at a fair price, most consumers looking for content over the Internet will choose their services. [14] In other words, they 

believe that they can, in fact, ‘‘compete with free.’’[15] Rob Reid of Listen.com, an 

online subscription music service that licenses music from the recording industry, 

said as much in a recent Department of Commerce Forum: 

The way I compete [with free] is I have to create a service that’s better than free, 

which is hard to do. I mean, that’s hard to do. I mean, that’s a tough proposition, 

but the good news is people do opt for things that are better than free all the time. 

If they didn’t, you know, we’d be eating at soup kitchens every night, and not going 

to restaurants. And just looking around this table, I see a bottle of Poland Springs 

. . . that tells us that designer water is a multi-billion dollar industry, and that 

comes out of the faucet for free. So better than free does exist. [16] 

Despite the fact that industry efforts to bring content online have been going on 

for years, a successful business model has not emerged. One of the reasons this is 

so is that creating such a model is not a simple task—it takes time, resources and 

sometimes plain dumb luck. [17] But I believe that there are two other reasons a 

business solution has been slow in coming: 1) the same industry minds have been 

attacking the same problem for all that time, and 2) the industry has refused to 

permit others to try and figure out how best to deliver content over the Internet. 

If the content industries are sincere in their desire to create new business models 

(and I believe that they are), then they should give others the opportunity to help 

them to do so. Not for free—for example, the recording companies could license their 

music to various online retailers and ask the licensee for the same statutory rate 

that the publisher gets ($0.08) for each song the licensee sold online. Retailers who 

choose to offer them to the public must all pay the same ‘‘wholesale’’ price but can 

then compete vigorously with each other to find the business proposition most appealing to consumers. This is a win-win situation. The copyright owner gets paid, 

and a competition ensues to build an online music service that provides a high quality, large catalogue at a reasonable price. In fact, several successful business models 

could emerge that are entirely different than anything being contemplated today 

and appeal to different types of consumers, just as retail stores do for pre-packaged 

goods. There will be failures, no doubt—but until innovators and entrepreneurs are 

given a chance to fail, the chances that success will be achieved are greatly diminished, and the public benefit from broad and competitive dissemination will surely 

be lost. [18] 

H.R. 5211 IS A WELL-INTENTIONED BUT FLAWED BILL

Public Knowledge appreciates the good intentions of Reps. Berman, Coble, Smith 

and Wexler in sponsoring H.R. 5211. We believe that they are sincere in their desire 

to encourage P2P technology and to stem the flow of illegal file sharing. 

Unfortunately, these good intentions cannot save this flawed bill. Part of the problem is that because P2P technology underlies the entire Internet, it is difficult to 

draft legislation that addresses specific P2P networks such as Morpheus and KaZaA 

without also including the entire Internet and World Wide Web in its scope. Also, 

as discussed above, it is difficult to imagine certain ‘‘self-help’’ techniques that could 

interfere with specific P2P networks that would not also put the efficient functioning of the larger Internet at risk, impose enormous new tech support burdens 

on ISPs and impair customer satisfaction with broadband. Finally, as discussed 

above, while we may accept that some of the techniques now in use by the content 

industries are somewhat benign, this bill allows for self-help by all copyright owners—some of whom may not have the same concerns about upsetting their customers as do large content companies. 

Among the provisions in this bill that are the most troublesome from a consumer 

perspective are:

• The bill gives copyright owners extraordinary powers to engage in self-help. 

H.R. 5211 grants copyright owners and their agents the right to break any 

law, state or federal, civil or criminal, in furtherance of ‘‘disabling, interfering 

with, blocking, diverting or otherwise impairing’’ the availability of his or her 

copyrighted works on a public P2P network. This extraordinary power is limited by five vague conditions: 1) the copyright owner may not ‘‘alter, delete, 

or otherwise impair the integrity of any computer file or data residing on the 

computer of a file trader’’ (Subsection (a)); 2) the owner must not impair the 

availability of files on a targeted computer other than the works the copyright 

owner owners except as ‘‘reasonably necessary’’ (Subsection (b)(1)(a)); 3) the 

copyright owner may not cause ‘‘economic loss’’ to any person other than the 

targeted file trader (Subsection (b)(1)(B)); 4) the copyright owner may not 

31

cause ‘‘economic loss of more than $50’’ to the targeted file trader (Subsection 

(b)(1)(C)); and 5) the copyright owner must notify the Attorney General seven 

days before engaging in self-help (Subsection (c)).

These conditions leave the door wide open for abuse by the copyright owner and 

harm to computer users. For example, the limitations on altering and deleting files 

in subsection (a) conceivably would not prevent a copyright owner from cutting a 

user’s DSL line or even his phone line, or knocking his satellite dish off his roof. 

The ‘‘as reasonably necessary’’ language of subsection (b)(1)(a) is undefined and invites a raft of excuses for why an individual’s non-infringing files were impaired by 

self-help. The subsections prohibiting ‘‘economic loss’’ do not cover any non-economic 

loss that a target file trader or innocent victim may incur. And Subsection (c)’s notice provision is toothless: there is nothing in the bill that gives the Attorney General guidelines by which to judge self-help techniques or the power to reject them. 

All that is required by that subsection is notice.

• The bill shifts the burden of using self-help mechanisms onto the consumer. 

Currently, the content industries are very careful about the type of self-help 

techniques they use. This is not only for public relations reasons—the misguided use of these techniques that harms an innocent party could also result 

in serious legal liability for a copyright owner. By providing a safe harbor for 

a whole range of non-invasive and invasive self-help techniques, H.R. 5211 removes the incentives and sanctions that currently impel content owners and 

others to be careful in their self-help. While the damage limitation for bringing a legal action for misguided self-help is only $250, copyright owners know 

that most victims will never sue because it is not worthwhile to do so; the 

damage rarely will be large enough to justify the time and cost of litigation. [19]

Equally as troubling is the fact that the bill creates no obligation for the copyright 

owner to notify a victim that her Internet access has been impaired. If they are subject to misguided self help, the vast majority of computer users will have no idea 

why their computer has broken down or why they can no longer access certain files. 

Without a notice requirement, even a tech-savvy victim who figures out what has 

occurred and decides to bring a lawsuit will not likely know whom to sue. Only if 

the victim can figure out exactly who impaired her system (among millions of copyright owners) can she then ask for the reasons for that action. Subsection (c)(2)(A).

• The bill erects enormous procedural obstacles for a victim of self-help to overcome before she can seek the remedies provided. H.R. 5211 creates a new 

cause of action for an affected file trader when a copyright owner ‘‘knowingly 

and intentionally impairs . . . [a] particular computer file . . . and has no 

reasonable basis to believe that such [file] constitutes an infringement of 

copyright,’’ and also causes over $250 dollars in damages to the file trader. 

But where H.R. 5211 giveth, it also taketh away. Even though the copyright 

owner is engaging in egregious and willful activity, the bill erects procedural 

hurdles to innocent citizens seeking to obtain restitution for wrongful selfhelp. The innocent file trader cannot get to the courtroom without first getting permission from the Attorney General (Subsection (d)). Whether the victim will ever get to court is left to the sole discretion of the Attorney General, 

who has four months to make that determination. This creates a supreme 

irony: the bill erects huge legal barriers for citizens seeking remedies for misguided self-help, while it dismantles them for content companies seeking remedies for infringement. This is not only anti-consumer, it is also likely unconstitutional. It delegates to the Executive Branch the discretion to block civil 

litigants from access to federal courts, and delegates to private parties the 

power to do what no government can; namely, to surreptitiously impose a 

prior restraint upon communications that are presumptively protected by the 

First Amendment without any judicial determination that the speech being 

suppressed is unlawful.

• The bill expands protection for copyrighted works beyond that required by the 

Copyright Act. Subsection (a) of the bill provides a safe harbor for self-help 

actions that impair the ‘‘unauthorized’’ distribution, display, performance or 

reproduction of a copyrighted work on a publicly accessible P2P network. But 

not all ‘‘unauthorized’’ uses of copyrighted works are illegal under the Copyright Act. In addition, as discussed above, by permitting self-help against individuals who merely make works available (rather than just those who illegally download available works), the bill gives copyright owners an additional 

‘‘right to make available to the public.’’ This right is now only recognized by 

32

European intellectual property laws, and has heretofore been rejected in the 

U.S.

H.R. 5211 is well intended to stem the flow of illegal file trading, but it goes way 

beyond what is necessary to permit the content industries to engage in the type of 

non-invasive self-help described above. While Public Knowledge might consider supporting a narrowly-crafted proposal that clarifies that non-invasive self help is permissible, H.R. 5211 is not that bill. 

CONCLUSION

In conclusion, I want to thank Chairman Coble, Congressman Berman and the 

other members of the Subcommittee for holding this hearing to discuss P2P networks. As the sole representative of consumer and citizens rights at this hearing, 

I would respectfully ask that you keep the record open for thirty days to permit 

other public interest organizations to submit testimony and comments. 

Public Knowledge urges the Subcommittee to act cautiously before seeking to alter 

the nature of a technology that improves the already significant abilities and flexibility of computers and the Internet, benefits artists, educators and businesses, and 

may very well be the ‘‘magic bullet’’ that drives broadband adoption. Illegal file trading on P2P networks can be limited through a combination of rigorous enforcement 

of the law, non-invasive self help techniques and promotion of competition to build 

new business models for online music. H.R. 5211, however, goes far beyond what 

is necessary or reasonable to limit illegal file trading, and if passed, could lead to 

actions by copyright owners that could threaten the core capabilities of the Internet. 

Thank you.

Notes

1. Public Knowledge is working in partnership with the Center for Democracy and Technology and Consumers Union on P2P and related digital copyright issues. 

2. A recent Gartner Research Note (Technology T–16–2550, September 16, 2002) predicts 

that ‘‘[b]y 2005, 10 percent of business interactions will occur via P2P-enabled technologies (0.7 probability).’’

3. www.groove.net/solutions/testimonials/education/unc.html 

4. Statement of Frank G. Hausmann, Chairman and CEO Centerspan Communications Corporation before the House Judiciary Committee Subcommittee on Courts, the Internet and 

Intellectual Property, June 5, 2002. 

5. Declaration of Sean Mayers in Support of MusicCity.Com Inc.’s and MusicCity Networks, 

Inc.’s Motion for Partial Summary Judgment in MGM Studios v. Grokster, www.eff.org/

IP/P2P/MGM—v—Grokster/20020122—mayers—decl.html 

6. Declaration of Gregory Newby in Support of MusicCity.Com Inc.’s and MusicCity Networks, Inc.’s Motion for Partial Summary Judgment in MGM Studios v. Grokster, 

www.eff.org/IP/P2P/MGM—v—Grokster/20020122—newby—decl.pdf. 

7. www. furthurnet.com 

8. One exciting P2P application that is in its nascent stages is ‘‘P2P signing’’ for the deaf 

and hard of hearing. Through this application, an interpreter in one location can use highspeed communications and low-cost video cameras to provide interpreting services to consumers at other locations across the country. Frank G. Bowe, Broadband and Americans 

with Disabilities at 2 (2002), www.newmillenniumresearch.org/broadband.html. 

9. Amy Kover, Napster: The Hot Idea of the Year, Fortune Magazine, June 26, 2000. See 

also, Understanding Broadband Demand, A Review of Critical Issues, Office of Technology 

Policy, U.S. Department of Commerce at 16 (September 23, 2002), www.ta.doc.gov/reports/

TechPolicy/Broadband—020921.pdf 

10. Speech by the Honorable Howard L. Berman to the Computer and Communications Industry Association Regarding Solutions to Peer to Peer Piracy (June 25, 2002), 

www.house.gov/berman/p2p062502.html (‘‘P2P networks represent as much of an opportunity as a threat to copyright creators. P2P represents an efficient method of information 

transfer, has the potential to greatly reduce the costs associated with server-based distribution systems, and can support a variety of legitimate business models.’’) 

11. 17 U.S.C. §§ 501–507; 17 U.S.C. §§ 1201–1204; 18 U.S.C. §§ 2318–2319A. 

12. Motion for Leave to File and Brief Amicus Curiae of United States Internet Service Provider Association in Support of Respondent filed in Recording Industry Association of 

America v. Verizon Internet Services, Case No. 1:02MS003323 at 6–12. 

13. ‘‘Digital Technology, Reshaping Industries, lifestyles,’’ USA Today, June 25, 2002 at 4E. 

14. The Office of Technology Policy at the U.S. Department of Commerce apparently agrees, 

Understanding Broadband Demand, A Review of Critical Issues, Office of Technology Policy, U.S. Department of Commerce at 17 (September 23, 2002), www.ta.doc.gov/reports/

TechPolicy/Broadband—020921.pdf (‘‘There is considerable belief that creative, legal, forprofit sites can out-compete ‘free’ alternatives. Industry will need to develop technologies 

that can protect digital content, ensure that legal services have the resources . . . to outcompete illegal exchanges, educate consumers about the need to respect intellectual property on the Internet, cooperate across sectors and deliver content in ways and on platforms that consumers want....’’) 

33

15. Bon Jovi and its record company, Vivendi Universal SA’s Universal Music Group, is competing with free by giving fans who buy their CDs ‘‘Bon Jovi Exclusives,’’ including preference in buying concert tickets, the possibility of climbing on stage and other band-related perks. Jennifer Ordonez and Charles Goldsmith ‘‘Bon Jovi Uses ‘Bounce’ To Battle 

Music Pirates,’’ Wall Street Journal, September 16, 2002, online.wsj.com/article—

print0,,SB103211681937801835,00.html. 

16. Statement of Rob Reid, Founder and Chairman of Listen.com, Understanding Broadband 

Demand: Digital Rights Management Workshop, July 17, 2002, U.S. Department of Commerce, Technology Administration www.ta.doc.gov/reports/TechPolicy/DRM–020717.htm 

17. A recent New York Times article details the challenges faced by online music services (including those backed by the recording industry) in getting permission to sell certain songs 

over the Internet. Amy Harmon, ‘‘Copyright Hurdles Confront Selling of Music on the 

Internet,’’ NY Times, September 23, 2002 at C1. 

18. This week’s announcement by the Warner Music Group that it would begin selling digital 

singles starting at 99 cents through retailers like Bestbuy.com and MTV.com is a good 

start. Amy Harmon, ‘‘Warner to Sell Digital Signals Online,’’ NY Times, September 24, 

2002 at C9. 

19. This is exacerbated by the fact that under the bill, a victim must first ask the Attorney 

General to decide whether her complaint is a valid one.

Mr. COBLE. Thank you, Ms. Sohn. 

Mr. Galdston? 

STATEMENT OF PHIL GALDSTON, SONGWRITER-PRODUCER 

Mr. GALDSTON. Mr. Chairman, Mr. Berman, Members of the 

Subcommittee, I appreciate this opportunity to share my thoughts 

on musical intellectual property and threat posed to the creators 

and owners of it. Just as importantly, I thank you for examining 

issues crucial not only to songwriters and music publishers but to 

music lovers around the world. 

As my bio states, I am a composer, lyricist, and music publisher. 

I am not a recording artist. I make a living and support my family 

by writing songs and submitting them to performers, producers, 

managers, labels, and anyone else who may help me get them recorded and exposed to the public. 

Over the course of my career, I have been fortunate enough to 

score hits on most major charts. My greatest achievement and my 

greatest asset is the catalog of over 600 songs I have created in 37 

years of writing. I am here today because that asset—my personal 

property—is under attack and is the subject of outright theft by 

those who obtain it without my permission and without compensating me. 

Please make no mistake: songwriters’ livelihoods are seriously 

and negatively impacted by unauthorized downloading of our work 

through peer-to-peer networks. 

While there is little doubt in my mind that the solution to this 

crisis is multifaceted, at least part of that solution requires that 

our elected representatives help us. 

To most people, the system compensating songwriters for the use 

of their work is murky at best. Those who discuss it try to draw 

analogies between intellectual property and so-called real property. 

I don’t believe that an appropriate analogy exists, and that tells me 

that what we songwriters create is rather unique. 

Real property, of course, is comprised of raw materials that are 

produced by someone else. You just can’t say that about songs. If 

I don’t dream it up from my heart and my head, there will be no 

song. The question most frequently asked of songwriters is, ‘‘Which 

comes first, the words or the music?’’ The answer is neither. What 

comes first is the inspiration, in all its wondrous variety, none of 

34

which, or their final expression, can be defined as ‘‘real property.’’ Nonetheless, as you well know, it is property. 

To understand how songwriters are affected by unauthorized 

downloads, it’s crucial to realize that except in rather rare circumstances, we do not sell our songs. We license them to record 

companies and other outlets in return for royalties when and if 

they sell. 

And to keep things simple, I’m going to keep my remarks to sales 

from mechanism royalties. But the principles apply to both mechanical and performance royalties. 

It’s not just semantically incorrect to say that people download ‘‘record companies’ songs’’; it is factually incorrect. The record companies don’t own the songs. They only own their recordings of those 

songs. Songwriters, individual creators, own their songs. All the 

angry talk about the major record labels and their failings unfairly 

lumps the songwriter in with the labels and ignores this essential 

fact. 

A person who downloads a record of a song of mine without my 

permission may think that they’re punishing what they believe are 

big, bad record companies or greedy, selfish artists, but they’re also 

punishing me, the person in the creative process who can least afford to be punished, because, if anything, the current licensing system for mechanical royalties already punishes me. 

When a license is sold to a record company, I receive nothing. My 

compensation in that situation depends entirely on the success of 

the recording. If I am compensated, the already low rate is set by 

statute. And frequently, labels demand that songwriters accept a 

three-quarter rate, $.06 per copy sold instead of the current statutory rate of $.08. This is another situation I hope Congress will 

look into. 

While I am sometimes paid less that statutory rate, I am never 

paid more. In fact, songwriters are the only people I know who are 

subject to a maximum wage. Although the law guarantees me due 

compensation for every reproduction of my songs, including digital 

downloads, I don’t receive anything for any of the unauthorized 

downloads made through P2P networks. 

If there are over 3 billion unauthorized downloads per month—

well, Mr. Berman has done the math for us—you can see what 

songwriters are losing. Therefore, while songwriters can see the 

value of the Internet as a new and potentially vast source of revenue and exposure, while we want music Internet services, including P2Ps to succeed, we must protect our right to be compensated. 

It’s sad that we songwriters are being punished for our success. 

The fact that it is difficult to go anywhere in the ‘‘civilized world’’

without constantly hearing songs written by American songwriters 

is tribute to the immense popularity of our work. Unfortunately, 

this popularity seems to have led to the misguided notion that because music is in the air, it should or must be free. On the contrary, music is only in the air because my colleagues and I, through 

inspiration and hard work, have put it there. 

All of this is about the basic principles of private property, principles that I have to believe most of those promoting or excusing 

unauthorized downloads would defend in any other situation. But 

I am due compensation for the use of my people, and because I’m 

35

not receiving it, no one should download my work without my permission. 

So what can Congress do to help copyright owners cope with the 

damage and the continued threat from our authorized downloads? 

I think the answer is simple and sensible: Help us help ourselves. 

The Berman-Coble bill, as I read it, would provide us with the 

ability to fight these unauthorized downloads by granting us limited, carefully circumscribed protection from potential liability for 

engaging in such self-defense. I think this piece of legislation is a 

good first step and part of the solution. 

I believe that you can help us. I hope you are willing to do so. 

This is about much more than just compensation or permission. 

This is about the health of music, for who will be drawn to a life 

creating music if making music cannot provide a livelihood? 

This also is about respecting each other’s property. My wife and 

I have taught our children that is wrong to steal, and yet we, all 

of us, are turning a blind eye to the theft of songs from the people 

who own them. 

Finally, music along with our other powerful cultural expressions 

is one of this country’s leading exports and greatest ambassadors. 

If we turn our back on those who create it, what will we be saying 

to our composers and lyricists? To our children? And what will we 

be saying to the rest of the world? 

Thank you. 

[The prepared statement of Mr. Galdston follows:]

PREPARED STATEMENT OF PHIL GALDSTON

INTRODUCTION AND BRIEF BIOGRAPHICAL INFORMATION

Mr. Chairman: My name is Phil Galdston, and I am grateful for this opportunity 

to share some of my thoughts on musical intellectual property and the threat posed 

to the creators and owners of it. Just as importantly, I thank you for your willingness to examine issues crucial not only to songwriters and music publishers, but to 

music lovers across the nation and around the world. 

As the biographical information I have provided will attest, I am a composer, lyricist, and music publisher. I am not a recording artist (although once upon a time 

I was one). I am what is known as a pure songwriter—one who makes a living and 

supports his family by writing songs and submitting them to recording artists, producers, managers, labels, and anyone else who may help me to get them recorded 

and eventually exposed to the public. For the record, although I do not speak on 

their behalf, you also should know that I am a long-time writer and publisher member of ASCAP (the American Society of Composers, Authors and Publishers) and a 

National Trustee and President of the New York Chapter of the National Academy 

of Recording Arts and Sciences, the group that bestows the GRAMMY Awards. 

Over the course of my career, I have been fortunate enough to score some major 

hits, and I’m fairly rare in that I have had songs appear on most of the major 

charts. Among my best known songs are: ‘‘Save the Best For Last’’ and ‘‘The Sweetest Days,’’ which are among seven of my compositions recorded by Vanessa Williams; ‘‘Fly’’ and ‘‘The Last To Know,’’ which are among five recorded by Celine 

Dion; ‘‘One Voice,’’ which was recorded by Brandy, and was UNICEF’s theme song 

in its 50th anniversary year; ‘‘World Without Love,’’ which was a top ten record for 

the late country star, Eddie Rabbitt; and ‘‘It’s Not Over (Til It’s Over),’’ which was 

a top ten pop and rock hit for the rock band, Starship. My songs have appeared on 

more than 60 million records around the world, and I have been honored with a 

number of prestigious awards, including a Grammy nomination for Song of the Year 

and ASCAP’s Song of the Year award. 

The hits and the awards aside, I am a songwriter and a small-business owner. 

My greatest achievement, and my greatest asset, is the catalogue of over 600 songs 

I have amassed in 37 years of writing. I am here today because that asset—my personal property—is under attack and is the subject of outright theft by those who 

obtain it without my permission and without compensating me. While sharing my 

36

thoughts on that subject, I hope I can shed some light on a few additional, and significantly related ideas, including the basic understanding of music rights as our society defines them and the abundant confusion among the different rights of record 

labels, recording artists, and songwriters. But please make no mistake about the situation songwriters face: our livelihood is seriously and negatively impacted by unauthorized downloading of our work through peer-to-peer networks. 

REAL PROPERTY VS. INTELLECTUAL PROPERTY

It would be nice to say that the business community in which we operate has developed a solution to this problem. But that is not the case, and, what’s more, it 

may be extremely difficult to achieve in the short run. While there is little doubt 

in my mind that the solution to the crisis brought on by unauthorized downloading 

will be multi-faceted and will require a combination of effective digital rights management technologies, better online access to digital copyrighted material, better enforcement of copyright laws, and new technologies to aid in enforcement, at least 

part of the solution requires that our elected representatives help protect us. 

To most people, the system compensating songwriters for the use of their copyrighted work is murky at best. (The good news, I believe, is that it’s no more com- plicated than the oil depletion allowance or farm supports.) I’ve noticed that most 

people who write or speak about music and the rights of those who create it try to 

draw an analogy between intellectual property and so-called ‘‘real property.’’ You 

know, ‘‘downloading a song without the copyright owner’s permission is like stealing 

a bicycle,’’ and the like. After many attempts on my own and with colleagues, I’ve concluded that an appropriate analogy probably does not exist. That tells me that 

what we create is rather unique. 

Real property is comprised of raw materials that are produced by someone else. 

You just can’t say that about songs. If I don’t dream it up from my heart and my 

head, the song will not exist. The question most frequently asked of songwriters is 

‘‘which comes first, the words or the music?’’ The answer is neither. What comes 

first is the inspiration, in all its wondrous variety of forms, none of which, or their 

final expression can be defined as ‘‘real property.’’ It is property, nonetheless. 

RIGHTS TO A SONG VS. RIGHTS TO THE RECORDING OF A SONG

To understand the position in which unauthorized downloading places songwriters, it is crucial to realize that, except in rather rare circumstances, we do not 

sell our songs. We license them to record companies, and other outlets, in return 

for royalties when and if they sell or are played in broadcast media. For the purposes of this statement, I am going to focus exclusively on the sales—or mechanical—royalty part of our revenue. 

There is a given in the music community: ‘‘It all starts with the song.’’ That is 

not only true of a great record or live performance, it’s true of the rights that flow 

from a song’s creation. And those underlying rights are separate and distinct from 

the rights attached to a recording of it. It is not just semantically incorrect to say 

that people download ‘‘record companies’ songs.’’ Strictly speaking, the record companies only own their recordings of those songs, not the songs themselves. 

The significance of this is that all the angry talk about the major record companies, and their failings (you know, ‘‘Why should I pay $18.00 for a CD with only 

one good song on it?’’ and the like), when applied to the debate about unauthorized 

downloading ignores this essential fact of ownership. So, a person who downloads 

a record without authorization may be trying to punish what they believe are big, 

bad record companies and greedy, selfish artists. But they’re punishing songwriters 

like me, the people in the creative process who can least afford to be punished. 

When I license a song to a record company, I receive no fee, no advance, no payment of any kind. I will only receive compensation when, and if, the recording of 

my song sells. If I am compensated, the rate, which is already quite low, is set by 

statute. Frequently, as a condition of recording and releasing a song, labels demand 

that songwriters accept three-quarters of the statutory rate; in other words, six 

cents per copy sold instead of the current statutory rate of eight cents. (This is another situation I hope Congress will look into). Please note that, while we may be 

paid less, we are never paid more. And since we’re limited to a maximum of eight 

cents by statute, we can’t charge more elsewhere to make up for the loss. 

WHAT SONGWRITERS ARE LOSING

Under law, the compensation we do receive is due us from every reproduction of 

our songs, including digital downloads. However, we do not receive any compensation for unauthorized downloads made through P2P networks, like KaZaA, Morpheus, or Bear Share. Therefore, while songwriters can see the value of the internet 

37

as a new and potentially vast source of revenue and exposure, while we want music 

internet services, including peer-to-peer services, to succeed, we must demand that 

we be compensated for the use of our work. That is our legal right. 

If, as the most recent studies suggest, there are over three billion unauthorized 

downloads per month on all known peer-to-peer servers—well, you can do the math 

and see what songwriters are losing. Moreover, every time someone downloads a 

song of mine without my permission, I am losing all that follows from it: the ability 

to support my family, the capital needed to continue to re-invest in my business, 

and the economic incentive to continue to create. 

THE RIGHT TO GRANT OR DENY PERMISSION

In a peer-to-peer download, songwriters are losing something else: the right to 

grant or deny permission for that type of use. Of course, this is an essential aspect 

of ownership of any property. But in this case, it’s a point illustrative of the complexity of the interlocking benefits of the use of songs. 

For example, although a good number of artists write the songs they record, their 

rights as recording artists and any artists royalties they may receive from the success of their recordings are entirely separate and distinct from those they enjoy as 

songwriters. By extension, my rights as a songwriter and any financial gain I may 

derive from the success of a recording made of it are distinct and separate from 

those of the artists who records my songs. 

There are artists, labels, and artist-songwriters who may very well benefit from 

permitting audience members to download their work for free. Unlike pure songwriters, artists and labels have alternate sources of income and long-range goals to 

promote. Celine Dion or Brandy or Beyonce ́ Knowles may profit more from the sales 

of concert tickets or t-shirts than they lose from a free download promoting their 

merchandise. The artist and label may decide that it is more profitable to offer a 

free download in return for, say, an audience member’s e-mail address. That trade 

provides them with an opportunity to market other products and services. Simply 

put, that is their choice; it should not be imposed on me. (By the way, I haven’t 

seen a lot of ‘‘PHIL GALDSTON, PURE SONGWRITER’’ t-shirts for sale.) 

SONGWRITERS ARE BEING PUNISHED FOR OUR SUCCESS

It is sad to me that, as a group, we songwriters are being punished for our success. The fact that it is difficult to go anywhere in ‘‘the civilized world’’ without constantly hearing songs—the vast majority of them written by American songwriters— is tribute to the immense popularity of our work. Be it a store, a mall, a movie theater, a living room with a TV on, a dorm room with a computer, a restaurant with 

a radio playing, or even the much-maligned dentist’s office or elevator, the soundtrack to our lives is a stream of songs. And I imagine that, for many, this ubiquity, 

born of popularity, is the source of the misguided idea that, because music is in the 

air, it should or must be free. 

On the contrary, music is only in the air because my colleagues and I, through 

inspiration, hard work, and perseverance, have put it there. We are due our just 

compensation for its use, including via download. Just as importantly, as individual 

creators, we are entitled to decide when and how it may be downloaded. All of this 

is about the basic principles of private property—principles that I have to believe 

most of those promoting or excusing or defending unauthorized peer-to-peer 

downloads would defend in any other situation. 

HOW CONGRESS CAN HELP

What can Congress do to help copyright owners coping with the damage and the 

continued threat from unauthorized downloads? Unless you’re going to set up a ‘‘copyright police’’ to investigate and prosecute this wholesale theft, we’re going to 

have to ask you to help us help ourselves. I wish I could see another way around 

this, but I can’t. 

The unique problem we songwriters face when our work is pirated is that, unlike 

the owners of real property, not only can’t our property be returned to us, its return 

would not compensate us. It is the unauthorized use in the form of a download of 

our songs for which we can never be compensated. So we must find a way to stop 

the unauthorized downloads. 

We’re probably most similar to the owners of satellites and cable systems, who 

face no liability when they use electronic countermeasures to stop the pirating of 

their signals and programming. However, at this point, due to the wide range of 

many anti-hacking laws, our legal ability to prevent the theft of our property 

through peer-to-peer systems is inhibited by a high degree of liability. The Berman 

Bill, as I read it, would provide us with the ability to stop these unauthorized 

38

downloads by granting us limited, carefully circumscribed protection from potential 

liability for engaging in such self-help. In my opinion, this piece of legislation—even understanding that it may be possible to improve it—is a good first step. 

I know that you can help us. I hope you are willing to do so. In the end, this is 

not solely about just compensation or permission; this is about the health of music. 

For, who will be drawn to a life creating music, if making music cannot provide a 

livelihood? And very importantly, this also is about respecting each other’s property. 

We teach our children that it is wrong to steal. Such unethical or immoral behavior, 

we instruct them, is never acceptable. And yet, we currently turn a blind eye to the 

theft of songs from the people who own them. 

Finally, music, along with our other powerful cultural expressions, is one of this 

country’s leading exports. It is also one of our greatest cultural and, some would 

say, political ambassadors. If we turn our back on those who create it, what will 

we be saying to our composers and lyricists? What will we be saying to our children? 

What will we be saying to the rest of the world? 

Thank you.

Mr. COBLE. Thank you, Mr. Galdston. 

Mr. Saaf, you’re recognized for 7 minutes. 

STATEMENT OF RANDY SAAF, CHIEF EXECUTIVE OFFICER, 

MEDIADEFENDER 

Mr. SAAF. Thank you. 

I’d like to start off by thanking Mr. Berman for having the foresight to bring a bill like this to the forefront. 

Mr. COBLE. Mr. Saaf, if you would, pull that mike a little closer 

to you. Thank you. 

Mr. SAAF. I want to start off by saying, I am not a lawyer, I have 

read the bill, and I do not claim to understand all the points of the 

bill or the law it’s affecting. 

I’m here as a technologist. 

I am the president and CEO of MediaDefender. MediaDefender 

is the largest developer and seller of the peer-to-peer anti-piracy 

software this bill is addressing. 

I want to make the point of how noninvasive MediaDefender’s 

technologies are, in my testimony. We have been selling our technology for over 2 years. Very little reaction has been seen because 

of how benign our technology is. 

MediaDefender is not trying to quash the advancement of peerto-peer networking. On the contrary, MediaDefender is a big fan of 

peer-to-peer networking. We believe it’s one of the biggest advancements in the Internet since the Web page and has countless applications. However, MediaDefender is also a fan of copyright law. We 

don’t feel these two positions are in opposition to each other. 

Piracy is currently the primary use of peer-to-peer networking. 

We have consistently seen through our hundreds of reports that we 

generated that 30 days after the release of a popular piece of copyrighted material, approximately 15 percent of the network will 

have download that piece of copyrighted material. 

With over 50 million regular users of peer-to-peer networking, 

that calculates to just over 7.5 million illegal downloaders per copyrighted piece of material. 

The top-selling album this year, in its first months, sold just over 

4 million copies. I think that gives a good scope of the magnitude 

of the problem. 

MediaDefender’s technology provides a pleasant medium where 

peer-to-peer technology and copyright law can live together. There 

are some technology problems that can only be solved with techVerDate Jan 17 2002 09:45 Nov 05, 2002 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6601 G:\WORK\COURTS\092602\81896.000 HJUD1 PsN: 81896
39

nology. The virus industry can only be solved with the anti-virus 

industry’s software. MediaDefender’s technology is the only way to 

stop decentralized peer-to-peer piracy. 

The classic example of a decentralized peer-to-peer network is 

the Gnutella network. It was created as a reaction to the Napster 

lawsuit as an indestructible peer-to-peer system. 

Napster was centralized. There was somebody to regulate. Obviously, it got shut down for copyright infringement. 

Gnutella, on the flip side, is completely decentralized. There is 

nobody to sue and nobody to regulate. It’s a free-floating technology 

on the Internet. 

MediaDefender’s technology is the only way to regulate a network like Gnutella. MediaDefender technology only affects networks on a macro scale, meaning we don’t really pay attention to 

the individual users much on the network. 

MediaDefender’s technology participates in the peer-to-peer network like any of the other 50 million peer-to-peer users. Our aim 

is to prevent the person seeking the pirated material from finding 

the pirated material. Data is not collected on individuals. Computers and files are not harmed. There is no excessive drain on 

bandwidth. And legitimate content is still widely available on these 

networks. 

Some of MediaDefender’s technologies are completely lawful and 

have been spoken about here, such as decoying, spoofing, and 

they’re well-understood. 

However, other technologies that could be very effective in the 

fight against piracy happen to overlap with existing computer use 

and hacking laws that were never meant to address peer-to-peer 

networking. 

Interdiction is the classic example of one of those technologies. 

Interdiction is where MediaDefender gets in line and downloads 

content from a person providing content on a peer-to-peer network. 

To the end-user providing the content on the peer-to-peer space, 

it looks just like somebody else is downloading the content from 

them. People are putting these files to be available on the public 

Internet space via these peer-to-peer networks, and MediaDefender 

is just downloading it from them. If we weren’t downloading it from 

them, somebody else would be. 

There is no excessive drain on resources when we’re doing this, 

and it doesn’t affect the Internet services such as e-mail, Web 

browsing, or even the other use of peer-to-peer networking. It acts 

exactly the same as the peer-to-peer networks act. 

It’s purely coincidental that some current laws overlap with this 

particular technology. We don’t want a MediaDefender noninvasive 

technology to be illegal due to hacking laws that were never meant 

to address peer-to-peer self-help technology. 

MediaDefender believes strongly in the privacy of individual 

users. MediaDefender has been able to stay under the radar for 

over 2 years because of how noninvasive our technology is. 

Right now, copyright owners have three options, as I see it. One, 

you sue the tens of millions of individual contributory copyright infringers on the peer-to-peer networks. Two, you sue the software 

developers who create the systems. For a system like Gnutella, 

40

where there are thousands of different software developers, that’s 

very impractical. Or three, you use MediaDefender’s technology. 

MediaDefender’s technology is the only way to proactively prevent the economic harm before it occurs. Even if you sue these people, even if you win these lawsuits, the damage has been done; 

they can’t repay the millions of dollars of economic harm they’re 

causing. MediaDefender’s technology is actually able to proactively 

prevent that harm. 

Thank you. 

[The prepared statement of Mr. Saaf follows:]

PREPARED STATEMENT OF RANDY SAAF

I want to make clear at the outset that I have read the legislation and I am not 

a lawyer. I do not pretend to completely understand Congressman Berman’s proposed peer-to-peer (‘‘P2P’’) bill nor the current law it is affecting. I am coming here 

as a technologist and the primary provider of the anti-piracy technologies this bill 

is directed toward. MediaDefender has a suite of technologies that are clearly legal 

and are widely deployed for anti-piracy protection on peer-to-peer networks. 

MediaDefender also has a group of technologies that could be very effective in combating piracy on peer-to-peer networks but are not widely used because some customers have told us that they feel uncomfortable with current ambiguities in computer hacking laws. These computer hacking laws are beyond my means of understanding, but I know that their intention is not to prevent reasonable, non-invasive 

anti-piracy technology. My aim is to inform you about MediaDefender and its technology. I want the committee to see the non-invasive nature of MediaDefender’s technology so that Congress accepts the peer-to-peer bill to allow reasonable selfhelp technologies on peer-to-peer networks, while still protecting individuals’ civil 

liberties. 

MediaDefender has been selling its P2P anti-piracy technologies for over two 

years and has gone largely unnoticed. MediaDefender’s ability to operate ‘‘under the 

radar’’ is a result of the company’s dedication to providing non-invasive technological solutions to the ever growing piracy problem on P2P networks. For the most 

part, there has been very little opposition to the deployment of our technologies. We 

have seen very little complaining, and we attribute that to the non-invasiveness of 

our technology. We all know that there would be a huge outcry if damage was being 

done to peoples’ computers and clearly that is not the case. People might not ever 

even know this was going on if MediaDefender never came forward. However, 

MediaDefender feels it is important to come out and speak on this legislation because of how it could dramatically help solve the piracy dilemma on the public 

Internet. 

Most people agree that advances in technology are beneficial to society as a whole. 

MediaDefender is not trying to quash the progress in computer science that has 

been gained through the widespread adoption of P2P networking. MediaDefender’s stance is that P2P networking is a huge evolution in the Internet and will have 

countless applications and advantages. MediaDefender is also a fan of copyright law. 

We do not feel these two stances are in opposition to each other. It is true that the 

primary use of P2P networking today is piracy. However, there are many companies 

trying to advance the technology toward more noble goals. 

MediaDefender’s technology provides a pleasant medium where copyright law and 

P2P technology can live together. Technology is fostered by technical solutions to 

P2P anti-piracy. MediaDefender and creators of P2P software are constantly pushing each other to advance our technologies. MediaDefender views this game of cat 

and mouse as a net gain for all parties because, at the end of the day, we are all 

left with stronger, more sophisticated technology than when we started. The most 

analogous situation is the virus/anti-virus industry. When people advance virus 

technology, companies like Symantec have to develop new technology to solve the 

new problems. Similarly, when P2P piracy advances occur, MediaDefender has to 

develop new technology to solve the new problems. Thus, P2P technology is allowed 

to advance toward the bettering of its legitimate uses, and copyright owners can feel 

that they are not being driven out of business. 

MediaDefender’s technologies only affect the networks on a macro-scale and not 

on a micro-scale. MediaDefender only communicates with the P2P networks on a 

high level and pays no attention to the individual users. We do not identify, nor target individuals. We do not collect information about individuals. All we see or care 

about are the numbers. The primary aim of the technology is to prevent the person 

41

who is seeking pirated material from finding pirated material. People’s computers 

are not harmed and files are never altered or deleted. There is no excessive drain 

on bandwidth resources. Legitimate content is still widely available on the networks 

because its availability is not affected by the technology. Even piracy advocates have 

no basis for complaint because a wide assortment of pirated material is still available on the P2P networks. Our technology does not affect the scalability or overall 

integrity of the P2P networks. As stated earlier, MediaDefender has been selling its 

technology for two years and that clearly has not hindered the growth of P2P networking. There are nearly twice as many users today as there were in Napster’s more popular days. The most popular P2P application receives over 2.5 million 

downloads a week. I would say that our technology has done very little to discourage the use and adoption of P2P networking as a whole. However, the very specific 

use of the P2P networks for piracy of our clients’ copyrighted materials has been 

sharply affected. The good news is that P2P networking as a technology can live 

and thrive even in the presence of piracy control. At the end of the day, this is how 

it has to be. P2P networking is not going anywhere, and copyright law is not going 

anywhere. So, they have to learn how to coexist without destroying each other. 

The most threatening aspect of P2P networking to the copyright holders is the 

growing trend of decentralization. All of the most popular P2P networking technologies in the world are either completely or partially decentralized. Decentralization means that there is no central entity to sue or regulate using the law. Even 

if all the courts agreed to shut a decentralized network down, it could not be done 

because it is simply a free floating technology protocol on the Internet, similar to 

FTP or HTTP. The original completely decentralized P2P protocol, Gnutella, continues to be the leader in the decentralized P2P world. Thousands of computer scientists have developed hundreds of programs to hook into this ethereal network that 

floats on the Internet. Any programmer can very simply code a software client to 

hook into the network. Nobody owns Gnutella and nobody regulates it. However, the 

clear and primary use of the network is for the downloading of copyrighted material. 

This intuitive conclusion has been verified by MediaDefender’s years of research. 

Gnutella was born out of a backlash in the online world toward the Napster lawsuit, 

and it was created to be an unstoppable P2P technology. Any person can see the 

breadth of pirated material on Gnutella by putting a generic search string, such as 

a period (‘‘.’’), into any Gnutella client. When I typed a period (‘‘.’’) and hit search 

on a Gnutella client this morning, I received over 1000 returns with content ranging 

from Eminem to Harry Potter. I advise anyone to perform this simple experiment 

if they still need to convince themselves P2P networks are primarily used for piracy. 

Copyright law never anticipated a completely decentralized P2P network on the 

Internet and cannot prevent the piracy. Sometimes you have to use technology to 

regulate technology because there is no other practical means. Decentralized P2P 

networking is a case where there is no other solution beyond MediaDefender’s antipiracy technology. MediaDefender feels that it is important that the current laws 

do not stand in the way of non-invasive anti-piracy technology on the Internet. The 

concern is always that hacking and computer use laws not intended to address P2P 

anti-piracy technologies will be misapplied. 

Most current computer law focuses on hacking and does not take into account its 

implication on P2P anti-piracy technology. The concept of a P2P system like Napster 

is relatively young and was not around when many computer laws were drafted. Nobody could have anticipated that they would have an impact on legitimate anti-piracy companies. MediaDefender sells a variety of clearly lawful technologies such as 

Decoying. For the most part this technology is widely understood and accepted. Decoying is accomplished by passively acting as a member of the P2P network on the 

Internet public space and allowing thousands of files to be downloaded from our 

computers. The primary purpose of Decoying is to create a needle in a haystack situation which makes the pirated content difficult to find. All P2P networks have two 

basic functionalities: search and file transfer. Decoying only affects the search 

functionality of a P2P network and does nothing to the file transfer side. The pirated material is still there on the network, but it is harder to find. Decoying is the 

most clear and intuitive of MediaDefender’s technologies. MediaDefender has several other technologies that, like Decoying, are clearly legal but we cannot go into 

great public detail on them at this time because there are people whose sole purpose 

is to overcome our anti-piracy technologies. MediaDefender has another group of 

equally benign technologies that could be more effective in preventing piracy, but 

they fall into grey areas of the current computer laws. Therefore, customers will not 

purchase these technologies. It is not the case that these technologies are particularly invasive, but rather, they just coincidentally fall into grey areas of very complicated hacking laws. We don’t want MediaDefender’s self help technology to be illegal due to hacking laws which were never meant to address P2P anti-piracy. ObviVerDate Jan 17 2002 09:45 Nov 05, 2002 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6621 G:\WORK\COURTS\092602\81896.000 HJUD1 PsN: 81896
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ously, our customers are not going to risk using a technology that falls into a grey 

area of the law despite how badly they need that technology. 

One of technologies that we are told falls into the grey area of the law is Interdiction. I am not going to try to describe how Interdiction falls into the grey area of 

the law. I have been assured from our customers that this law is unusually complicated, and it is not trivial to try and understand it. I am not a lawyer, I am a 

technologist. I simply want to describe the technology and why I feel that it is a 

good example of a non-invasive technology that can provide societal net gain if used. 

Fist I want to make it clear that MediaDefender agrees that any anti-piracy solution 

on a P2P network has to be non-invasive. Peoples’ computers and files should never 

be harmed under any circumstance. However, any P2P anti-piracy technology will 

inevitably involve communication with individuals’ computers located on the P2P 

network. The P2P networks and their participants exist on the Internet public 

space. Behind the scenes of a P2P network there is a massive array of communications and data transfers. MediaDefender always participates in P2P networks via 

their protocols and plays by their rules. What I mean by ‘‘plays by their rules’’ is 

that MediaDefender does not develop technologies to stop the P2P networks outside 

the scope of what the P2P networks allow. P2P networks allow file uploading, and 

that is simply what we are doing with Decoying. P2P networks allow file 

downloading, and that is simply what we are doing with Interdiction. 

Interdiction only targets uploaders of pirated material. The way it targets them 

is to simply download the pirated file. MediaDefender’s computers hook up to the 

person using the P2P protocol being targeted and download the pirated file at a 

throttled down speed. MediaDefender’s computers just try to sit on the other computers’ uploading connections as long as possible, using as little bandwidth as possible to prevent others from downloading the pirated content. MediaDefender’s com- puters do not scan the other computers’ ports or hook into other computers exploiting known security weaknesses. MediaDefender only communicates with the computer over the P2P protocol which the user has opened up to the public Internet. 

The owner of the computer feels no additional impact on their computer beyond 

what the P2P network already applies. It should not make a difference to the user 

who they are uploading a pirated file to. In fact, most people who upload files on 

these P2P networks are bystanders who do not even realizing they are serving pirated content. Most of the P2P networks re-share content when it is downloaded. So, 

when a P2P user downloads a copy of Madonna’s new album, they may un-knowingly become a contributory copyright infringer, uploading that file to thousands of 

other users. 

Interdiction works by getting in front of potential downloaders when someone is 

serving pirated content using a P2P network. When MediaDefender’s computer’s see someone making a copyrighted file available for upload, our computers simply hook 

into that computer and download the file. The goal is not to absorb all of that user’s 

bandwidth but block connections to potential downloaders. If the P2P program allows ten connections and MediaDefender fills nine, we are blocking 90% of illegal 

uploading. The beauty of Interdiction is that it does not affect anything on that computer except the ability to upload pirated files on that particular P2P network. The 

computer user still has full access to e-mail, web, and other file sharing programs. 

Interdiction does not even affect a user’s ability to download files, even pirated files, 

on the P2P network while their computer is being Interdicted. An Interdicted computer may still share up illegal files using other file transfer programs other than 

that particular P2P network being Interdicted. For example, a user may run two 

different P2P networks, but MediaDefender is only being paid to Interdict one. The 

second P2P network will not be affected even though the first is being Interdicted. 

Multiple computers on the same Internet connection will not be affected if one of 

those computers is being Interdicted. In practice most users of the P2P networks 

will not even realize their computers are being Interdicted. The purpose of the networks is for transferring files, and that is simply what is happening. The impact 

to the person’s computer is not noticeably different from when the person is running 

a P2P program not being Interdicted. Legislation like Congressman Berman’s peerto-peer bill helps clarify that non-invasive self-help technologies, such as Interdiction, are a legitimate form of copyright protection. 

Technology like MediaDefender’s leaves the copyright holder with options. Right 

now the options copyright holders have are sue the countless number of P2P piracy 

systems, go after the tens of millions of contributory copyright infringers, or use 

MediaDefender’s technological solutions. Often times MediaDefender’s technological 

solutions are the only way to prevent immediate irreparable economic harm when 

a highly anticipated piece of copyrighted material is leaked onto the Internet. Nobody really wants to sue individuals or programmers. The financial loss has already 

occurred by the time the lawsuit is over, and the infringer is rarely able to correct 

43

the loss to the copyright holder. With tens of millions of P2P users, most of which 

are in the United States, many people we know and love are downloading pirated 

material. While downloading pirated material is not legal, it is a much less damaging a crime than making pirated material available for upload. Unfortunately, 

many of these illegal uploaders are people who are not intending to serve illegal material for download, and do not have the computer savvy to change the settings on 

the P2P program. Interdiction prevents these people from unintended distribution 

of copyrighted material. The advocates of MediaDefender’s technology do not want 

to see peoples’ computers hurt or privacy invaded. Most want to see technology advance. Elegant solutions to technology problems allow technology to advance without encumbrances of bureaucracy. If legal minds believe the current draft of the legislation leaves too much room for abuse, it should be redrafted. However, the concept should not be abandoned because one thing is certain: P2P technology will continue to improve and illegal downloading of copyrighted material will only get easier.

Mr. COBLE. Thank you, Mr. Saaf. 

And thanks to each of the panelists for your contribution. 

Now, we impose the 5-minute rule against ourselves as well, so 

I will start. 

Ms. Rosen, it’s my understanding that RIAA member companies 

are already using self-help technologies to prevent digital piracy. 

Now, some might say, well, if this is the case, is H.R. 5211 really 

necessary? What do you say to that? 

Ms. ROSEN. It’s a good question, Mr. Chairman. And I think, as 

some people have said today, spoofing is perfectly legal. Redirection, as Mr. Boucher I think defines it, or as somebody’s testimony 

defines it, is perfectly legal. 

I think the issue is, what do you do about that? What do you 

about the fact that for every measure you come up with, there’s a 

countermeasure? 

I think there’s something that Ms. Sohn’s testimony doesn’t deal 

with, and that the press just keeps getting wrong on this bill. I’m 

all for additional cautions being written into the bill, you know, 

against whatever bad things people think exist. But the absolute 

fact seems to be that anybody today can go on to one of these networks who is not a copyright owner—I feel like I have to repeat 

this for the press—anyone today who is not a copyright owner 

could go on to one of these networks and do everything that Ms. 

Sohn and Mr. Boucher and Ms. Lofgren said they’re worried copyright owners are doing and be subject to less liability than the 

copyright owners would be if this bill were passed, because this bill 

actually creates additional liabilities for the copyright owner if they 

make a mistake. 

So anyone could do any of that today and be subject to less liability legally than the copyright owner would be if this bill were 

passed. That seems to me a lot of protection. 

But I’m all for anybody coming forward and putting in whatever 

additional protections might be necessary for whatever bogeymen 

people are afraid of in this area. But I think the rhetoric around 

this issue has just gotten way beyond the facts. 

Mr. COBLE. Well, I agree, Ms. Rosen. That’s why I mentioned 

earlier, what I said about the insertion of the fear tactics. Some of 

the people have very cleverly done that. 

Ms. Sohn, let me ask you a question. P2P network designers, I 

believe, if they so desired, could design their systems to limit copyright infringement. Now, this could avoid much of the need for 

44

countermeasures and many of the efficiency and stability concerns 

that you’ve raised. Do you think they should so design it? 

Ms. SOHN. Mr. Chairman, the devil’s in the details. I mean, yes, 

copyright owners have rights. And as I said before, I strongly support enforcement of laws to ensure that their rights are enforced 

and they get remedies. 

But the problem is, is depending on you design the network, citizens and consumers have rights as well. They have fair use rights. 

They have certain, you know, personal rights and personal expectations about the way to use the computer and use the technology. 

And so I guess I wouldn’t be opposed to it, but I would have to 

see the details. 

Mr. COBLE. I guess the direction from which I come, it seems 

that they’re designed now in such a way that they can circumvent 

the law. And I don’t mean to overly simplify this. You’d think they 

could design so they could comply with the law; that’s my point. 

Ms. SOHN. Perhaps they could. I mean, I’m, again—I think peerto-peer networks—it’s in my written testimony—have a lot of great 

uses. 

Mr. COBLE. And I concur with that. 

Ms. SOHN. Absolutely. You know, again, I’d have to see how they 

could design it. Could they design it to stop copyright infringement? Perhaps. Might that also impinge on citizens’ rights? That’s 

where the problem arises. 

Mr. COBLE. All right, thank you. 

Mr. Galdston, in your testimony, you mentioned the often-cited 

argument that copyright owners should embrace the free file sharing on peer-to-peer networks because it acts or serves as a promotion for music, which in turns generates CD sales. 

Elaborate, if you will, how the songwriter is different from the 

record companies or the recording artists in response to this argument. 

Mr. GALDSTON. That’s a good question, Mr. Chairman. And I 

think it’s a frequently misunderstood concept that I tried to articulate in my oral statement. Let me go a little farther. 

I’ve had five songs recorded by Celine Dion. I’m very grateful for 

that. And we are united in our success and in our partnership 

when my song is sung by her on a record that is released by 

Sony—not Universal, by the way. 

But where we may depart is that Celine Dion has a larger career 

as a recording artist, and she has a larger business decision to 

make. She could easily decide that it is worth it to offer a free 

download of a track or tracks from one of her albums in return, 

let’s say, for securing the e-mail address of somebody who wants 

to download it, so that she can offer other merchandise. And of 

course, anybody who is in the music business knows that merchandising is tremendously profitable and successful. 

So she may say: I will offer a free download of a track from a 

forthcoming album, and in return, I’ll try to sell a t-shirt. 

The problem is, I haven’t seen a lot of Phil Galdston t-shirts for 

sale. [Laughter.] 

And that’s where our interests diverge, because if she offers for 

download a recording of one of my songs, I don’t get anything 

where she stands to benefit some other way. 

45

Mr. COBLE. I see that my red light appears. Mr. Saaf, I’ll get you 

on the next round. 

The gentleman from California. 

Mr. BERMAN. Thank you, Mr. Chairman. 

Is the Phil Galdston concert tour a big item? 

Mr. GALDSTON. Well, if I might just say, I really appreciated Mr. 

Wexler’s demonstration. It would have been a lot more enjoyable 

for me if we actually heard the song, though. [Laughter.] 

Mr. GOODLATTE. Would the gentleman yield? 

Mr. BERMAN. Sure. 

Mr. GOODLATTE. That’s why I wanted Mr. Wexler to yield to me, 

to get the music on. [Laughter.] 

Mr. BERMAN. Yes. All right, well, I guess it’s up to self-help. 

[Laughter.] 

Ms. Sohn, in the statement you gave, you did not make this 

statement, although you raise the specter of it in your answer to 

the Chairman’s question, you uttered the words ‘‘fair use.’’

I’m curious about fair use on publicly assisted peer-to-peer filetrading systems. Mr. Boucher and Ms. Lofgren and I and others, 

we’ve had many discussions about backup copies and how wide the 

net is in terms of fair use. And there’s a lot of interesting discussion about what fair use is. 

For the life of me, you surely cannot contend that files put on 

publicly accessible peer-to-peer systems available to 100 million or 

more consumers constitutes an act of fair use. But your written 

statement asserts, and I think you made an oblique reference to it 

in your response to Mr. Chairman, that a copyrighted work publicly available on a peer-to-peer file-sharing network for 

downloading without authorization isn’t necessarily copyright infringement. 

The 9th Circuit Court in Napster—well, let me just preface this 

by saying, I totally disagree. I think it’s clearly an activity which 

violates a copyright holder’s exclusive right to distribution. The 

Copyright Office agrees. The Ninth Circuit in Napster says Napster 

users who upload file names to the search index for others to copy 

violate the plaintiff’s distribution rights. 

I’d be curious for you to develop how you can contest the notion 

that making a copyrighted work available for downloading on a 

public peer-to-peer network doesn’t violate the exclusive right of 

distribution. 

Ms. SOHN. Well, just to clarify, I think what I really said in my 

written testimony was that U.S. copyright law does not include a 

right to make available, and that is contained in European law but 

that U.S. law doesn’t contain such a right. And in fact, when that 

has come up, it has been rejected. 

So that actually—I didn’t discuss the right of distribution. I just 

talked about the right to make available and that there is no such 

specific——

Mr. BERMAN. But the reason that the words ‘‘making available’’ don’t appear in U.S. law is because Congress in implementing the 

WIPO treaties, when we passed the legislation implementing them, 

specifically found that the distribution rights and other rights encompass the idea. They include the idea of making it publicly available. The courts have said that. The Copyright Office has said that. 

46

The fact that two magic words don’t appear because we called it 

something else doesn’t mean it’s not so. 

Ms. SOHN. Right. But it’s still not actually part of American law, 

U.S. law. I mean, yes—look, I’m not defending it. If you’re asking 

me to defend uploading, I’m not going to do it right here. 

But that was the only point. It was a very narrow point that I 

was making in that written testimony. 

Mr. BERMAN. All right, well, I mean, so narrow as to—you’re not 

making a case that there’s fair use in—— Ms. SOHN. No, absolutely not. 

Mr. BERMAN [continuing]. Any of this? All right. 

So now we’ve established—well, do you disagree with the contention Mr. Saaf made, that the primary use of peer-to-peer systems 

is to trade infringing materials and is, therefore, illegal activity? 

The primary use, not the worth of the idea, not the brilliance of the 

technology, not its hope for the future, not the fact that there are 

many legitimate purposes and positive public benefits from publicly 

accessible file-trading systems, but that the primary use is to 

upload and download copyright infringing material? Do you disagree with that, Mr. Saaf’s contention? 

Ms. SOHN. I guess I don’t know—I have not seen enough evidence that that is the case. 

Look, I completely agree with you that networks like KaZaA and 

Morpheus are used a great deal for massive illegal file trading. And 

we do not support that. But, you know, I can’t—I do not know 

enough to say—to agree with Mr. Saaf particularly that that is the 

primary reason. And I’ve seen nothing, actually, in his testimony, 

other than his statement, to know that that’s actually true. 

And I do know, as you point out, that there are many, many, 

many legitimate uses of peer-to-peer technology. It probably will be 

the killer app to drive broadband, as Ms. Lofgren said. And, again, 

please don’t read my statements to condone any kind of massive 

peer-to-peer piracy. 

Mr. BERMAN. Well, we’re making progress. In the next round, 

we’ll continue to try to make more. 

Mr. COBLE. I thank the gentleman. 

I thank you, Ms. Sohn. 

The gentleman from Virginia. 

Mr. GOODLATTE. Thank you, Mr. Chairman. This is an excellent 

hearing. I want to thank all of the witnesses for shedding light on 

this issue. 

Mr. Galdston, I want to especially thank you for putting a 

human face on this issue. We hear over and over again, it’s no big 

deal to download a song of Celine Dion or Britney Spears because 

they’re mega-millionaires and it has a small impact on them. But 

for every one of those instances, there is likely to be somebody like 

you behind them that is making a much more modest living. In 

fact, most songwriters never write a hit, and many may write one 

hit. And if they do, that’s a very modest living for doing that. 

Ms. Rosen, I share your concern about this, too. How many employees are there in the recording industry? Do you know offhand, 

roughly, all the companies that your organization——

Ms. ROSEN. Well, worldwide, something like a couple hundred 

thousand. 

47

Mr. GOODLATTE. And most of those people aren’t making megamillions, are they? 

Ms. ROSEN. And certainly how many employees there are is not 

relevant to how many people’s livelihoods depend on the sale of 

music. 

Mr. GOODLATTE. Absolutely. But most of those people are making 

modest livings. 

Ms. ROSEN. They’re independents, right. 

Mr. GOODLATTE. And the success of their employment is dependent upon the success of copyright laws protecting the ability to 

market these products. 

And so I share your concern. And I doubt that KaZaA moved to 

Vanuatu because it’s a hub of business activity. They moved there 

because there are no copyright laws and so that they could act as 

what I think they are: the home shoplifting network. [Laughter.] 

Now, getting to this bill, I see you have a proposal in legislation 

that would cut those who want to protect copyright loose to do certain things that they’re not sure whether they can do right now 

under current law to protect their copyright. And I see that already 

the opposition is developing countermeasures. 

Do you have countermeasures to their countermeasures? I mean, 

where are we heading with this? 

And I’m going to ask Mr. Saaf in a second what effect on the 

Internet the deployment of all this technology has. That’s one of 

the concerns that I have that I need some reassurance on. 

Ms. ROSEN. Well, Mr. Saaf is certainly going to be more expert 

than I am in talking about what potential countermeasures there 

are for these sorts of networks. 

But on the policy side, I think it’s quite clear that the networks 

themselves offer the dangers that people are concerned about. You 

know, as I said before, you can hack, you can plant viruses, you 

can invade someone’s personal computer right now on all of these 

services because what you do when you sign up is essentially open 

up your computer to the network. And so the fear of the countermeasures are in some respects no match for the threat that exists 

today. 

So I think we want to simply be in a position on a policy basis 

and on a legal basis where, as this expert who I saw submitted testimony from the University of Tulsa, one of the few actual experts 

in information security and file trading said essentially that technological measures are going to have to continue to keep pace with 

the innovations of the networks themselves. And that was John 

Hale, I think, from the University of Tulsa. 

So we have to be in a position in the marketplace where we can 

take steps. And so I am all for the kinds of policy prohibitions on 

what you think people ought not be able to do. But I think the 

fears of what’s possible already exist. 

Mr. GOODLATTE. Let me go to Mr. Saaf then. 

All of these measures and countermeasures and so on, this escalating warfare that may take place—because we can’t reach somebody in Vanuatu to prosecute them as we would like to under the 

laws, so we’re going to deploy these measures—what effect does 

that have on the operation of the Internet and people’s ability to 

access the legitimate things they want to access and so on? 

48

Mr. SAAF. I mean, ironically, the net gain to the Internet is very 

positive. What makes the Internet run is software. Software is 

what drives everything. And when a company like KaZaA, 

Sharman Networks, comes up with countermeasures to our countermeasures, it becomes this cat-and-mouse game much like the 

virus/anti-virus industry. 

At the end of the day, what everybody is left with is a stronger 

base of technology than they started with. This isn’t the first time 

that we’ve seen countermeasures, so to speak, for our technology. 

This is the first time that maybe there’s been a press release on 

it or that, you know, the press decided to hook into this particular 

example. 

But this is inevitably what is going to happen. This inevitably a 

cost of business for our company. But in terms of the idea of that 

harming the Internet in some way, that would be completely off 

base. 

Mr. GOODLATTE. Am I correct that if KaZaA can do that, they 

could also deploy measures to protect copyrighted materials as opposed to things that are in the public domain? 

Mr. SAAF. Yes, absolutely. That’s true. 

Mr. GOODLATTE. If they were so disposed. 

Mr. SAAF. Yes. I mean the idea that—any kind of software product can update itself. Obviously, KaZaA can do massive updates on 

millions and millions of users. You know, you can make it do anything. You can make it not work. You can make it filter stuff. 

Mr. GOODLATTE. They could do it right as well as interfere with 

people’s efforts to protect copyright. 

Mr. SAAF. Yes, absolutely. 

Mr. COBLE. The gentleman’s time has expired. 

The other gentleman from Virginia. 

Mr. BOUCHER. Thank you very much, Mr. Chairman. 

I appreciate the witnesses enlightening us on this interesting set 

of issues today. 

Ms. Rosen, let me begin by asking a couple of questions of you. 

I am somewhat concerned that the indiscriminate use of robots 

could result in some Internet users having their service disconnected even though those users are entirely innocent and have not 

downloaded any unlawful material but simply have entirely lawful 

material, whether it’s in the public domain or whether it’s material 

they’ve paid for, on their hard drive. 

I have a demand letter here, which I think is very interesting. 

I’d like to describe it to you, and get your reaction to it. It is from 

something called the Media Force DMCA Enforcement Center. It is 

directed to UUNet Technologies. It identifies a particular customer 

of UUNet, with the Internet address. And then it makes a demand 

that UUNet disable that connection and terminate the Internet 

service for that particular user. 

It then goes on, on the next page, to identify the material which 

is alleged to be infringing, which apparently the robot revealed in 

its search of the network. And it identifies the file name as ‘‘harry 

potter book report.’’ Now, apparently the robot was searching for illegally download copies of one of the ‘‘Harry Potter’’ movies and 

what it revealed was a book report with a file size of 1 kilobyte. 

Obviously, this was not a downloaded movie. 

49

But the demand was made that the Internet service be terminated for this user. There’s another example where the same kind 

of demand letter was sent to the ISP for a user who had on his 

drive the ‘‘Portrait of Mrs. Harrison’’ in a jpeg format. Obviously, 

that was a photograph. And this was revealed in a robot-directed 

search for illegally downloaded George Harrison songs. 

Now, these are innocent users. And yet, the demand has been 

made of them that their service be terminated. I’m troubled by 

that. I’m troubled by the indiscriminate use of robots that can create that kind of result. 

Now, I don’t know exactly what it is that the industry is seeking 

to have authorized that isn’t authorized under current law, but I 

would have to think that robot searches, intruding as they do into 

computer space, has something to do with it. So what I would like 

to ask of you is your response to this set of examples. Are you as 

concerned about this as I am? And should we as Members of Congress be concerned about what we may be authorizing as an indiscriminate use of robots that could lead to this kind of result, where 

innocent users are disadvantaged? 

Ms. ROSEN. Well, let me say at the outset that we don’t use automated notices to ISPs. We actually look at the evidence first and 

check it before a letter goes out, just to prevent that very thing, 

misnamed files. So I am certainly not going to defend it. I have no 

idea who the copyright owner was that made such a mistake. 

I do believe, however——

Mr. BOUCHER. Well, I guess in both of these examples, it would 

be whoever has the copyright to the ‘‘Harry Potter’’ movies and 

whoever has the copyright to George Harrison songs. 

Ms. ROSEN. I understand. And, you know, it’s like me asking you 

why another Congressman believes what they believe. You have no 

idea. Neither do I. 

So I think the issue that you raise, though, is relevant to the 

DMCA and not this bill. And I think in the DMCA, there are remedies for both that copyright owner and that ISP to deal with that 

problem. 

So I understand the concern, but I think, you know, enforcement 

is just that. It has tools, and then it has remedies for when there 

are problems. 

Mr. BOUCHER. Let me ask you this, what is it that you’re seeking 

to have authorized that current law doesn’t allow you to do? Ms. 

Sohn and several of us have acknowledged that spoofing, decoys, 

redirection, various self-help mechanisms that we know about and 

you’ve discussed are lawful today. 

What is not lawful today that you would like to engage in and 

that the Berman bill would give you the privilege of doing? 

Ms. ROSEN. Well, I have to defer to Mr. Saaf on that. I think the 

issue for us is not so much that there is a technology plan or that 

we know what the situation is. I think when Mr. Berman approached this idea with us, the notion was that we ought to think 

differently about enforcement. We ought to think not about technical mandates on machines, or not about other restrictions on providers. We ought to think about how self-help measures can be expanded and used. 

50

Mr. BOUCHER. Well, Ms. Rosen, let me just say, my time has expired. But I want to make one comment. 

It just seems to me that in the absence of a clear delineation of 

the additional self-help measures beyond what the current law allows that you would seek to have authorized by this bill, that we 

would be better advised to wait until you come forward with a clear 

statement of what those measures are, and then we could evaluate 

each one of those and look at the potential harms that might arise 

from it and make a decision with that particular measure on the 

table. 

That’s really all I have. Thank you, Mr. Chairman. 

Mr. COBLE. I thank the gentleman. 

The gentleman from Florida. 

Mr. KELLER. Thank you, Mr. Chairman. 

And, Mr. Galdston, I want to thank you for——

Mr. COBLE. If the gentleman would suspend. Mr. Galdston, I 

have been advised by my able staff that I have been mispronouncing your surname. I said ‘‘Gladston,’’ I think, and I apologize 

for that. 

Mr. GALDSTON. I only wish that it was the first time that it happened to me in my life. [Laughter.] 

Mr. COBLE. The gentleman from Florida. 

Mr. KELLER. You reminded me that I inadvertently associated 

Celine Dion with Universal instead of Sony, so I will apologize. I’m 

going to go to my room, think about what I’ve done, and listen to 

that darn ‘‘Titanic’’ song yet another 200 times. [Laughter.] 

You didn’t write that one, did you? 

Mr. GALDSTON. I was just going to say, could you please listen 

to one of mine? [Laughter.] 

Mr. KELLER. Okay. 

Ms. Sohn, have you ever personally downloaded a song from 

Napster, KaZaA, or another similar service? 

Ms. SOHN. I have from Napster, yes. 

Mr. KELLER. Okay. You mentioned there’s been a lack of enforcement against these illegal downloaders, so I’m trying to make that 

simpler for them to do, with your admission. [Laughter.] 

I’m just kidding you. I’m sure yours was legal. 

You encouraged the recording industry to bring lawsuits against 

the individual file traders, but you also say that you don’t believe 

that making available copyrighted files for download on peer-topeer networks is an infringement of copyright, correct? 

Ms. SOHN. What I said—what I said was that U.S. law does not 

now include a right to make available. It does not now include that. 

So yes, I guess the answer is yes. But I’m not defending that practice here. 

And what I was concerned about—I mean, my organization is 

generally concerned about the expansion of copyright laws, okay? 

And to the extent that that right is not currently in the law, we 

would be concerned that this law would expand the copyright law 

to include such a right. 

Mr. KELLER. Did you also say that service providers shouldn’t be 

expected to work with copyright owners to identify infringing subscribers absent the filing of a lawsuit? 

51

Ms. SOHN. No, I think I said exactly the opposite. What I said 

was that copyright owners, or at least the content industries, know 

with some reasonable certainty who the big file infringers are. And 

all they have to do to get the name of that particular person is to 

file a John Doe lawsuit and seek a subpoena under Federal Civil 

Procedure 45. 

The problem is if you start just indiscriminately requesting from 

an ISP a bunch of names of file infringers, you have serious ramifications vis-a-vis the privacy and anonymity of ISP users. 

Mr. KELLER. All right. 

Ms. Rosen, she says that the recording industry—‘‘she’’ being Ms. 

Sohn—that the recording industry has never brought a lawsuit 

against individual file traders, and if there’s no enforcement, and 

it’s essentially your fault. So what’s your response to that? 

Ms. ROSEN. Well, I take note that the consistent response to the 

enforcement issue from people who claim to represent consumers or 

technology interests are to sue people. And you know, if that’s all 

that’s left, you know, that’s an interesting scenario. 

I think the point that Ms. Sohn was raising, though, was relevant to actually a dispute that’s going on right now with an ISP 

named Verizon, just a small, little company. Actually, one company 

bigger than our entire industry. 

In Congress, in the DMCA, there was sort of a bargain that this 

Committee struck with stakeholders because ISPs wanted to have 

no liability for copyright infringement and they wanted to not have 

an affirmative obligation to monitor their networks. And obviously, 

copyright owners were opposed to that, and you brought us to the 

table and said, ‘‘No, no, no. We’re going to give them that exemption from liability, but ISPs will be required to help you find the 

direct infringers.’’ That was essentially the original point of the 

DMCA, the original kind of bargain. And now we’re in a position 

where we can’t do that because of people claiming some legal technicalities. 

And so all we keep being left with is massive suits against individuals, which are quite expensive and obviously quite cumbersome, when, if you were in a situation where you could identify 

through the subpoena process contemplated in the DMCA who the 

infringer was directly, you could send them a warning letter. 

Mr. KELLER. Why would you spend $200,000 getting a judgment 

against a 18-year-old kid who can’t pay it? Isn’t that impractical? 

Ms. ROSEN. It may be practical. Certainly, you’re not going to recover the judgment. I think the point that Ms. Sohn is making is 

the, essentially, deterrence factor of lawsuits. But there’s also the 

opportunity for warning through the subpoena process contemplated in the DMCA that you are actually avoiding in this scenario. 

Mr. KELLER. Thank you. I’ll yield back, Mr. Chairman. 

Mr. COBLE. I thank the gentleman. 

I noticed earlier Mr. Berman mentioned Work for Hire. I see a 

familiar face in the audience who did the Lord’s work, helping us 

negotiate those rocks and shoals and reefs. 

Cary, good to see you here. This has nothing to do with P2P, but 

good to have you here. 

52

Well, I hear that bell ringing. Let’s recognize Ms. Lofgren for 5 

minutes. 

And, folks, we’ll have a second round as well, if you all want to 

come back. 

Ms. LOFGREN. Thank you, Mr. Chairman. 

You know, I’d like to reflect back a little bit on where we are visa-vis DMCA. And I’ve been chatting with Members sitting on both 

sides of me about how much the world has changed technologically 

since we did that bill. And I remember the discussion, and I was 

very much involved in it, relative to notice and take-down. And I 

know that none of us were thinking beyond Web sites at the time, 

because peer-to-peer—maybe it was out there, but it was way out 

there. I mean, we were just talking about Web sites. 

And certainly, as the technology has changed, it is complicated 

and made, in some ways, dysfunctional some of what we in good 

faith worked to do there back there a few years ago. 

So that’s neither here no there, except it’s something that we 

may need to revisit in the future to make sure that these things 

actually work in a way that we had originally intended. 

Getting to perhaps unintended issues, I note in the bill itself that 

there is a provision that allows the deletion of files if the consumer 

authorizes the deletion of files. And I’m thinking about how that 

might happen and my—I mean, shrink-wrap—you know, there’s a 

lot of verbiage in shrink-wrap, and I’m wondering if we could imagine a time where inadvertently anybody who buys anything has 

permitted file deletion because of what are really contracts of adhesion. 

Do you have—I mean, have you thought through this, either Ms. 

Rosen or Ms. Sohn? 

Ms. ROSEN. No. I think, on the broader picture, we are currently 

engaged in what we think are appropriate and, as Mr. Saaf said 

repeatedly, noninvasive technologies. I can’t see foresee any scenario where it would be in our interests to try and go into somebody’s computer and delete a file. I think the most anybody is looking for are the ability to do more sophisticated interdictions and 

spoofing and redirection. 

Ms. LOFGREN. So you wouldn’t object if that was just taken out, 

if there was no way to delete a file even with permission? 

Ms. ROSEN. I don’t care. 

Ms. LOFGREN. Ms. Sohn? 

Ms. SOHN. Well, my concern, again, is that we may accept that 

the recording industry and the motion picture industry have the 

means to use more benign self-help. My concern is that this bill 

permits every copyright holder that right to use self-help. 

Probably almost everyone one of us in this room is a copyright 

holder. And not everybody has the means to afford Mr. Saaf’s services. So what you’re going to get is a lot of homebrewed technology. 

I mean, the way I spin KaZaA matter, the fact that they’re starting with their own sort of defense, is that it just makes matters 

worse. It’s escalating a war. I call it the Wild West. You can call 

it a war, whatever. But you’re going to have, you know—and we’re 

not just talking about self-help that exists now. There’s going to be 

future self-help techniques as well, and who knows that they can 

do. 

53

And this bill opens the door not only to what we know now and 

not only to limited expensive self-help, to what may come in the 

future and what may be a lot less costly for copyright owners to 

use. 

Ms. LOFGREN. Yes, Hilary, do you have something to add? 

Ms. ROSEN. I was just going to go back to my earlier point, which 

is, any copyright owner has more liability under this bill than a 

noncopyright owner for doing any nasty thing—— Ms. LOFGREN. Actually, if I can, I don’t think that’s correct, because the remedy provided in the bill is one that could never be, 

in fact, utilized, in my judgment. 

But I have very little time, and the bells are ringing. 

I wonder if I could just ask, before the next round, Ms. Sohn, you 

caution in your testimony about denial of service attacks and other 

things that could essentially impair the functioning of the Net 

itself. Could you expound on that briefly for us? 

Mr. COBLE. Ms. Sohn, if you will, do it quickly because we have 

to go. We have one 15-minute vote and two 5-minute votes, so if 

you can move along. 

Ms. SOHN. Well, the bill—my problem with what the bill permits 

and doesn’t permit is there’s nothing in here that prohibits denial 

of service attacks. And while Mr. Saaf has guaranteed us again 

that his technology does not engage in denial of service attacks, we 

can’t be guaranteed because of the breadth of this bill. 

And even if a person is guilty, okay, is an infringer, and they get 

a denial of service attack, that is likely to affect the entire network, 

including innocent users on that network. That’s particularly true 

when it’s a tree-and-branch shared cable-modem service, and it’s 

also true on any ISP network to the extent that the ISP has to divert its attention, find out what’s wrong. There’s no notice as to 

who did this or why or when. And there could be other things going 

on an ISP’s network that it must now take its resources away and 

deal with the self-help mechanism denial of service. 

So it affects both indirectly and directly other innocent ISP users. 

And they don’t necessary have to people who are on a P2P network. 

Mr. COBLE. I thank the lady. 

Folks, you all rest easy, and we will return imminently to resume this. 

[Recess.] 

Mr. COBLE. We will resume our hearing, folks. I apologize to you 

all. Sometimes these 15-minute votes extend beyond the time 

frame. We’re going to have a second round, but only the gentlelady 

from California and I are here. 

Mr. Saaf, I was going to get you during the first round. Ms. Sohn 

raised questions or concerns that interdiction-type technologies 

might prevent a user from accessing the Internet for any other purpose or that they might burden ISPs or other network users directly or indirectly. Are these concerns justified, in your opinion? 

Mr. SAAF. No. Actually, the contrary is true. Interdiction is a 

participation in the network to download files, like anybody else 

would be participating in the network and downloading files. The 

only difference is, when our company does it, it does it a throttledown download speed, meaning that we’re actually freeing up 

bandwidth resources that would have otherwise gone to the peerVerDate Jan 17 2002 09:45 Nov 05, 2002 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6601 G:\WORK\COURTS\092602\81896.000 HJUD1 PsN: 81896
54

to-peer client. These people are putting files on the public Internet 

space for being downloaded, and if we weren’t downloading them, 

I guarantee all their queues would be filled up by potential pirates 

downloading that material. 

Ms. Sohn, to be fair, do you want to respond to that? 

Ms. SOHN. At the risk of repeating myself, you know, Mr. Saaf 

has the state-of-the-art, most expensive technology to do this kind 

of self-help that there is. And perhaps there are others like him. 

But my concern, again, is that this bill—and again, I do want to 

put the focus back on this bill. This bill would allow a lot more 

than Mr. Saaf’s technology and technology that isn’t so benign and 

technology that actually could bring down an ISP’s network. And 

there’s nothing in the bill either that prohibits denial of service attacks. 

I might feel comfortable if the bill did actually have a prohibition 

or took out of the safe harbor denial of service attacks. But there’s 

no such language in this bill. 

Mr. COBLE. Ms. Rosen, I was going to ask you this during the 

first round, but time caught up with me. In your testimony, you 

mentioned and demonstrated the RIAA’s efforts to educate the public about copyright infringement. Provide some additional details, 

if you will, about these efforts and what degree of success you’ve 

experienced. 

Ms. ROSEN. Well, the first thing I’ll elaborate on is that it’s not 

just RIAA. We’re doing it in conjunction with a significant number 

of partners in the music community: ASCAP, BMI, NARAS, the 

artists’ unions and musicians’ unions, the Nashville Songwriters 

Association, the Gospel Music Association. 

So there are many, many organizations involved. 

We have a series of ads, and I think some educational information for everybody on the Web site, MusicUnited.org. And there will 

be some ad spots, which will begin this evening on different broadcast outlets. 

And actually, I have a tape of that spot, a 30-second spot, if the 

Committee would be interested in seeing it. 

Mr. COBLE. What’s the duration? 

Ms. ROSEN. Thirty seconds. 

Mr. COBLE. Yes, that’s fine. 

Without objection. 

[Videotape presentation.] 

Ms. ROSEN. That was—in the outlets that these spots will run, 

they won’t need—the artists won’t need to be identified for the 

fans. But for the rest of us, Missy Elliott, DMX, Shakira, Britney 

Spears, Nelly, a whole host of diverse artists are involved in this 

campaign. 

Mr. COBLE. Thank you. 

Ms. ROSEN. Thank you. 

Mr. COBLE. Mr. Berman, Ms. Lofgren has a 12 meeting. Are you 

equally pressed for time? 

Mr. BERMAN. I’m chairing a 12 meeting. [Laughter.] 

Ms. LOFGREN. I’m hosting. 

Mr. COBLE. Zoe, if you will, move along and we’ll get to Howard. 

Ms. LOFGREN. I’ll just be very quick, and I appreciate Mr. Berman’s willingness to let just make a couple of comments. 

55

I would like unanimous consent to submit for the record a statement made at the Aspen Summit symposium on digital rights this 

August by the CEO of Roxio. 

[The information referred to follows:]

PREPARED STATEMENT OF CHRIS GOROG

The record companies and movie studios have come to Washington saying, ‘‘the 

illegal shared file services are destroying our business.’’ ‘‘We can’t compete with free 

downloads.’’

An often-overlooked fact in this debate is—they haven’t even tried. 

An illegal service like Morpheus is indeed the ‘‘celestial jukebox’’. One can access 

virtually any song in the world, download it and burn it to CD. A very attractive 

proposition. MusicNet, on the other hand, the service owned by Warner Bros and 

BMG, doesn’t even offer their own complete catalogs... and what they do offer must 

stay on your PC. I haven’t been to too many parties where everybody gathers 

around the computer to listen to tunes. 

The five major record labels are each involved in legal music download services. 

These companies are part of the largest communications conglomerates in the world 

and yet, have you seen a single advertisement for the services they own; MusicNet 

or Pressplay? They could be promoting their services with their movies and television shows, at their retail outlets and theme parks, but instead—nothing. A cynic 

might conclude that they have absolutely no intention of making these on-line ventures successful. 

Why should the Federal Government take seriously the complaints of an industry 

that has almost limitless capabilities and influences on the consumer—that has 

done virtually nothing to compete in the on-line world. 

Michael Eisner recently went to Capital Hill and had a high profile complaint session, ‘‘the movie business will be destroyed, etc., etc.’’ Where is Disney’s on line 

movie service? That’s right. They don’t have one. It’s easy to be destroyed if you 

don’t even show up for battle. 

The incredible irony in all of this is that every major third party study that I have 

read recently points to on line distribution as the savior of the entertainment industry. Imaging turning your back on an opportunity to rip billions of dollars out of 

your cost structures and deliver to consumers exactly what they want, instantly, 

when they want it. 

Instead the entertainment companies have burdened lawmakers with poorly 

thought out schemes like the Digital Millenium Copyright Act which tramples on 

the consumer’s fair use rights and now the Hollings Bill that asks technology companies to become digital policemen. 

So what should Government do? I have two suggestions:

1. Tell the record companies and movie studios to come back to Washington 

after they have actually tried to compete. They were just as fearful of television, home video and DVD and those technologies only dramatically added 

to their businesses. Virtually every industry analyst believes on line distribution will be the same. The entertainment companies must listen to what 

their consumer is asking for; a fun, easy to use, fairly priced on line service 

where they can access anything, and burn it to CD and DVD. The entertainment companies and their artists need to stop fighting amongst themselves 

and—get it done.

2. The Government should do whatever it can to help destroy the illegal shared 

file services. I am convinced the entertainment companies can successfully 

compete against the illegal services with their vast resources, quality 

downloads and creative marketing, but, theft of intellectual property cannot 

be tolerated. It is ‘‘IP Terrorism’’ and extreme measures should be taken to 

eliminate piracy as much as possible.

Ms. LOFGREN. I think one of the issues that we need to ask about 

at this hearing, and really after this hearing, because we floated 

some issues here today, but I think we all know this is a subject 

that is going to be discussed for some time into the future, and it’s 

an important subject. And I think to that extent, this hearing has 

served a purpose. 

56

But I think the lack of competition, it doesn’t excuse illegal behavior. I don’t argue that. But it doesn’t confront it and defeat it 

either. And that is one of the concerns that I have. 

It is true that illegal services, as Chris Gorog pointed out, are 

kind of like the celestial jukebox. But the competing, lawful 

music—digital music distribution efforts haven’t even been advertised. And we’ve seen an advertisement against piracy, which is 

fine. I’ve never seen an advertisement on TV about Pressplay or 

MusicNet, and I sort of wonder why isn’t the lawful alternatives 

being marketed? And why isn’t it user-friendly? 

Chris was mentioning the inability to move—burn CDs and move 

it around on some of these services, and points out that he has not 

been to too many parties where everybody gathers around the computer to listen to tunes. 

I mean, what we need to do is examine the technology efforts 

that are possible, and there are many; to also encourage—and the 

Government obviously mandate companies being successful in their 

endeavor—but to ask for a dialogue about how you intend to be 

successful in this digital environment, because I really think the 

incredible irony is that most of the major third party studies that 

have looked at online distribution see it as the savior of the entertainment business. It is an ability to transmit information while 

ripping billions of dollars of cost out of the structures that currently exist for entertainment and other—it’s not just entertainment. It’s other types of content. 

And I really think that we, hopefully, as the months go by, we 

will have an opportunity to engage in dialogue about what content 

providers, whether it be records, movies, books, or whatever, are 

going to do to market successfully the digital distribution of their 

material. 

And with that, I would yield back my time to the Chairman and 

to the Ranking Member, with thanks and apologies for having to 

leave. 

Mr. COBLE. I thank the gentlelady. And we are on a tight time 

frame. I think Mr. Berman has to Chair a hearing at 12 as well. 

Mr. Wexler, with your permission, I’ll recognize Howard first. 

Mr. Berman? 

Mr. BERMAN. Thank you very much, Mr. Chairman. And I do 

apologize. I have to leave before the end of this hearing. But Mr. 

French and your staff and other Members will be here. 

Listening to Ms. Lofgren’s suggestion, I was wondering if you 

could perhaps promote some of these online music services with 

ads on Gnutella and Morpheus and KaZaA. [Laughter.] 

Targeted advertising. 

But by and large, I tend to think free is even better than cheap 

for lots of people. [Laughter.] 

Ms. Sohn, I gather, from the combination of your testimony, your 

written testimony, you answers to me, and your answers to, I think 

it was Mr. Goodlatte, that you think the distribution of copyrighted 

works on these peer-to-peer systems is wrong but not necessarily 

illegal because of the making-available issue that you spoke to. And 

I’m wondering, then, would you support an effort to change the law 

to make it quite clear that it’s illegal, given your premises. 

57

Ms. SOHN. As I said before, I’m not generally in favor of expansion of the copyright law. On the other hand, I guess what I would 

favor is an educational campaign to let people know that they can 

in fact segregate copyrighted works on peer-to-peer networks. 

One of the assumptions I think that I’m a little bit troubled 

about that I’m hearing at this hearing is that every unauthorized 

file sharing, unauthorized trade of copyright works, is necessarily 

illegal. 

Mr. BERMAN. I don’t think anybody here has said that. They 

have said unauthorized trading on publicly accessible peer-to-peer 

file systems, which are available—you don’t trade to a specific person on a peer-to-peer system. You put it up, and 100 million people 

can have it. They’ve said that unauthorized trading is illegal and 

wrong. Do you disagree with that? 

Ms. SOHN. Well, let me see if I understood what you said. I do 

disagree that every unauthorized trade is illegal. 

Mr. BERMAN. On peer-to-peer—putting something up for trading, 

uploading or downloading, on these publicly accessible systems, you 

don’t think that that’s illegal? 

Ms. SOHN. Again, there’s a fair use right, okay? What if there’s 

a clip? Okay, what if——

Mr. BERMAN. What is e-mail? There are a thousand different 

ways to distribute electronically music within an appropriate fair 

use right without getting into a big debate about how narrow it is 

or how wide it is. 

I don’t know how we get common ground if we can’t start with 

the fundamental assumption that this is something so dramatically 

different than anything encompassed within fair use notions that 

we have to focus—if we can’t accept that premise, there aren’t 

many more places to go together. 

Ms. SOHN. Well, I don’t disagree with your premise. 

I think what I’m arguing is—and maybe I should just sort of get 

off the legal, okay—is a very, very narrow point, and that is that 

not every unauthorized use of a copyrighted work is illegal. There 

are—maybe——

Mr. BERMAN. We know. This is not a novel point. There is a doctrine of fair use, and it applies, and it’s a defense to an infringement case. 

Let me move on. Before my time is up, I want to just deal with 

this. It’s illustrative of what we were trying to do with this bill versus what people are saying about the bill, this ‘‘Harry Potter’’ book 

report. 

The bill only provides a safe harbor for technological self-help 

measures within many constraints done by the copyright owner for 

his own works, not for any other copyright owner, for his own 

works. 

Just taking the hypothetical that two people have mentioned, or 

perhaps it’s not a hypothetical, perhaps it really happened. 

If someone authorized by AOL Time Warner went out to hit the ‘‘Harry Potter’’ book report, I don’t believe AOL Time Warner owns 

the copyright to the ‘‘Harry Potter’’ book report. This would not be 

within the safe harbor. This bill has no impact whatsoever on that. 

You have to only do acts within the safe harbor before we can start 

saying that it allows certain kinds of acts. 

58

So when people raise hypotheticals that have nothing to do with 

this bill as an attack on this bill, it seems to me that we need to 

straighten that logic out. 

Also, denial of service. The reason people are concerned about denials of service is because they cause damage. If a self-help measure causes damage other than the blocking of an unauthorized file, 

it’s automatically outside the safe harbor and is, therefore, not protected. 

So any self-help measures which aren’t within the safe harbor 

are not immunized. And as Ms. Rosen has said, I think now three 

times, there are remedies now against inappropriate self-help 

measures that go beyond the law. Those remedies are all available, 

plus the additional remedy provided for in this bill for conduct that 

isn’t protected by the safe harbor. 

I mean, this was not a bill that the record industry or the motion 

picture industry or some coalition came to me and said, ‘‘Would you 

introduce this bill for us?’’ This was our effort, hearing different 

theories—mandating technology, arguments, criminal prosecution—we said, this has a role to play, too. And the staff came up— I’d like to say I thought of it driving to work, but the staff came 

up with this notion. And we tried to do it in a very balanced basis 

and to make sure we’re only immunizing conduct which is directed 

at trying to deal with a very serious problem, a problem that many 

of the critics either never acknowledge or pass over so quickly that 

it makes me think that they don’t really think it’s a problem. 

And with that, Mr. Chairman, I thank you for your indulgence 

again. And I’ll go off to my meeting. And my guess is, under 

whoever’s leadership, at whatever point, there’ll be additional hearings on this issue. 

Mr. COBLE. I’m confident this will be revisited. 

Thank you, Mr. Berman. 

Now, Mr. Issa and Mr. Wexler still have not appeared on the 

first round, so let me recognize the gentleman from California, and 

then I’ll get to Mr. Wexler next. And then if we have questions for 

a second round, we’ll do that. 

Mr. Issa, 5 minutes. 

Mr. ISSA. Thank you, Mr. Chairman. 

And before I begin questioning, I’d guess I’d like to make an observation, and the observation is it’s a sword that cuts two ways. 

I think up until now our panels have been mostly content providers, mostly people who want to protect their intellectual property, and by definition, mostly support that. I think we have a 3-

to-1 appearance here. 

And I look forward to seeing people from, if you will, other areas, 

such as the consumer electronics manufacturers, the software operating system people, and so on, in a panel either later this year or 

next year, because I think we have to hear from as many sides as 

possible if we’re going to come up with the right guidance for the 

industry. 

However, Ms. Sohn, I’m a little concerned that if you’re complaining about this bill with seemingly absolutely no answers that 

would allow us to deal with a broadly recognized problem, if that 

continues to be a pattern by those who object to self-help and other 

remedies, then I’m afraid what’s going to end up happening is 

59

we’re going to say there’s a problem, there’s only a solution from 

one side, and this body undoubtedly, hearing only one side, will 

adopt that side. 

And I want to be fair to you, to say—maybe I’ve missed it. Maybe 

you have some positive solutions other than an expensive educational campaign, when so far, from what I can tell, my child and 

the millions of other children around the country, you can educate 

them, but if you give them the name of the site, they’ll go there 

faster to get more. I don’t believe that educating those who have 

grown up in a society that thinks that Napster was okay are necessarily going to be effected by us telling them it’s wrong. 

But, please, I look forward to your comments on that. 

Ms. SOHN. Well, I respectfully disagree with you. 

Mr. ISSA. I was hoping you would. 

Ms. SOHN. I’ve given four what I think are very construction solutions, which I believe when used together will limit peer-to-peer 

piracy. 

Now, I would venture a guess that there’s not one person in this 

room who believes that you can completely eliminate piracy over 

peer-to-peer networks or any Internet networks. In fact, the content industries can’t eliminate piracy in the real world. 

I was told by a content industry lawyer the other day, who works 

particularly on Internet piracy issues, she said to me, ‘‘You know, 

the people in Los Angeles are telling me forget about this Internet 

stuff. We’ve got people in Taiwan,’’ and so——

Mr. ISSA. I hope they said China, not Taiwan, if you don’t mind 

my interjecting the exact location. 

Ms. SOHN. Okay. I don’t know for sure. 

But the larger point is, you can’t eliminate it. So the question is, 

how do you limit it, all right? And I’ve given four solutions: enforcement of existing laws, employing noninvasive self-help—I am not 

anti-self-help—promoting competition, and educating the public. 

Now, you know, if Ms. Rosen and her colleagues thought that 

educating the public was so worthless, they wouldn’t be undergoing 

this campaign and having a huge full-page ad in the L.A. Times 

and the New York Times. And frankly, I commend them for it. 

And my organization, which is brand new, is going to seek to do 

the same on the citizen consumer side. I don’t think that those four 

things taken together are worthless. I think, actually, if they start 

to percolate, we could have some positive solutions. 

My concern is, and this has always been the concern, that in the 

effort to stop piracy, you harm legitimate uses of computer technology and consumer electronics. That’s what I care about. I care 

about innocent users getting hurt in the crossfire. 

And that’s my concern with this bill, is that it permits that. Can 

this bill be saved? I don’t know. Again, to use a phrase I said to 

the Chairman, the devil is in the details. 

And something that’s much more narrow—I respectfully disagree 

with Mr. Berman, this is not a narrow bill. There are loopholes in 

this bill that you could drive trucks through. And the fact of the 

matter is—and my biggest problem with this bill is that it shifts 

the burden, okay? It shifts the burden of using these techniques—

okay, the content industries have been using them very sparingly 

60

and very cautiously. In fact, when you ask Mr. Saaf who are his 

clients, he won’t tell you, okay? 

But by giving them this safe harbor, it shifts the burden on to 

consumers to start bringing lawsuits. And the fact of the matter is, 

unless there’s a huge amount of damages, consumers are not going 

to bring lawsuits. They’re not going to sue. And that’s my concern, 

is the shifting of the burden. 

Mr. ISSA. Okay. And I guess I’ll just shift for one quick one. 

Mr. Galdston, I guess what I’d ask you is, you know, you’ve been 

fairly silent. No one seems to ask you any questions. But you’re the 

person who gets ripped off. 

My question to you really is, can you tolerate the status quo? 

And if not, would you agree that the industries that facilitate it 

need to do more or we need to act? It’s a tough question. [Laughter.] 

No, it’s not, with all due respect. No, we can’t tolerate the status 

quo or I wouldn’t be sitting here. I could be writing a song right 

now. 

In my testimony, I did my best to distinguish the people who I 

unofficially represent from the business, the record business, 

through whom we earn a fair amount of our money. 

What I hear here that is so disturbing is, I appreciate the refinement of the bill. I even appreciate the phrase ‘‘the devil’s in the details.’’ Not a bad title, by the way. [Laughter.] 

But it seems to me that what this bill, as I understand it—and 

I’m not a lawyer and I’m, once again, not saying it can’t be improved. But what it does that I’m aware of is, first of all, it draws 

a line that hasn’t been drawn before. And it says that, across that 

line, there’s a safe harbor for us as we try to protect or defend ourselves. 

At the same time, that safe harbor lowers our liability or clarifies 

our liability. At that same time, it increases our liability should we 

make any mistakes, should me make egregious moves. 

I appreciate what Ms. Sohn has to say, for example, about not 

shifting the burden to the consumer. But if we’re trying to balance 

here, tell me who the burden is on. The burden is on us. We are 

the ones—talk about fair use. I mean, I can roll out the phrases. 

Fair use? Is it fair the way it’s working right now, meaning the 

download system? Or talk about killer app. Well, who is it threatening to kill? The people in our position. 

So I will admit right out in front, not being an attorney, that 

there’s a balancing act here. But as for accepting the status quo, 

absolutely not. I can’t see how it’s going to work. 

Mr. ISSA. Thank you. 

And thank you, Mr. Chairman. 

Mr. COBLE. Thank you, Mr. Issa. 

The gentleman from Florida, Mr. Wexler? 

The gentleman from New York, Mr. Weiner? 

Mr. WEINER. Thank you, Mr. Chairman. 

I have a question that’s part public relations and part technical. 

Most of the popular shareware programs or the popular peer-topeer programs allow you to turn off the ability of someone to come 

in and download from you. And we’ve got that chart up that talks 

61

about the dangers that are created by allowing people to come in 

and look around your computer. 

It might be a better, frankly, public relations way to approach 

this thing to scare the bejesus into people to switch off the ability 

to download off their computer. You know, essentially go and say 

zero downloads is the amount; I don’t know now you do it on the 

different programs. ‘‘Zero uploads that I’ll permit from computer.’’

If you can scare enough people into it, it doesn’t matter if the 

peer-to-peer network keeps working. If people are so frightened 

about the idea—in fact, deluge the market so that—every time I 

open up my mailbox, I get a CD-ROM from AOL offering—you 

know, deluge the marketplace with software to protect yourself 

from having anyone come in to look at it that automatically activates the turn-off switch on all of your things. 

So I have a—by the way, I should tell you that over the break, 

Mr. Chairman, I was alarmed to learn that all of this talk about 

‘‘Harry Potter’’ book reports on the Internet has led to a flurry of 

sixth graders searching for them. [Laughter.] 

Teachers and principals everywhere are chagrined that a book 

report is available to be shared. 

But if you can just, Ms. Rosen, perhaps talk about that as a 

hand-in-hand effort to your ‘‘don’t do it because it’s immoral.’’ I 

mean, let’s scare folks. 

And then I’m going to ask about the technical ability to maybe 

do that somewhere outside the person’s computer. You know what 

I’m saying? Like somehow figure out a way that you’re not going 

into my hard drive but you’re creating some kind of a wall or a filter. 

But first on the public relations side, because that’s something 

that we all kind of fear, that someone is coming in and looking 

around my computer anyway. If we can figure out a way to convince people to just switch it off, so you still have your stuff in 

there technically but you’re not—because I always wondered my 

more people didn’t do that, you know, just say, ‘‘All right, I’ll take, 

but I’m not going to give.’’

Ms. ROSEN. Well, it’s funny you should say that. And I should 

clarify. We’ve stopped telling people this is immoral because, as 

politicians know, if you try and convince people of right versus 

wrong, they have to be starting from the same set of value judgments that you’re starting from. 

What we discovered more recently than we should have was that 

people don’t really want us to tell them whether it’s right or wrong. 

What they want us to tell them is whether it’s legal or not. 

And that’s what we have started to do. 

But as part of this campaign, we have a component which we call 

‘‘check the box,’’ because everyone of these services, these client 

softwares that you download into your system, essentially give you 

the option to not share—‘‘share,’’ in quotation marks—your music 

or copyrighted files, more importantly, or any of your files, your 

bank accounts, your personal book reports, anything you want to 

protect. 

Mr. WEINER. Under KaZaA, just so we understand each other, 

you can have entire programs that are downloaded to you to a CD, 

62

right? You can have entire programs from your computer taken 

down, not just individual songs. 

Ms. ROSEN. Once somebody opens up the hard drive to these networks, they’ve already violated their own privacy. They’ve taken 

that into their own hands. 

Mr. WEINER. So you’re already looking at doing that on the public relations front. 

Ms. ROSEN. So checking the box is an important component. But 

the bigger picture I think is—and maybe this is a public relations 

issue as well. We’re in the position, as Mr. Issa said, where we get 

platitudes—and this is no offense to Ms. Sohn, who I think is 

smart and articulate. But we get platitudes from people about how 

they’re worried about the margins of the abuse. But everybody 

agrees that, you know, illegal downloading is wrong and the stealing isn’t right and copyright owners ought to be able to deal with 

their infringement. 

Everything that we try and do, though, gets fought by this community. 

Mr. WEINER. I don’t think anyone would fight—I shouldn’t say 

that. I imagine it would be very hard to argue that you should fight 

an individual’s choice to switch it off. So I think that’s something 

you should continue to put—Mr. Saaf, if in the few moments that 

I have remaining, can you tell me, technically—your statement was 

a little bit vague and maybe that’s because you want to kind of operate without really people knowing how to countervail what you’re 

doing. 

But is there a way to do kind of what we do with viruses but 

kind of one step away from my computer somehow? Is there some 

way to—I mean, I’m a little creeped out by the idea that Sony or 

someone else is going to come in and start poking around my computer and say, ‘‘I don’t like what you’re doing here.’’ Is there some 

way to keep that relationship kind out in the ether a little bit 

more, to stop these transactions from happening in a way that perhaps can assuage some of our concerns about our piracy? 

Mr. SAAF. There’s no way to practically do that without individuals actually agreeing to put something on their computer. 

If individuals who ran these peer-to-peer programs agreed to run 

some sort of program on their computer that could turn off the 

sharing, so to speak, yes, that could be done. 

Mr. WEINER. Do you have the ability to write a program that will 

go into my computer and press the button? 

Mr. SAAF. No, not without either putting it on your computer or 

tricking it onto your computer. There has to be some way to get 

the program on your program to actually change the settings. 

Mr. WEINER. You download a program that’s a spoof that includes it a little microprogram that turns off the switch, that’s not 

technologically possible? 

Mr. SAAF. It certainly is. It certainly is. I mean, that might be 

the type of thing—but that’s not the type of thing that we engage 

in. The main reason for that is that we only participate in the peerto-peer networks according to the rules of the peer-to-peer network. 

If the peer-to-peer network allows searching, we might do something to try and affect the searching. If the peer-to-peer network 

allows downloading, we might and try and do something that alVerDate Jan 17 2002 09:45 Nov 05, 2002 Jkt 000000 PO 00000 Frm 00066 Fmt 6633 Sfmt 6601 G:\WORK\COURTS\092602\81896.000 HJUD1 PsN: 81896
63

lows downloading. Actually putting a program on somebody’s computer, you know, that might overstep some bounds. 

Mr. WEINER. Got it. Thank you. 

Mr. COBLE. I thank that gentleman. Are you through Mr. 

Weiner? 

Mr. WEINER. Yes, sir, unless there’s a chance for another question. 

Mr. COBLE. Thanks, sir. 

All right, the gentlelady from Pennsylvania. I say to her, we are 

still on our first round. 

Ms. HART. Wow. Thank you, Mr. Chairman. 

And I’d like to echo also the comments of a number of the Members in their opening statements, that your leadership in this Committee, even though I’ve only been here a brief time, has been fantastic. 

Mr. COBLE. Thank you. 

Ms. HART. And I expect that you’ll still be a leader on these 

issues. 

Mr. COBLE. Thank you. 

Ms. HART. A number of universities and colleges are located in 

the communities that I represent and also around the communities 

that I represent. I’m from the Pittsburgh area. 

And they’ve expressed concern to me regarding the use of peerto-peer services in their networks, on their networks. They say that 

the amount of traffic that these services have slows the university’s 

network and that downloading of these files takes large amounts 

of space on the university’s computers. 

Can any of you speak to the impact that these networks have on 

universities in particular, and any efforts that you may be making 

to reduce the amount of file sharing on their networks? And I 

would assume not all of you would have an opinion on that, but 

those of you who do, I’d welcome it. 

Ms. ROSEN. Well, we’ve been spending a lot of time lately working with university leadership around the country for this very reason, because—in fact, they come to us with this notion of how do 

you find the balance between allowing their students to use their 

broadband capacity and their networks for legitimate uses but still 

prevent the massive amount of disruption that they are experiencing. 

And they are experiencing massive disruption because of 

downloading copyrighted music and movie and videogame files, not 

because people are overwhelmed with an amount of fair use uses 

of scientific and technical journals. That’s not what they’re saying. 

They’re saying they have a problem because of the stealing. 

And there are solutions, but they’re entirely within their control. 

They can deal with filtering their own network. They can deal with 

policies regarding use for their students. And they can deal with 

technologies that protect their own systems. 

And I think more and more we’re hearing that universities want 

to begin to employ those systems because of the costs associated 

with the burden on the network. 

Ms. HART. Your involvement, then, has more or less been that 

they have asked—— Ms. ROSEN. Yes. 

64

Ms. HART. They’ve shared with you basically that there’s a problem. 

Ms. ROSEN. They know their students are violating the law. 

Ms. HART. Right. 

Ms. ROSEN. They know that their students are at risk legally. 

They know that there is a secondary liability that extends to them 

if they don’t take steps. 

But I think more importantly is—which is why I think they come 

to us to try and figure out whether we have tools to offer them. 

But I think more importantly, they feel it’s in their own self-interests because of the points you raised. They’re concerned about 

their own costs and burdens. 

Ms. HART. Okay. So you’ll continue that cooperation with them 

as well? 

Ms. ROSEN. Yes. 

Mr. GALDSTON. Ms. Hart, may I just add something to that? 

Ms. HART. Sure. 

Mr. GALDSTON. Anecdotally, I’m sure we’re all aware of some of 

these issues at universities, and I don’t have anything much to add 

about that. But I would draw your attention to a statement that 

I can’t quote verbatim, but released by the administration at USC 

recently to its students as they started the fall term, clearly explaining to them, clearly attempting to draw the line and educate 

them as to what is legal and what is not legal, what is authorized 

and what is not authorized. 

I think as we try to balance education—and I can tell you, not 

in this capacity, but I’m very involved with ASCAP, I’m a trustee 

of the Recording Academy. We’re all working on education programs. We participated in the program that Ms. Rosen talked 

about. 

But we’re looking for this balance once again, and this is the key. 

It’s great to tell everybody that it’s bad. And it’s important. It’s essential. It’s what I said in my statement; it’s what I tell my children. 

But we have to be looking for other measures to protect ourselves 

or help us help ourselves. 

Ms. HART. Did you say it was USC? 

Mr. GALDSTON. Yes. 

Ms. HART. Okay, good. We’re going to have to follow up with 

them after a term and find out if they see any difference in the 

problems that they’ve had. 

Mr. GALDSTON. Yes. 

Ms. HART. That will be interesting to see. 

Carnegie-Mellon is near me, so we have a lot of students who 

clearly have a lot of talent. [Laughter.] 

It’s been a bit of a problem, actually, as a result. 

I have a question specifically for Ms. Sohn. I have very little 

time, but it’s regarding the comment in your testimony: peer-topeer networks, that copyright enforcement measures may seriously 

tax them by making them less efficient and more unstable. I agree 

that there’s a great potential in this kind of technology, but I’ve 

been told about and I’ve also seen the amount of illegal materials, 

as we’ve discussed today, infringing on content, having pornography appear, and other things that shouldn’t. 

65

Isn’t this content seen as being equally taxing on the legitimate 

potential of these networks? Do you see that as a problem? And 

how is this activity, the legal activity especially, contribute to the 

efficiency and stability of this peer-to-peer technology? And isn’t it 

possible that effectively deployed countermeasures in the long run 

might help to cleanse these networks of the illegal activity and actually facilitate a positive and legitimate use of that technology? 

Ms. SOHN. I agree with your initial assessment. I mean, you 

know, the fact that there is a great deal of illegal activity and the 

fact that—is actually harming these networks. I mean, not only 

from a technological perspective but also really from a public relations perspective. 

I mean, one of my concerns is that, you know, the focus is so 

closely on abuse here, that sometimes, you know, the good uses of 

these networks are not seen. 

The problem with engaging in self-help, particularly of the 

kind—the invasive kind that I talk about, is that it escalates the 

bad network activity and invites more. It invites more defense. 

Again, KaZaA is already starting to do that. 

So I don’t think, you know, while I think that a lot of illegal activity is not helpful for the network, okay, I think if you continue 

on with more self-enforcement and anti-self-enforcement and antianti-self-enforcement, that will even make the networks less stable 

and less viable. 

Ms. HART. Okay, I see my time is up. Thank you, Mr. Chairman. 

Mr. COBLE. Thank you. 

Ms. ROSEN. Mr. Chairman, I know Ms. Hart’s out of time, but 

could I just respond to that for—I’ll try and be really brief. 

Mr. COBLE. Okay. We’re going to have a vote in about 20 minutes, but go ahead, Ms. Rosen. 

Ms. ROSEN. Well, I just think that the point that was just made 

by the Congresswoman and Ms. Sohn is so relevant to the problem 

here, which is that these networks, you know, they’re not trying to 

solve their problem. They’re trying to facilitate their use and gain 

more users by doing measures like that. 

So if all of the people who were so worried about maintaining the 

good uses of these networks and the purity of these networks 

would put as much pressure on Sharman and KaZaA to clean up 

their act as they put on us against our efforts, this problem would 

be dramatically different. 

Mr. COBLE. I thank the lady. 

Let’s try a second round folks. As I said, that bell is going to ring 

in about 20 minutes. 

Mr. Saaf, we have circuitously discussed this question. Let me 

try to put it to you in maybe clearer terms: How can peer-to-peer 

piracy prevention technologies ensure that only unauthorized uses 

of copyright material are prevented without also preventing legitimate file sharing? 

Mr. SAAF. Yes, that’s a very tricky question. There are certainly 

many, many identifiers a file has on a peer-to-peer network. That 

example that was presented by Mr. Boucher I felt was a very peculiar example because, you know, automatically, you’re not going to 

flag things that are text files or flag things that are not MP3s or 

not movie files. That’s just almost silly. I don’t really understand 

66

how that example even—that’s, I think, maybe a one out a million 

situation. 

There are things from file name identifiers. Oftentimes file name 

identifiers are a great way to, you know, get through it, because 

most things labeled ‘‘Harry Potter’’ on the network are, indeed, 

‘‘Harry Potter.’’

Obviously, file type identifiers are very important. File size identifiers are very important. But even cutting through all of those, all 

the peer-to-peer networks have different types of hashing technology that they use within their network to identify files so that 

they can splice those files together, so that they can do all their 

magic behind the scenes. 

Those same types of things are available to companies like ours 

to identify files to extreme certainty. 

Mr. COBLE. I thank you. 

The gentleman from Virginia. 

Mr. GOODLATTE. Thank you, Mr. Chairman. 

First, let me assure the gentleman from New York that there is 

software on the Internet available to all those teachers to search 

out the book reports. [Laughter.] 

So it’s probably not a very copyright——

Mr. WEINER. I’ve got my money on the sixth graders. [Laughter.] 

Mr. GOODLATTE. The University of Virginia has had a big to-do 

about that. 

Let me ask Ms. Rosen and then Ms. Sohn, Congressman Boucher 

suggested a modification to this legislation that I would not agree 

with, that I would be concerned about, where he said, list the specific things you want to do in the legislation, and then we’ll review 

those and approve it. I think that’s a very bad idea because the 

technology changes so rapidly that you couldn’t possibly expect the 

slow-moving Congress to keep up with those sixth graders or anybody else that is developing technology to enable people to use this. 

But what about some parameters that address some of the concerns that have been raised today? Are there some things we could 

say, in this bill, ‘‘Don’t do this particular thing’’? 

Ms. ROSEN. I would certainly support whatever narrowing of the 

carve-out that people think are appropriate to guard against the 

sort of attacks that people seem to be so worried about. Although, 

again, I point out, that can exist today and it shows up. 

But I think the problem with going the route that Congressman 

Boucher says is almost like saying, ‘‘Well, for assault laws, we’re 

not going to say you’re not allowed to hit somebody. What are statutes are going to say is: You have to kiss. You have to be nice. You 

should hug.’’

It doesn’t—there just aren’t enough things and ways to talk 

about what you ought to do. What Congress’ responsibility, I think, 

ought to be is to delineate the things that you don’t think ought 

to be allowed. 

Mr. GOODLATTE. Right. I agree. I agree. 

Ms. Sohn, do you have some specific things that you’d like to see 

in this bill that, say, we should not do? 

Ms. SOHN. Well, there are a lot of parts of this bill that—clearly 

that are problematic and in my written testimony. 

67

But just to sort address the point of being specific, I guess I don’t 

have as much of a problem with being specific because you can always write into a bill a review, a subsequent review, to, you know, 

look at new technologies. The Federal Communications Commission does that all the time. They do it, for example, with universal 

service. 

So if you actually list the self-help techniques, it doesn’t mean 

it’s frozen there if, you know, include some sort of periodic review. 

You know, I’m not opposed to some sort of——

Mr. GOODLATTE. Let me interrupt you on that point and say, instead of having to update this every time technology changes, what 

if, initially anyway, until we found out whether some of the concerns expressed were correct, what if we had a sunset provision in 

this bill, so that it was allowed for a year or 2 years or something, 

and then come back one more time for reauthorization following 

that sunset? But not to look to try to always come back forever and 

say, ‘‘We’re going to list these specific technologies, and we’re going 

to update them and change them,’’ and so on every time we do it. 

Ms. SOHN. Well, that’s, you know, that’s another way to go about 

it. I mean, a third way to go about it is just to really, you know, 

narrow the definition, if you can even do it technologically, and I 

don’t know, of some of these self-help techniques. Instead of naming them particularly, you know, talk about the actual 

functionalities of the technology. 

I mean, like I said, my organization, you know, will not support 

safe harbors for technologies that are invasive. Reasonable, 

noninvasive, don’t lead to denial of service, then, you know, we can 

start to talk. 

Mr. GOODLATTE. Well, if you have any specific things along that 

line of parameters, please submit them to the Committee. 

Ms. Rosen, what do you think about a sunset provision? 

Ms. ROSEN. I can’t speak for everybody, but I think it’s a very 

interesting idea. It’s something—we certainly think this whole 

thing is an experiment, so——

Mr. GOODLATTE. Let me ask one other question that’s related 

very much to this. I understand the issue in the Recording Industry Association of American case with Verizon, one of the issues is 

whether a provision in the Digital Millennium Copyright Act that 

provides and expedited process for ISPs to turn over subscriber information for alleged infringers applies to peer-to-peer files, file 

sharing. 

When Congress passed the DMCA, we intended that provision to 

provide the copyright owners with quick access to this information, 

so they can go after the infringers directly and take the ISP out 

of the middle of the process. If the court finds that the DMCA does 

not apply in this situation, and I think it should, should the law 

be updated? 

Ms. ROSEN. I can’t get away from this issue. [Laughter.] 

You know, I think, actually, the Verizon dispute is very relevant 

to your last question, because what we’re sort of faced with is, 

we’ve had a great relationship with the ISPs for several years after 

the DMCA passed. I think even they would say we were careful 

and thoughtful about the kinds of things we asked them to do. 

68

But what happened when the DMCA was written was that it 

said—it was technology-specific. So it said, you know—at the time, 

all the files—nobody had enough capacity on their computers. All 

the files were always hosted on the ISP’s server. It wasn’t that that 

was a deliberate strategic policy decision to write the bill that way. 

That’s just how the technology was working then. 

And so that’s what the bill says, that when the, you know, the 

ISP has the responsibility when the file is on its server to give the 

name of the person who posted the file on their server to the copyright owner. Now that the file’s not sitting on their server, but 

they’re still their customer, they’re still providing the exact same 

access, Verizon and others are taking the position, ‘‘Well, it’s all 

different now, because that’s not what was intended.’’

But I believe it is what was intended. It’s just that the files are 

technically in these peer-to-peer networks, sitting on an individual’s computer instead on the ISP server. But everything else is the 

same. 

So the ISP’s logic about privacy doesn’t really fly, because they 

would be—they would give us the name if the file were still hosted 

the way it was a few years ago. And in fact, they did give us the 

names then. 

So it’s very unfortunate, an unfortunate result of statutes being 

too technologically specific. 

Mr. GOODLATTE. Mr. Chairman, I see my time has expired. 

Thank you very much. 

Mr. COBLE. The gentleman’s time has expired. 

The gentleman from New York. 

Mr. WEINER. Thank you. 

Ms. Rosen, I just, as we’ve been speaking about this, been jotting 

down the things I think consumers are looking for as a way to 

wean them, and I’m sure you’ve been spending an enormous 

amount of time thinking about this as well. I’m just going to go 

down this list of six or seven items, and if you can just give me 

a yes or no, do you think the industry has found a way to package 

it to essentially compete with the things that the——

Ms. ROSEN. I promise you, there’s no yes or no on these, but go 

ahead. 

Mr. WEINER. I bet you there is. I bet you there is. 

Speed? Is the speed of download that’s offered at the sanctioned 

sites comparable or better than what’s being offered on KaZaA’s? 

Ms. ROSEN. Yes, because speed relies on the person’s Internet access. 

Mr. WEINER. Right. I understand. 

Reliability? When you go to click on something, it’s going to be 

the song that you think it’s going to be? 

Ms. ROSEN. Yes. 

Mr. WEINER. Can you get the old stuff? 

Ms. ROSEN. Sometimes. 

Mr. WEINER. That’s a no. 

Ms. ROSEN. Sometimes. 

Mr. WEINER. I’m just giving you some working notes on when 

you go back to the shop, to figure out how far you are, because I 

happen—you know, I’m doing this because I think that, frankly, at 

69

the end of the day, whatever tools we give you, the marketplace 

has to be persuaded. And this is what—— Ms. ROSEN. I agree. 

Mr. WEINER. You’ve come to the conclusion as well. 

Ms. ROSEN. And I say that frequently. 

Mr. WEINER. Right. 

Security? You’re probably yes, you’re much—your probably much 

further along in security concerns than the other guys are. 

Ease of billing? Is it a relatively easy matter when someone goes 

onto one of these sites? I mean, is billing fairly easy? 

Ms. ROSEN. The billing is much easier, but it’s not quite as easy 

on KaZaA. [Laughter.] 

Mr. WEINER. I bet. 

The ability when you download something to put it onto a CD? 

Can you do that with your services? 

Ms. ROSEN. Often, but they’re tiered. You buy certain services 

and maybe you pay an extra $.99 if you want another track. 

Mr. WEINER. Bad idea. Bad idea. Pain in the—you’re making— it’s a pain in the neck. [Laughter.] 

Reasonable price? Like, what does it cost if I wanted to respond 

to this idea that there’s only one good song on a record, what would 

it run me, if I buy a package of 10 songs or however you do it? Is 

it about a buck, you said? 

Ms. ROSEN. Well, most now are subscription services where, you 

know, it’s anywhere from $10 bucks to $25 bucks a month for all 

you can listen to, so it depends. 

Mr. WEINER. Okay. And do they go puff at a certain point and 

disappear from your hard drive? 

Ms. ROSEN. Depends on what you pay for. See, it actually works 

like the real world works, which is, depending on what you want, 

you have choices about your purchasing packages. 

Mr. WEINER. Right. But I want to get——

Ms. ROSEN. But the real issue that we haven’t gotten to, which 

I think is the point you’re making, is, there’s not enough of the legitimate content on all of the sites in all of the various ways consumers want it. 

Mr. WEINER. I was leaving that one to the last, the element that 

one-stop shopping is not anywhere close to be—— Ms. ROSEN. But I think we’re quite close. 

Mr. WEINER. Okay. Well, let me just tell you, I think that, you 

know, I happen to agree with the tenet of what Mr. Berman has 

argued that we need to facilitate this stuff. But there has to be a 

recognition—and I sense from you that it is, and I’ve sensed from 

other folks in the industry that there is—that you’re still putting 

a pretty hasty product out there to compete with something that 

is not only pretty good but it’s really cheap. 

So I think that in addition to making the argument that it’s illegal, in addition to making the argument that it’s immoral, in addition to trying to figure out technological solutions, the real way to 

slay this beast is the way, frankly, this industry is evolved, and 

that is that you just come up with a better enough mousetrap. You 

add content, or whatever it is. And I’m sure you’re thinking about 

this, but I think, still, that should be the focus, making the better 

product. 

70

And if I can just conclude by finishing up with you, Mr. Saaf, 

about technology. Virus software that stops viruses from coming 

in——

Mr. SAAF. Yes. 

Mr. WEINER. You install, essentially, something on your hard 

drive that looks at information that comes in from without and 

tries to make an assessment whether a known virus is there. 

Mr. SAAF. Right. 

Mr. WEINER. Okay. From my just brief understanding of this—

and you have been remarkably kind of circumspect about it. I 

mean, I still can’t get my hands around what it is you do. 

From my understanding of this, it’s essentially a virus software 

program that stops things that are not supposed to go out or in 

from going in or out. Is there a way to do that at the ISP level? 

Mr. SAAF. Well, there certainly is a way. I mean, you know, the 

difference between virus software and what we’re talking about 

here is that people choose to install virus software on their computer. And this is sort of—I draw the analogy to the virus/antivirus industry, but it’s almost the opposite. 

Mr. WEINER. Right. 

Mr. SAAF. At the ISP level, there may be. I mean, to be honest, 

I haven’t done a lot of technology research into that. 

Mr. WEINER. You know, I’m about ready to ask that you be 

sworn in. I don’t know what the heck it is that you do. [Laughter.] 

Mr. SAAF. Well, I would be glad to—I mean, I have two examples, basically, that I came here with, and that’s decoying—obviously well-understood, create a needle in a haystack situation. And 

then the other technology I wanted to lay out as an example was 

indirection, which interdiction means that you have—you know, 

that pitcher is the potential uploader, and he has five upload slots 

on his computer, and MediaDefender tries to fill all five of those 

upload slots, preventing the potential pirate here from being able 

to get in line to download the material. 

Mr. WEINER. I see. So it’s essentially an elaborate decoy program. 

Mr. SAAF. Yes. It’s using the peer-to-peer network exactly as it’s 

intended to be used. That’s why I make the point that, if we 

weren’t downloading it, somebody else would be. And we do so at 

a throttled down download speed, so we’re not being—we’re being 

less aggressive on the person’s computer than the peer-to-peer network would be naturally. 

Mr. WEINER. Got it. So it’s the equivalent of having a moving 

roadblock, where you essentially slow things down and eventually 

someone says, ‘‘I’m going to get off this service and try another 

one,’’ and they eventually get frustrated. 

Mr. SAAF. And the reason it’s important is it’s like putting your 

finger in a whole in a dam. If you don’t do something like that, you 

have this, boom, exponential growth of the pirated material. And 

even by the time you get that one guy to take it off his computer, 

50 guys are sharing it up. 

Mr. WEINER. Got it. 

My time has expired. 

Ms. Sohn, you don’t have a problem with that, do you? 

71

Ms. SOHN. Well, one of the things that I do have a problem with 

is, when he’s blocking—— Mr. WEINER. Can you speak into the microphone? 

Ms. SOHN. I apologize. 

When he’s blocking the infringing file, he’s also blocking the entire rest of that person’s hard drive, okay? There’s no such thing 

as selective—— Mr. WEINER. He’s blocking the outgoing veins of the operation. 

Ms. SOHN. No, no, no. No, no, no. The incoming. 

Mr. WEINER. Incoming, outgoing. Irrespective of that, he’s taking 

existing lanes that are available on these things and essentially 

filling them up. Isn’t that just essentially an elaborate decoy or 

something like that? 

Ms. SOHN. Well, no, my understanding about how decoy and 

spoofing and the like works is that a downloader has to affirmatively take an action, okay, to get a file, to get an illegal file, and 

then they get something that’s other than that, okay? With what 

Mr. Saaf does with interdiction, there’s actually a third party—I 

don’t like to use this because this it is rhetorical, but it’s the best 

word I can come up with right now—is actually attacking your 

hard drive. 

And from what I understand, and Mr. Saaf and I have a very 

long discussion on the phone last week, is that you can’t just block 

one file. You’ve got to block the entire hard drive, and the person 

can continue to—tell me if I’m wrong; I’m not a technologist—the 

person can continue to download, but other people can’t access 

their file—their hard drive. 

Mr. SAAF. The first thing I would say is that uploader certainly 

is taking an affirmative action. To say an uploader, somebody who 

is providing stuff for uploading from them, they are certainly making the decision to run that program on their computer. And like 

you made the point, they can check that box, if they don’t want 

people uploading. So that have made a decision. 

We’re also making a decision to download from them, like anybody else would be downloading from them. We’re not hindering 

any of their other uses of the Internet. They can still do their email, Web browsing, all that great stuff. We don’t use up a lot of 

bandwidth. They can even still download pirated material on the 

peer-to-peer network while we’re indicting them. 

The only thing that’s inhibited is their ability to upload to that 

peer-to-peer network. 

Mr. WEINER. It sounds like hoisting them on their own petard, 

no? 

Ms. ROSEN. Yes. 

Ms. SOHN. Well, except——

Ms. ROSEN. Exactly. 

Ms. SOHN. Unless the hard drive includes——

Ms. ROSEN. That’s what it is. 

Ms. SOHN. Unless their hard drive includes noninfringing material. 

Mr. WEINER. But the hard drive isn’t—it’s kind of the vein to the 

outside world is being clogged, not their hard drive. It’s essentially 

using, you know—anyway. 

Thank you, Mr. Chairman. 

72

Mr. COBLE. Thank you, Mr. Weiner. 

Folks, let me—— Ms. ROSEN. Mr. Chairman, I’m so sorry to do this, but my lawyers won’t let me come home if I don’t do this. 

Mr. COBLE. All right. 

Ms. ROSEN. I misspoke about the Verizon piece. The identification portion of the DMCA, Mr. Goodlatte, doesn’t distinguish between where the files are hosts. It’s the takedown provision that 

makes that distinction. And the dispute is over whether the identification provision should be interpreted differently than the takedown provision. 

Mr. COBLE. Now your lawyers will permit you entry into the office, Ms. Rosen. 

Ms. ROSEN. Thank you. 

Mr. COBLE. Folks, let me think aloud for a minute. I want to 

thank the panelists. I want to thank the very patient people in the 

audience who have stood with us. 

It is my belief that many people who illegally download, who 

commit piracy, larceny, call it what you will, most of these people 

I don’t believe would go into a department store and steal a towel 

set or go into a hardware store and steal a saw and a hammer. But 

am I missing something when I say it still comes under the same 

heading of larceny? I think I’m not missing it. I think it’s larceny. 

And, folks, I’m concerned about this. I think this has been a good 

hearing. I appreciate the interest that you all in the audience have 

shown. 

Without objection, I want to introduce into the record Mr. Conyers’ statement, Mr. Hyde’s statement, and an article that appeared in yesterday’s Washington Post entitled, ‘‘Burned by CD 

Burners.’’ It was authored by a person who formerly operated a 

record store in California. And he wrote in his article, ‘‘Competing 

against rivals, even against huge national chains, is one thing. But 

no one can compete against free.’’ [The prepared statement of Mr. Conyers follows:]

PREPARED STATEMENT OF THE HONORABLE JOHN CONYERS, JR., A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF MICHIGAN

Peer-to-peer networks have numerous uses in education, research, professional development, and entertainment, but many have chosen to exploit their capabilities 

to pirate copyrighted works. I believe this piracy is one of the biggest threats to the 

content and technology industries, the two industries that have contributed more to 

our national economy than just about any other. 

The same people who wouldn’t even think of taking a candy bar from a grocery 

store—or a shirt from a department store—think nothing of downloading thousands 

of movies and songs every day from the Internet. They say that it’s so easy to take 

content from the Internet it must be legal and the copyright owners make too much 

money anyway. In fact, this type of file sharing is nothing less than ‘‘virtual shoplifting.’’ Those who advocate for free file sharing simply don’t understand that the money 

that they refuse to pay goes to all of those who contribute to the creative process. 

It threatens the viability of record labels, technology companies, and movie studios, 

and impacts the livelihoods of their employees, artists, actors, songwriters, other 

creators, and their families. 

And we can guess the impact is serious because, on the music side, sales are down 

this year 10 percent over last year—and last year’s level was the lowest since 1993. 

I’d like to say that it’s interesting that people who support file sharing never make 

their own movies or music available for free on the Internet. In my mind, there is 

no question that it is wrong, and numerous court decisions have upheld that answer. 

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The real question is what should be done about it. There has been a lot of movement this year, including hearings in Congress, bills, and deals within the private 

industry. For instance, the record labels have started to let consumers stream and 

burn music off the Internet, and the major movie studios and IBM just announced 

they are working to allow rentals of digital videos. And the broadcasters reached 

a deal several months ago with the technology companies on how to protect broadcast content from piracy. 

It’s important to know what the next step should be and what role Congress 

should play.

[The prepared statement of Mr. Hyde follows:]

PREPARED STATEMENT OF THE HONORABLE HENRY HYDE, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF ILLINOIS

Thank you, Mr. Chairman. It has been asserted in the press recently that the rule 

of law does not apply on the Internet. That taking a DVD or a CD from a store 

without paying for it may be illegal and should be prosecuted, but that taking the 

same movie or music off the Internet without paying for it is lawful and should be 

tolerated. As illogical as this seems, the assertion has been made over and over 

again by those who either seek to get something for free, or by those who make 

products on which free movies and music can be enjoyed. 

I disagree with the assertion. Principles and laws must be upheld and enforced 

regardless of the medium. Theft is theft. To argue that bank robbery is illegal, but 

use of the Internet to steal the same money electronically is lawful is an absurd 

proposition. Yet when it comes to intellectual property, the argument is advanced 

by some academics and industry groups as valid. They argue that the nature of intellectual property vis-a-vis real or personal property justifies the taking. Or that 

it is ‘‘fair use’’ to take an entire work for nothing more than personal enjoyment 

even though it was never purchased by the user. 

Our nation’s copyright laws serve a specific purpose—to protect our creations. It 

is a simple concept that has spawned the world’s most sought after movies, music 

and software. And I applaud the Department of Justice for recently announcing that 

it will enforce our intellectual property laws on the Internet just as it would in the 

physical world. 

The concept of peer-to-peer technology, empowering individuals around the world 

to share information on each other’s computers, while creating many of its own security and privacy concerns, holds great potential. So far, however, this great technology has been used primarily to allow individuals to copy movies and music on 

other people’s computers so that purchasing the CD, renting or buying the DVD, or 

even going to see a movie is unnecessary. And because of the nature of the technology, the piracy occurs at a staggering rate. No creator can survive if this remains 

unchecked for too long. 

Technology should advance, but principles and laws should apply consistently. 

The public needs to understand that Internet theft is no different than any other, 

and I app laud you, Mr. Chairman, and Mr. Berman, for holding this hearing to 

help achieve that purpose. 

Thank you.

[The Washington Post article follows:]

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Mr. COBLE. Now, folks, I think that’s the issue that plagues us 

today. Hopefully, we will be able to resolve it in due time. 

To indicate to you what I said about the scare tactics—I don’t 

want to bore you all with this, but a friend of mine overheard two 

staffers discussing this legislation in the Rayburn cafeteria weeks 

ago. 

And one said, ‘‘Oh, Mr. Berman has introduced this terrible piece 

of legislation, and Mr. Coble has co-sponsored.’’ ‘‘The sky is falling,’’ my friend thought as he heard these two exchange these ideas. And my friend said he couldn’t resist doing 

this, he said, ‘‘Well, why is this such a bad piece of legislation? 

What’s your source? What’s your authority?’’ This is the answer: ‘‘Oh, this fellow follows electronics issues real 

closely, and he assures me this is bad.’’ Now, this is the sort of vague misinformation going around this 

thing. And, folks, I don’t suggest to you all today that it’s all black 

or white. Very likely, it’s subtle shades of gray, as are most issues 

with which we deal up here. 

But, again, I thank you all for being here. I think it has been 

a good hearing. This matter is not going to be pronounced dead 

today. The last rites will not be announced today. It will be revisited. 

This concludes the oversight hearing on piracy of intellectual 

property on peer-to-peer networks. The record will remain open for 

1 week. Now, I repeat that: For 1 week the record will remain 

open, so if anybody wants to weigh in, feel free to do so. 

The Subcommittee stands adjourned. 

[Whereupon, at 12:45 p.m., the Subcommittee was adjourned.] 

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A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

PREPARED STATEMENT OF THE HONORABLE LAMAR SMITH, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF TEXAS

Mr. Chairman, the Internet has revolutionized our lives. News, entertainment, information, and education are accessible at the click of a button. But for as many 

legitimate opportunities as the Internet presents, it also presents temptations to 

break the law. This hearing highlights some of those, such as illegal downloads over 

peer-to-peer networks and other forms of intellectual property theft. 

Most people would not shoplift a CD in a retail store, but some have a different 

attitude about downloading the same copyright protected CD using P2P software on 

the Internet. 

Shoplifting and unauthorized downloading of intellectual property are both illegal. 

Both represent a direct threat to the livelihoods of U.S. copyright creators, including 

songwriters, recording artists, musicians, graphic artists, journalists, novelists and 

software programmers. 

I support strong private property rights and believe that copyright owners have 

legitimate concerns about the theft of their property using P2P software on the web. 

Curtailing the theft of intellectual property is not confined to the Internet. For 

example, software companies use a variety of technologies to make their software 

inoperable if the licensing terms are violated. Satellite companies use electronic 

countermeasures to combat the theft of their intellectual property. 

H.R. 5211, the Peer to Peer Piracy Prevention Act, seeks to address the illegal 

use of P2P services on a network. As with the software manufacturer that may 

imbed a code to disable a software program if it is illegally distributed or copied, 

so this bill seeks to authorize copyright owners to employ technology-driven strategies to prevent the unauthorized distribution, display, performance, or reproduction 

of their copyrighted works. The purpose of this bill is to discourage the illegal use 

of publicly accessible P2P services on the Internet. 

Copyright owners have legitimate concerns about the theft of their property. Some 

advocate that the federal government dictate solutions to combat this kind of piracy 

on the Internet, but I strongly oppose this approach. The solution lies in the private 

sector, not with the federal government. 

This bill allows copyright owners to protect their own work. While I have some 

concerns about the details of this bill and how it would be implemented, I support 

the concept behind it and look forward to working on this issue in the future.

PREPARED STATEMENT OF THE HONORABLE HOWARD L. BERMAN, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. Chairman, I want to take a moment to reflect on your tenure as Chairman. 

For those who are unaware, Chairman Coble’s tenure as Chairman of this Subcommittee ends with the 107th Congress. 

I have tremendously enjoyed and deeply valued our relationship as Chairman and 

Ranking Member. You have ably led this Subcommittee through innumerable legislative and political challenges, and done so with characteristic charm, willpower, 

and an always easygoing demeanor. 

Your record of legislative accomplishments as Chairman is great. The Digital Millennium Copyright Act. The American Inventors Protection Act. The Sonny Bono 

Copyright Term Extension Act. The No Electronic Theft Act. The Satellite Home 

Viewer Improvement Act. The Anti-Cybersquatting Consumer Protection Act. The 

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Work Made for Hire and Copyright Correction Act. The Madrid Protocol Implementation Act. And innumerable other, less heralded bills. 

The American public owes you a debt of thanks for your dedicated service over 

the past six years. I owe you a personal debt of thanks for including me as a partner 

in the leadership of this Subcommittee. 

Mr. Chairman, thank you for calling this oversight hearing on P2P piracy. There 

have been some truly outrageous attacks on the P2P Piracy Prevention Act, and I 

welcome this opportunity to set the record straight. 

When we first introduced the P2P piracy bill, I never expected that anyone would 

challenge the basic premise of the bill: namely, that copyright owners should be able 

to use reasonable, limited self-help measures to thwart rampant P2P piracy. 

Incredibly, some folks actually challenge that premise. The head of a big trade 

association claims it’s legal to make unauthorized distributions of copyrighted works 

to 100 million P2P users. P2P software companies claim that, even if illegal, P2P 

piracy causes no harm. Representatives of the computer industry say that only 

record companies suffer harm, and they deserve it for charging too much. Others 

vaguely theorize that copyright owner self-help will threaten security or privacy. 

And still other piracy profiteers attempt to thwart any solution to P2P piracy, then 

throw their hands up and say it is an insoluble problem. 

Let’s start with a basic fact. Unauthorized distribution or downloading of copyrighted works on public P2P networks is illegal. To paraphrase the 9th Circuit in 

the Napster case: public P2P users ‘‘who upload file names to the search index for 

others to copy violate a copyright holder’s distribution rights. P2P users who 

download files containing copyrighted music violate a copyright holder’s reproduction rights.’’ Any attempt to say otherwise is a bald-faced attempt to rewrite wellsettled law. 

Let’s move to another indisputable fact. Massive theft of copyrighted works is the 

predominant use for public P2P networks today. There are now approximately 3 billion files P2P downloads a month. The vast majority of these downloads contain copies of copyrighted works for which the copyright owners receive no compensation. 

Now another fact. P2P piracy doesn’t just affect the bogeymen—record companies 

and movie studios. P2P piracy destroys the livelihoods of everyday people. 

What do piracy profiteers have to say to Linn Skinner, a Los Angeles needlework 

designer whose livelihood has been destroyed by Internet piracy? Or about Steve 

Boone, a Charlotte small businessman who has watched P2P piracy decimate his 

karaoke tape company? How do they response to Mike Wood, a struggling Canadian 

recording artist who believes P2P piracy will derail his recording career before it 

gets off the ground? What do piracy profiteers say to the vast majority of songwriters who make less than $20,000 per year, and have yet to make one thin dime 

from the massive P2P piracy of their works? 

Songwriters can actually quantify their P2P piracy losses. By statute, a songwriter is both entitled and limited to collecting 8 cents for every ‘‘digital phonorecord 

delivery’’ of sound recordings containing her songs. Each illegal P2P download of a 

song robs the songwriter of that 8 cents. 

Those eight cents may not seem like much, but multiply 8 cents by the reported 

3 billion monthly P2P downloads. It calculates out to $240,000,000 dollars . . . a 

month. Even 1⁄10th of that amount represents real money to the 5,000 U.S. songwriters. 

Now another fact. If piracy profiteers were truly concerned about security and privacy threats to P2P users, they would address the security and privacy threats 

posed by the P2P networks themselves. A recent white paper by the University of 

Tulsa Center for Information Security details how KaZaA, Gnutella, and other popular P2P networks expose P2P users to spyware, trojan horses, system exploits, denial of service attacks, worms, and viruses. A joint paper by HP Labs and the University of Minnesota details how the vast majority of P2P users are exposing personal information, such as credit card numbers, to every other P2P user. In fact, 

the U.S. Courts, the House, and the Senate all block the use of public P2P networks 

because of the security concerns they pose. 

Do the piracy profiteers talk about these real security and privacy concerns? No. 

And you know why? Because it is the piracy profiteers who put the spyware on the 

computers of P2P users so they can surreptitiously collect their personal information 

and sell it to third parties. 

Another fact. P2P companies could design their software to stop piracy, but they 

don’t. Grokster has designed its P2P software to filter out pornography, but has it 

ever tried to filter out copyright infringements? Napster claimed it couldn’t stop piracy, but after the court ordered it to do so, it suddenly found a way to stop most, 

if not all, piracy on its networks. 

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Rather than looking for solutions to piracy, P2P companies are designing their 

systems to be better piracy tools. Both Morpheus and KaZaA have upgraded their 

software specifically to impair the ability of copyright owners to proliferate decoy 

files through the networks. 

Based on all these facts, what can an objective person conclude other than that 

many companies plan to profit from piracy, and have no intent or desire to stop it? 

I look at these facts and figures, at the faces of copyright owners, and I see a 

problem in desperate need of a solution. P2P piracy must be cleaned up, and cleaned 

up now. The question is, How? 

My P2P Piracy bill is an important part of the solution. The Peer to Peer Piracy 

Prevention Act is quite simple in concept. It says that copyright owners should not 

be liable for thwarting the piracy of their works on P2P networks IF they can do 

so without causing harm. 

You might reasonably wonder why we need to pass legislation giving property 

owners the right to protect their property against theft. After all, the U.S. Supreme 

Court has held that ‘‘[A]n owner of property, who seeks to take it from one who is 

unlawfully in possession, has long been recognized to have greater leeway than he 

would have but for his right to possession. The claim of ownership will even justify 

a trespass and warrant steps otherwise unlawful.’’ The problem is that a variety of state and federal statutes may create liability 

for copyright owners engaging in otherwise justifiable self-help. 

This is not fair. Copyright owners should have the same right as other property 

owners to stop the brazen theft of their property. The P2P Piracy bill simply ensures 

that the law will no longer discriminate against copyright owners. 

Obviously, it is critical that a liability safe harbor be appropriately limited. In 

drafting the P2P Piracy bill, I tried to ensure that only reasonable self-help technologies would be immunized, that the public would be protected from harm, and 

that over-reaching or abuses by copyright owners would be severely punished. 

The most important limitation in the bill is the narrow breadth of the safe harbor 

itself. The bill says copyright owners get immunity from liability under any theory, 

but ONLY for impairing the ‘‘unauthorized distribution, display, performance, or reproduction’’ of their own works on public P2P networks. If the copyright owner’s impairing activity has some other effect, like knocking a corporate network offline, the 

copyright owner remains liable under whatever previous theory was available. 

Some claim that the bill is not limited in this way. Their claim appears to be that 

the bill gives a copyright owner immunity for anything she does, as long as it has 

the effect of stopping piracy on a P2P network. By their logic, the bill allows a copyright owner to burn down a P2P pirate’s house if the arson stops the pirate’s illegal 

file trading. Clearly, the bill says nothing of the sort, and no judge or disinterested 

party could read it that way. 

The bill specifically states that a copyright owner cannot delete or alter ANY file 

or data on the computer of a file trader. Thus, a copyright owner can’t send a virus 

to a P2P pirate, it can’t remove any files on the pirate’s computer, and it can’t even 

remove files that include the pirated works. 

The safe harbor does not protect a copyright owner whose anti-piracy actions impair the availability of other files or data within the P2P network, except in certain 

necessary circumstances. Some folks have raised concerns about this provision, and 

I am thinking about alternative language that could resolve their concerns. 

The bill denies protection to a copyright owner if her anti-piracy action causes any 

economic loss to any person other than the P2P pirate. 

The safe harbor is also lost if the anti-piracy action causes more than de minimis 

loss to the property of the P2P pirate. 

Finally, the safe harbor is lost if the copyright owner fails to notify the Attorney 

General of the anti-piracy technologies she plans to use, or if she fails to identify 

herself to an inquiring file-trader. 

Obviously, these limitations would be meaningless if copyright owners did not 

have adequate incentive to obey them. The P2P piracy bill provides such incentives 

by subjecting transgressing copyright owners to MORE liability than they have 

under current law. 

This is a critical point: If a copyright owner falls outside the safe harbor, an aggrieved party could sue the copyright owner for any remedy available under current 

law, AND for an ADDITIONAL civil remedy created by the P2P piracy bill. The bill 

also gives the U.S. Attorney General new power to seek an injunction against transgressing copyright owners. 

The potential for liability under this wide variety of remedies provides copyright 

owners with strong incentives to operate within the strict limits of the safe harbor. 

I think the P2P piracy bill provides a strong starting point for legislation enabling 

copyright owners to use reasonable self-help to thwart P2P piracy. However, I don’t 

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claim to have drafted a perfect bill, and I welcome suggestions for improvements. 

I note, however, that while I will listen carefully to those who wish to solve the P2P 

piracy problem, I will not be so solicitous of those who wish to profit from it. 

Thank you, Mr. Chairman.

PREPARED STATEMENT OF THE HONORABLE RICK BOUCHER, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF VIRGINIA

Thank you, Mr. Chairman. 

I appreciate the Subcommittee holding a hearing on the matter of music distribution across the Internet, but I’ll have to confess a preference for a different focus 

than that of this hearing. 

There is a need for legislative action in this Committee to facilitate the lawful distribution of music across the Internet in a manner that assumes that all owners of 

copyright are paid. Mr. Cannon and I have introduced a comprehensive measure, 

the Music Online Competition Act, each of the elements of which if enacted into law 

would help achieve that goal. 

The Copyright Office has also recommended legislation to help achieve that goal. 

The recording industry can achieve that goal if it will simply place entire inventories on the Web for permanent portable downloading at a reasonable price. 

There is a recent Jupiter Media Matrix study which shows that 2⁄3 of the public 

values the availability of a broad inventory of music, the assured quality of the 

download, and the ability to keep the music permanently and move it from one player to another in the personal environment, as more important considerations than 

price. These 2⁄3rds of the public would clearly be willing to pay a reasonable price 

if these other elements of quality, availability, and portability are present. 

In my view the recording industry does not need the legislation which the Subcommittee is examining today. It should put entire inventories on the Web for permanent portable download at a reasonable price. That’s the way to compete with 

the lower quality free peer-to-peer services. 

Turning to the bill at hand, I question at the outset what it is the industry wants 

to do under the provisions of the bill that it cannot do under current law. 

Spoofing is allowed now. Decoys are allowed now. Redirection to legitimate 

websites is allowed now. I hope the witnesses will be very specific about what it 

is that the industry wants to do by way of self help that it can’t do at present. And 

I have other questions:

• Would any of these intended self help mechanisms harm innocent Internet 

users by slowing down the speed of a shared network such as a cable modem 

service?

• Would any of these mechanisms permit the recording industry to intrude into 

the personal computer space of an Internet user? If so, what are the implications of such intrusions for the privacy rights of individuals?

• If any damage is done to hardware, software or data owned by an Internet 

user, how would the damaged party know who to proceed against? After all, 

no notice to him is required under the bill that his space is being invaded 

or who is doing the invading.

• What assurance will there be that material which is protected under the fair 

use doctrine will not be blocked or disables by a self help invasion?

What are the implications for the Internet’s functionality when the inevitable 

arms race develops as countermeasures are used to block self help mechanisms? I 

can imagine that if the recording industry launches what amounts to denial of service attacks against Internet users, that denial of service attacks will then be 

launched against the industry with broad adverse effects on Internet speed and effectiveness to the disadvantage of Internet users generally. 

These are a few of the matters that concern me. I hope these questions will be 

addressed this morning.

PREPARED STATEMENT OF DAVID P. MCCLURE

Mr. Chairman and Members of the Subcommittee: 

My name is David McClure, and I am President of the US Internet Industry Association, the oldest and largest trade association representing Internet commerce, 

content and connectivity. USIIA was founded in 1994 by leading companies in the 

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1 ‘‘A Chat with Hillary Rosen,’’ Brad King, Wired Magazine, http://www.wired.com/news/culture/0,1284,39108,00.html 2 USIIA Code of Practice, Article VI, as adopted by the USIIA Board of Directors January 5, 

1995. 3 ‘‘2001 US Economic Review—Box Office’’, Motion Picture Association of America, at http://

www.mpaa.org/useconomicreview/2001Economic/index.htm 4Data provided by market researcher NPD Techworld 

online services industry to represent the interests of individuals and companies that 

do business on the Internet. 

Our diversified membership includes Internet service providers from global and 

national ISPs to small providers serving remote areas nationwide; Internet backbone companies, telephone companies; hardware and software vendors involved in 

the technologies of the Internet; electronic commerce sites, and service providers to 

those sites. Our charter is to promote the growth of electronic commerce, content 

and connectivity through sound public policy and business support. 

FIRST, DO NO HARM

I strongly urge this committee, and this Congress, to take no action at this time 

on the issue of peer-to-peer file sharing. First and foremost because this issue is neither large enough nor serious enough to warrant the attention of the distinguished 

members of Congress. And because the Internet and music industries are capable 

of resolving this issue without the intervention of the federal government. 

In this we agree with Hilary Rosen, President of the Recording Industry Association of America when she noted, ‘‘Congress cannot keep pace with the marketplace, 

and none of us should expect them to. The marketplace can handle this. The laws 

are there.’’ 1

There is a very real danger that the intervention of this committee and the Congress will serve only to harm the natural evolution and operations of the free marketplace, over-riding the interests of consumers and vendors alike in the pursuit of 

a balance that the marketplace itself will achieve more rapidly and more effectively 

if simply left to its own devices. 

PIRACY ON THE INTERNET

There is no question that some individuals misuse the Internet, and such Internet 

services as peer-to-peer file sharing, to trade in stolen intellectual property. No one 

within the Internet industry condones this activity, and the Code of Practice for our 

Association states clearly that:

‘‘Members shall respect the rights of the owners of intellectual properties, including software authors and artists, providing proper diligence and reasonable 

effort to prevent the infringement of copyrights, patents and other protections.’’ 2

What is at issue is not whether this Internet piracy exists, but the extent to which 

it exists and the severity of its impact on the financial well-being of the owners of 

the intellectual property. 

FILE-SHARING STUDIES

There is no credible means of correlating Internet file sharing with the loss of revenues by copyright holders. Any claims to quantify Internet piracy, or the impact 

of file sharing on the revenues of content companies, are little more than wild guesses. 

Sales are declining in the music industry. They are down 6.4 percent for 2001, 

a decline that continues in this year. Forrester Research estimates that the industry 

will be a 6 percent decline in sales for 2003 as well. Yet revenues to the film industry, which equally claims to be suffering at the hands of Internet file-sharing, increased by 9.8 percent last year to reach an all-time record.3 The retail software industry, which also blames losses on Internet piracy, had sales of $105 billion in 

2001, up 3% over the previous year. It is expected to see similar growth this year.4

What’s more, studies on the habits of Internet file-sharers—Jupiter Media Metrix, 

Webnoize, Forrester Research, Ipsos-Reid Corp., and more recently by the Gartner 

Group—fail to substantiate the claims of heavy losses for content holders. 

Forrester Research found that more than two-thirds of the CDs bought in the US 

sell to consumers who rarely or never download music files. Ipsos-Reid reported that 

81 percent of file sharers buy as many or more CDs as they did before they began 

downloading music from the Internet. Jupiter Research found that 86 percent of veteran file sharers buy as many or more CDs as they did previously. 

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One independent study after another shows little or no decline in buying habits 

among file-sharing consumers. In fact, the evidence gathered by the Gartner Group 

and released this month presents a different view—that file-sharing is actually driving sales of music products, and that without the influence of the Internet the music 

industry might be suffering a greater decline in sales than it has today. 

THE INTERNET SCAPEGOAT

The Internet and other consumer technologies have always been used as a convenient scapegoat for the music industry. The last time sales of music declined, in 1978, 

the industry blamed its woes on the cassette tape recorder and launched an aggressive campaign under the slogan ‘‘Home taping is killing music.’’ By 1980 it was clear 

that cassettes had not killed music. Instead, consumers had grown tired of Disco. 

Once the industry produced music that was more interesting, sales improved. 

There is no compelling evidence that the Internet is responsible for the current 

decline in music sales, any more than cassettes were in 1978. Yet the music industry, through its agents and trade groups, has launched a vicious campaign of propaganda and lawsuits against our industry. 

They have sent with hundreds of bogus copyright claims sent to ISPs nationwide. 

They have put a series of Internet companies out of business, and are now in the 

courts seeking to summarily close others. They have filed suits against the largest 

ISPs in the nation, and today are preparing to go to court against Verizon in an 

effort to expand their ‘‘digital rights’’ against the interests of consumers. 

They are demanding that ISPs terminate subscribers’ Internet accounts at their 

whim—without first filing any lawsuit against the consumer—and are demanding 

that the Department of Justice prosecute consumers who use peer-to-peer networks. 

Today they are before this committee in an effort to blame their decline in sales 

on the Internet. But this is a hollow claim that is not substantiated either by the 

facts or by reason. 

The music industry’s financial slump is more likely due to the fact that they have 

raised the price of CDs by 13% in the past two years, in the middle of a major economic downturn that has impacted overall retail sales and sales of consumer electronic products to a much greater degree than the music industry. The decline in 

sales is also likely due to the fact that they are suffering from a dearth of new talent. And that the industry has been unwilling or unable to offer any type of digital 

music distribution model of its own. 

The music industry is also suffering because it failed to see a major shift in consumer buying habits. The mass-production, mass-advertising and mass-consumption 

model that has directed American buying habits since the days of Henry Ford have 

evolved to a new model in which consumers have things their way—how they want 

it, when they want it, and where they want it. The popularity of file sharing is at 

its root a signal to the music industry that it is time to rethink their products, packaging and distribution—or face becoming obsolete. 

LEGISLATIVE SOLUTIONS

Mr. Chairman, and members of this committee, the problems faced by the music 

industry were not caused by the Internet and cannot be resolved by any amount 

of legislation. They are problems created by the industry itself, and the wounds they 

are suffering are self-inflicted. 

It is our belief that the Internet, and the sharing of files over peer-to-peer networks on the Internet, will ultimately evolve into a powerful new market for content 

holders. Already, an estimated 40 million Americans are engaged in file sharing, 

and that number will only increase. These consumers are not unwilling to pay for 

content. They are unwilling to pay for content they do not want, or content that is 

packaged in a way that is difficult for them to use. 

This is an issue that industry can solve. It does not require new legislation. It 

does not require new powers of enforcement or interdiction. It requires only that the 

content community and the Internet community continue their productive dialogue 

toward building a digital distribution model for their products. These two industries, 

working in concert, have the necessary expertise, resources and incentive to resolve 

this issue and should be given the opportunity to do so. Crafting this solution will 

involve a delicate balancing of interests that may at some point be assisted by appropriate legislation, but needs no such assistance now. 

The Congress, and this committee, can best serve the needs of American consumers and of the industries involved by allowing this dialogue and the search for 

industry resolutions to continue unimpeded. 

Thank you.

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Attachments: 

Slate—‘‘The Music Industry’s Self-Inflicted Wounds’’

Reuters—‘‘Study Faults Media Focus On Copyright Strategy’’

Janis Ian—‘‘The Internet Debalce—An Alternative View’’

Janis Ian—‘‘Fallout’’

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PREPARED STATEMENT OF THE NATIONAL MUSIC PUBLISHERS’ ASSOCIATION

On September 26, 2002, the Subcommittee held a hearing ‘‘Piracy Of Intellectual 

Property On Peer-to-Peer Networks, in which H.R. 5211, the Peer-to-Peer Piracy 

Prevention Act was discussed at length. The National Music Publishers’ Association 

(NMPA) appreciates this opportunity to submit written comments on this important 

subject. 

NMPA works to protect and advance the interests of the music publishing industry. With more than 800 members, NMPA represents the leading companies in the 

industry, from those affiliated with large media companies to the industry’s largest 

and most influential independent music publishers The Harry Fox Agency, NMPA’s licensing affiliate, provides an information source, clearinghouse, and monitoring 

service for licensing music copyrights and acts as licensing agent for more than 

27,000 music publisher-principals, who in turn represent more than 160,000 songwriters. 

NMPA applauds the subcommittee for focusing on the pressing problem of peerto-peer piracy. As evidenced by the Napster litigation, peer-to-peer piracy has since 

its inception posed a serious threat to music copyright. The International Federation 

of the Phonographic Industry (IFPI) observed that the U.S. music sales market experienced a 9.4% decline in 2001, with Internet infringement and CD burning two 

of the principle responsible factors. In the year 2000, international enforcement actions taken by IFPI and its 46 national affiliates led to 15,000 websites containing 

300,000 files being taken down. There is no question that illegal file-sharing is a 

substantial portion of the digital infringement problem. In November of 2001, 

NMPA and several songwriters filed a class-action copyright-infringement suit in 

Los Angeles against the operators of the Morpehus, Grokster and KaZaA file-sharing systems, following a suit in October of that year by the Recording Industry Association of America and the Motion Picture Association of America. A positive decision was recently obtained against the Aimster system, while the litigation against 

Morpheus, Grokster and KaZaA is still pending. The substantial problems of peerto-peer piracy remain. The attention of the subcommittee to the serious nature of 

this problem is therefore greatly appreciated. 

H.R. 5211 would authorize copyright owners to utilize technological self-help 

measures to prevent unauthorized distribution of copyrighted works over peer-topeer networks. The authorization is meant to relieve copyright owners from the 

specter of liability under certain common law doctrines and state and federal statutes, including the federal Computer Fraud and Abuse Act, when they use self-help 

measures such as interdiction, decoy, redirection, spoofing and file-blocking. At the 

same time, it provides a new federal cause of action against copyright owners who 

abuse their right to use self-help measures. NMPA supports the legislation’s laudable goals of protecting the use of reasonable measures by copyright owners. At the 

same time, NMPA would like to see certain clarifications and modifications to the 

bill. 

NMPA’s first issue relates to the preemptive effect of the bill. As currently written, the bill preempts causes of action under state laws only when the copyright 

owner’s self-help actions are in compliance with the standards of the bill. If a copyright owner unknowingly exceeds the boundaries of H.R. 5211 and causes, for example, $300 worth of damage to computer files or data, the copyright owner could be 

sued under state laws that may have very different (and much lower) substantive 

standards for finding a violation, and very different (and much higher) potential for 

damage awards. For example, simply imposing a burden on the finite capacity of 

a computer has been found to be sufficient damage under some state law theories. 

In the context of spamming and misleading advertising, such a rule may be reasonable, but the rule has not been clearly limited to those types of behavior. Even if 

the copyright owner prevails, which we believe is a distinct possibility, the burden 

and expense of state litigation will have been borne—which we believe is unfair and 

unnecessary in this situation. 

NMPA believes that a more appropriate and customary approach to preemption 

would be for the federal law to preempt state laws in all instances. Such an approach is supported by the fact that peer-to-peer networks and the communications 

over them are by their nature interstate. Accordingly, a single federal cause of action with an appropriate remedy that balances the interests of those concerned is 

preferred to a patchwork of potentially inconsistent and inappropriate state laws. 

The fact that the subject of the bill is copyright law also argues in favor of a single federal law that broadly preempts state causes of action and remedies. The basis 

for copyright statutes lies in the U.S. Constitution. Section 301 of the Copyright Act 

preempts state laws that are equivalent to copyright, thus limiting the rights of 

those who create intellectual property. It would be unfair to deprive copyright ownVerDate Jan 17 2002 09:45 Nov 05, 2002 Jkt 000000 PO 00000 Frm 00106 Fmt 6601 Sfmt 6621 G:\WORK\COURTS\092602\81896.000 HJUD1 PsN: 81896
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ers of the benefit of state laws while providing those who infringe on federal copyrights the ability to use state laws against copyright owners. 

Although not strictly an issue of preemption, the preference for a single cause of 

action also means that the bill should be clear that no cause of action exists under 

the Federal Computer Fraud and Abuse Act against copyright owners who seek to 

protect their rights under federal copyright law by engaging in interdiction, decoy, 

redirection, spoofing and file-blocking. The federal courts have given the CFAA a 

broad reading, finding ‘‘damage’’ to computer files or data to include any impairment 

of the integrity or availability of computer programs or data. One court has found 

‘‘impairment’’ to occur when a large volume of unsolicited bulk email causes slowdowns or diminishes the capacity of a service provider. Under this reading, it is possible that some of the legitimate anti-P2P piracy techniques—including decoy, redirection and spoofing—could result in slowing down the computer of the file trader, 

in which case a claim under the CFAA might be brought. As noted with state causes 

of action, while the copyright owner may prevail under the CFAA, it will have borne 

the burden and expense of additional litigation. The CFAA should therefore be superseded by H.R. 5211 when copyright owners engage in legitimate anti-piracy efforts under the bill. 

The second point of concern to NMPA is the notice requirement. The present draft 

of the bill requires that the copyright owner give notice to the Department of Justice 

of ‘‘the specific technologies the copyright owner intends to use to impair the unauthorized distribution, display, performance, or reproduction of the owner’s copyrighted works over a publicly accessible peer-to-peer file trading network’’. It is 

somewhat unclear whether this notice must be given every time that a particular 

technology is to be used, or only the first time. We encourage clarification that the 

notice is required only upon the first use of a technology. 

Third, NMPA would like to address what has been characterized as a ‘‘safe harbor’’ provision in the bill. The nature of a safe harbor is that a potential defendant 

should be assured that its actions will not expose it to liability if it complies with 

an objective, mechanical bright-line test of unambiguous requirements that exempt 

it from the a prima facie cause of action under the statute in question. Subsection 

(c) of the bill,—which states that ‘‘A copyright owner shall not be liable under subsection (a) for an act to which subsection (a) applies’’ if the copyright owner complies 

with the provisions regarding notice to the Department of Justice and the affected 

file trader—has been presented as a safe harbor. Subsection (a) of the bill, however, 

states that the copyright owner shall not be liable if its actions do not ‘‘alter, delete, 

or otherwise impair the integrity of any computer file or data residing on the computer of a file trader’’. Thus, the cross-reference to subsection (a) that appears in 

subsection (c) appears to provide that notice to the Department of Justice and the 

affected file trader is not sufficient to bring the copyright owner within the protection of the safe harbor. Rather, the safe harbor only applies if the notification requirements are met and the act of the copyright owner does not alter, delete, or otherwise impair the integrity of any computer file or data residing on the computer 

of a file trader. This is not a standard safe harbor, since it effectively says that the 

copyright owner will not be liable for causing harm if it does not cause harm. 

Simply satisfying the notification requirements should be sufficient to put the 

copyright owner within the safe harbor, unless it can be shown that the copyright 

owner intended that harm to computer files or data would result. This formulation 

of the safe harbor would promote the filing of notice, provide the Department of Justice with information about the various self-help technologies being used, protect 

copyright owners from liability if unintentional or unforeseen harm to a computer 

file results, but deny protection to copyright owners that knowingly or intentionally 

cause harm to computer files or data. We believe this strikes the proper public policy balance. 

NMPA’s comments should be viewed within the context of its overall support for 

the intent of this legislation, which addresses one of the most profound and serious 

threats today to the rights of copyright owners. NMPA appreciates the subcommittee’s efforts in this area and looks forward to continued participation in the consideration of this issue and this particular piece of legislation. Thank you for this opportunity to express our views.

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PREPARED STATEMENT OF STEVE GRIFFIN

What is peer-to-peer? What are its uses? Who uses peer-to-peer? What kind of 

company is StreamCast Networks? What kind of company was Napster? These are 

important questions and the answers need to be understood by Members thinking 

about legislating in an area that impacts their constituents and peer-to-peer. Considering that no true technology companies or interests are present at the hearing—

it is clear that there is not an understanding of peer-to-peer. Without an idea of 

what the technology does, a premature, incorrect assumption may be growing on the 

Hill that all peer-to-peer software and technology is destined to be enjoined by the 

Courts (i.e., they improperly only think of the now defunct Napster or Aimster when 

completely different Peer-to-Peer software tools exist). It is as if Members categorically presume innovative peer-to-peer products are illegal despite such software 

products’ respective uniqueness; this notwithstanding the fact that such a determination has not been established in a court of law in proceedings currently pending regarding decentralized peer-to-peer technologies. The challenge today is overcome the scare tactics and resist creating a temporary or shortsighted fix that is 

neither in the best interest of the public or in favor of the innovation of technology. 

What I have found in the many years in business and 27 years of marriage is 

that the most important action to overcoming challenges is working together to find 

common ground. Rather than fighting, suing and hacking like the content industry 

is doing, I am spending my energy trying to find solutions that benefit everyone including content creators, content owners, consumers and content communicators. 

The solution will only come when all the stakeholders sit down together in effort 

to attempt to reach a reasonable, workable resolution to the on-going battle between 

content and technology. 

WHAT IS PEER-TO-PEER?

Peer-to-Peer, commonly referred to as ‘‘P2P’’, is a communications model in which 

each party has the same capabilities and either party can initiate a communication 

session. In some cases, peer-to-peer communications is implemented by giving each 

communication node, otherwise known as a user, both server and client capabilities. 

In recent usage, peer-to-peer has come to describe applications in which users can 

use the Internet to exchange files with each other directly or through a mediating 

server. 

WHAT IS PEER-TO-PEER TECHNOLOGY?

Collaborative computing, also known as distributed computing, pools the processing power of multiple computers. Instant messaging applications like Morpheus 

Messenger, MSN Messenger and AOL Instant Messenger, allow users to swap messages and files synchronously. This allows people to use shared space in which they 

interact directly without dealing with servers and boundaries, doing things such as 

collaborating on documents in a shared space and searching each others’ computers 

and shared folders, also called file sharing. 

WHAT IS PEER-TO-PEER SOFTWARE?

A true P2P software product, like Morpheus, allows consumers to connect directly 

with each other and to exchange any type of information—anything—recipes, family 

photographs, a poem from a budding poet, commentary on public issues, anything. 

Once consumers have downloaded the Morpheus software they choose what electronic information that they want to make available to people around the world. In 

short, Morpheus allows consumers to directly connect to each other like the Internet 

was intended to be—a communication tool where users are both senders and receivers of information. It is a new gateway or alternative to the World Wide Web where 

users have primarily been only receivers of data (i.e., visiting a company’s website 

to obtain information on that company provided to the site visitor by that company). 

P2P’S BENEFITS INCLUDE, BUT ARE NOT LIMITED TO: 

1. Businesses worldwide can save billions by using distributed computing setups that take advantage of unused bandwidth and resources.

2. P2P knocks down the barriers to publishing, communicating and sharing information.

3. P2P permits easier access to all types of data, files and information.

4. P2P provides content creators with a venue to communicate and share ideas 

and information directly. 

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SOCIETAL IMPACT OF PEER-TO-PEER

The reason that I am so passionate about the Peer-to-Peer technology platform 

is that it not only can lead to important societal changes but also itself reflects important societal changes that have already taken place. Individuals—on their own, 

unaided by the communications giants—are finding their own new ways of connecting, of communicating, and of creating and controlling their own communication 

channels. Their will—connected and empowered—is prevailing now and Congress 

should not overlook them. 

The old Internet, or the way that it has been since 1996, was and remains a distribution channel that has been controlled by traditional companies where users 

were primarily receivers of information. With the ‘‘New Internet’’ consumers are not 

merely receivers of information, they are also senders. StreamCast Networks is committed to incorporating different tools that empower consumers to communicate and 

exchange information directly with one another. 

USERS OF PEER-TO-PEER TECHNOLOGY

The Morpheus software program is a communication tool that allows users to 

independently connect to one another to form a user network, commonly known as 

a user-to-user or ‘‘peer-to-peer’’ network. Using Peer-to-Peer networking 

functionality of the software, users may search for and compare any kind of computer file, including text, images, audio, video, and software files with other computer users running similar networking software. With Peer-to-Peer software such 

as Morpheus, the searching and file-sharing functions are entirely decentralized—

after downloading and installing the Morpheus software on their computers, users 

decide for themselves what information to seek out, send and receive with the software, without any further involvement from StreamCast. 

Something that needs to be understood by the Members is that contrary to what 

has been incorrectly depicted in some media reports or by major motion picture companies and major recording labels, Morpheus is not the same as Napster nor does 

the Morpheus software work the same way Napster’s service operated. Napster provided a service that directly helped its users find specific copyrighted songs. 

StreamCast provides no such service, but merely provides a Peer-to-Peer software

tool called Morpheus that permits users of the software to connect directly and form 

a decentralized user network. In contrast to Napster, StreamCast does not operate 

any user network, and it does not operate a file-indexing service. Users of the Morpheus software program take advantage of the program’s full file-sharing 

functionality without StreamCast’s continued involvement. Users join the user network, select which files to share, send and receive searches, and download files, all 

without the involvement of StreamCast. 

TECHNOLOGICAL INNOVATION AND THE BENEFITS OF P2P TECHNOLOGY

Unlike the media-conglomerates, consumers are not resisting change; they are encouraging and embracing it. They are clear about wanting commercial content available and wanting to create content to share as well as wanting a broadband connection. Like e-mail products before it, Peer-to-Peer communication tools are likely to 

drive the next wave of technology buying in the home and office. 

The rise of Peer-to-Peer networking is part of a long-standing historical trend in 

technological innovation: the migration of ever-more powerful publishing tools in the 

hands of individuals. The trend has been driven of obvious marketplace demand and 

individuals desire for tools that enable creation, reproduction and distribution of information. 

There is little debate that consumers around the world represent an incredible opportunity to release creative expression. Decentralized P2P offers the most cost effective and efficient distribution platform that exists today. By leveraging millions 

of consumers’ computers and their distributed bandwidth, enormous cost of goods 

savings are realized. For instance, when consumers launch the Morpheus P2P software, they join and help create a self-organizing, self-sustaining network of users 

around the world. The more users that join the network and share content, the richer the experience is for everyone. 

Consumer demand has spurred technological innovation that has delivered enormous benefits, both for society at large and copyright holders. Virtually every American has enjoyed the benefits brought by the audio-cassette recorder, the photocopier, the VCR, the personal computer, and the Internet. The copyright industries, 

meanwhile, have seen the size of their own markets, as well as the value of their 

content libraries, increase in part due to the new markets opened up by these new 

consumer technologies. Over the last century, new technologies and copyrighted 

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works have been complementary—advances in the former have, over time, invariably increased the value of the latter. 

Bearing in mind the enormous benefits of P2P available now and in the future, 

I urge you to consider the new threat to consumer’s freedom and privacy, as well 

as to the future of the Internet. Technology issues are difficult to get ones hands 

around, believe me as a CEO trying to make a new species of business work I understand the complexity of the situation the Committee is in. On one side you are 

being asked by multi-national media conglomerates to control consumer behavior 

and their use of various products and information like computers, personal listening 

devices and stereos. Rather than provide the consumer with a reasonable solution 

to consumer demand, the media companies have decided to sue the consumer directly arguably to force them ’back into line’’ as well as have requested Congress 

give them the ability to hack computers used by their consumers who use Peer-toPeer software products. Then on the other side are innovative technology companies 

that are creating technologies that need time to mature and be adopted by the 

mainstream public. Let’s not forget the driving force of this unfortunate battle between content owners and technology companies, the consumers, who are caught in 

the crossfire. 

THE HISTORY OF THE BATTLE BETWEEN TECHNOLOGY AND CONTENT

The battle over technology vs. content is nothing new. While it is natural to resist 

change, it is necessary for growth. 

History proves to be a valuable teacher. The content industries have repeatedly 

tried to repress new technologies. By way of example, piano rolls, radios, cassette 

recorders, VCRs, Digital Audio Tape, MP3 players, cable television, in-room video, 

and Replay TV were each met with content industries’ pessimistic pronouncements 

of gloom and doom and efforts to outlaw them. Fortunately, Courts have been reluctant to grant copyright owners the power to prevent technological innovation in 

order to gain control over their copyrights. Likewise Congress should continue to refrain from granting copyright owners the power to stifle new technologies. History 

proves that such technological innovations have not only made America and the 

world a better place, but have made the content industries and copyright holders 

richer too. 

This ongoing battle is best described in relation to the Betamax lawsuit in the 

1980s in which two movie studios filed a lawsuit hoping to stop the manufacturing 

and distribution of Sony Betamax VCRs. 

At the time, Jack Valenti, who heads the Motion Picture Association of America, 

went so far as to declare, ‘‘the VCR is to the American film producer and the American public as the Boston Strangler is to the woman home alone.’’ Fortunately for 

consumers and businesses alike, the Supreme Court of the United States sided with 

Sony. Not only did the sales of VCR boom, but also a flood of new revenue streams 

for Hollywood was created. 

In the 1940s, when radio was still considered a technological innovation by many 

American consumers, copyright holders were not being paid but consumers were 

nonetheless able to enjoy music for free. This technology first was used in homes 

and offices and eventually migrated to a mobile device, the automobile—a migration 

not too different from digital music’s route from desktops to MP3 players. 

Congress might have responded as Congressman Berman now suggests by allowing the copyright holders to attack the owners and users of radios. They could have 

passed a law that allows copyright holders to interdict, redirect, decoy, spoof, and 

signal-block or jam the radio airwaves preventing music from reaching consumers’

radios. 

Fortunately, no such law was passed. 

Had Congress permitted content owners to block or otherwise sabotage radio airwaves, radio might not exist as we know it today. In this situation, a very direct 

correlation exists where you as elected representatives can determine a successful 

outcome of the struggle for content owners trying to keep up with the pace of technological innovation. 

Congress has repeatedly stepped in to arbitrate between new technologies and 

copyright law. On some occasions, Congress has created compulsory licenses to mediate the tension. On other occasions, Congress has resisted entirely the demands 

of the copyright industries for control over new technologies. Today, there is no more 

cause to curb peer-to-peer technology in the name of preventing so-called ‘‘piracy’’

than there was to stop the VCR or radio. 

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CURRENT PROPOSALS

The legislative proposals on the table clearly do not have the consumer or the majority of content creators in mind and are neither reasonable nor workable. 

Senator Fritz Hollings introduced legislation along with five cosponsors on March 

21, 2002. The Consumer Broadband and Digital Television Promotion Act is a bill 

to regulate interstate commerce in certain devices by providing for private sector development of technological protection measures to be implemented and enforced by 

Federal regulations to protect digital content and promote broadband as well as the 

transition to digital television, and for other purposes. Because it essentially mandates that hardware be built according to the terms of multinational media companies instead of the technology companies creating the product to meet consumer demands, Senator Hollings’ proposal would be devastating to the future of innovation 

and entrepreneurship around the world. 

Over the past several months, multiple news services have reported that major 

record labels have launched an aggressive new guerrilla assault on the file-sharing 

networks by flooding online sharing networks with bogus copies of popular songs. 

Yet, it appears that Hollywood recognizes that such tactics may run afoul of state 

and federal laws, requesting that Congressman Howard Berman (D-CA) introduce 

legislation that would legalize their illegal actions. 

H.R. 5211 allows copyright owners to employ the methods of hackers such as 

interdiction, redirection, decoys, spoofing, and file-blocking. It not only proposes 

granting copyright owners a ’safe harbor’ from current state and federal laws, but 

also essentially makes copyright owners the proverbial ’long arm of the law’ to selfenforce rules set by the government without meaningful remedy for abuse of the 

rights requested in the legislation. 

It is interesting that Congressman Berman has chosen the end of session to introduce H.R. 5211 which would hobble a technology at the same time saying, 

‘‘. . . P2P represents an efficient method of information transfer and supports a variety of legitimate business models. Removal of all P2P networks would stifle innovation.’’ Further, it is at a time when analysts such as Josh Bernoff at Forester Research report that ‘‘[T]here is no denying that times are tough for the music business, but not because of downloading’’. 

It appears that a goal of the content industries who support The Consumer 

Broadband and Digital Television Promotion Act and/or Congressman Berman’s 

H.R. 5211 is simply to prevent the development of any technology—including the 

Internet—that is not designed or organized to maximize their own profits or to control so-called, ‘‘piracy’’; this despite the fact that history has consistently shown that 

suppression of technology is shortsighted. 

It is important to remember that the content industries do not represent all copyright holders or the public interest. Clearly, content industries desire laws to maximize their profits and without regard to how the public and other industries may 

be affected. Furthermore, to give one industry, namely the multi-media conglomerates, no matter how large and well-funded, the power to control innovation that 

affects countless other industries, would undermine the free flow of commerce that 

has brought the U.S. all the fruits of technological innovation. 

CONCLUSION

StreamCast believes that there is an array of reasonable solutions to the battle 

between the content industry and the technology industry over such issues as Peerto-Peer technology and use. Rather than adopt shortsighted, nonsensical, and overreaching laws like the ones suggested by Congressman Berman and Senator Hollings, Congress should facilitate a dialogue between the stakeholders in an effort to 

reach a reasonable, workable solution to these very important issues. If this fails 

to happen, the ordinary citizen, the consumer, is the one who will ultimately lose.

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PREPARED STATEMENT OF STEPHEN HINKLE

I bring this testimony to the aid of three file sharing services, and their parent 

companies, MusicCity, KaZaa, and Grokster. 

My name is Stephen Hinkle, and I currently work as a Network Tech for the City 

Heights Educational Pilot. The CHEP is an educational program in City Heights 

that works with some inner-city schools. I am also a computer science student at 

San Diego State University. 

I have been following this ‘‘internet music crisis’’ for a couple of years now. Every 

since the Recording Industry Association of America (RIAA) sued Napster, I was interested in following it. I have then written several articles for Boycott-RIAA.com, 

a site about the ‘‘bad acts’’ of the music industry and their effect on artists and consumers. 

As a consumer, a student, and a representative for the educational community, 

I have deep concerns that the RIAA, MPAA, and NMPA collaborating to try to shut 

down file sharing services will hurt the economy, emerging artists, consumers ‘‘fair 

use rights’’, and will hinder music distribution in cyberspace. 

History of File Sharing Cases: 

The RIAA first sued Napster, then Scour, then Aimster [now called Madster], and 

now MusicCity, KaZaa, and Grokster, and finally AudioGalaxy. In my opinion, the 

intent of these lawsuits was to bankrupt the file sharing companies, not to ever be 

‘‘fairly tried’’ by jury. 

For example, the plaintiffs in the AudioGalaxy case asked for over 100 million in 

damages. In the Scour case, the stakes were much higher, at 250 Billion. It seems 

like very few, if any business could pay such exorbitant amounts. Some of the people 

who operated the services got sued personally, which means that their own family 

could be in debt for life. 

In my opinion, and others I talked to, and from articles I have read, I believe that 

file sharing has substantial non-infringing uses, allows consumer ‘‘fair use’’, and can 

be an excellent content distribution medium. 

How File Sharing is good for Content Creators: 

Many musicians claim that file sharing actually helps them in music business. 

Many indie and major label artists think that file sharing is actually good, because 

it gives people a chance to hear their music, who would not hear it on the radio. 

Artists from BB King, Courtney Love, Janis Ian, Dave Matthews Band, Lara Lavi, 

The Rosenbergs, and many others say that ‘‘file sharing’’ has helped promote them, 

including sharing on the Morpheus, KaZaa, and Grokster networks. 

Major and independent label musicians have a lot to gain from P2P sharing, even 

if it is not financially. Many people that I talked to told me that they have bought 

more CDs as the result of getting to hear what they are buying first. 

A lot of bands want to use MP3 downloads for promotion, but the labels do not 

allow them to on their own web sites, and many have to turn to file sharing networks to do so. This is because the labels often make the artists sign their rights 

away. I know a lot of unsigned bands are beginning to use P2P companies to get 

their music known. The best-known program was Napster’s New Artist Program, before Napster went under. Now, others have taken over this task, including 

Streamcast Networks, by featuring new artists on their Morpheus service. Another 

example is Grokster’s partnership with GigAmerica, which features unsigned bands. 

Centerspan also allows unknown bands to be featured on their Scour service, as well 

as Universal’s Emusic. 

In addition to music, there are other good uses for P2P. Reelmind, the independent film organization, partnered with Grokster to promote its films on the 

Grokster P2P network. Other uses include photographs, cooking recipes, and efficient distribution of public domain or open source software. 

Consumer’s common uses of P2P: 

The number one use of P2P by most consumers is to download media files (music, 

video, etc), and to Discover New Music. Most consumers like a much bigger variety 

of media, than just what the RIAA and MPAA want people to hear or see. I have 

talked to many people on their uses of P2P, below are common things I have heard 

from them. 

In these days of high costs of living, many consumers are budget-savvy, and want 

to decide if something is worth buying. Many people, especially college students do 

not have too much money to waste on ‘‘bad CDs’’, or CDs that are not worth their 

money. So, they download a few songs off the CD, to see if it is worth their money. 

Many adults end up buying more CDs, by sampling first. 

135

The next common P2P use by consumers is to download songs they already own 

because it is easier to download a song, than it is to ‘‘rip’’ it for their CD. This 

should be a ‘‘fair use’’, since the consumer already owns the material. Many people 

do this for their computers in another room, at their office, or for their portable digital music players (often called MP3 Players, since MP3 is the most common format 

for compressed digital music). 

For many consumers who burn Audio CDs, they do not burn entire albums 

downloaded from P2P systems. Instead, they burn ‘‘custom collections’’. A custom 

collection is a selection of songs from many different artists or albums on the same 

CD. For example, if one wanted one song by Alicia Keys, another by Bob Dylan, another by Dixie Chicks, another by Mandy Moore, on the same CD, it would be a 

‘‘custom collection’’. 

The next reason that people use P2P is to obtain music, movies, or other content 

that is no longer sold in stores. For example, my mom could not find ‘‘White Bird’’

by ‘‘It’s a Beautiful Day’’, and she remembers it from her childhood. However, I 

punched it into Napster, and it was there! Many people use P2P for this, is because 

more than 60% of the music catalog of the labels is not sold at any given time. In 

my opinion, there is no cost to anyone, if the song or other content is no longer 

available anywhere else. 

For most video P2P users, they download TV shows they missed, or movies that 

they want to see if it is worth paying the high price of movie tickets for. Since the 

price of a movie ticket in San Diego (where I live), is about $9.00 per person, an 

that does not include Popcorn, Drinks, or other stuff you get at the movies, it is 

worth using P2P to ‘‘sample a movie’’ before you go see it. People will download clips 

of movies, or even an entire movie from a P2P service to see it is worth seeing on 

the big screen. 

Most video files are huge (between 650MB and 3GB for a two-hour film), and 

downloading one can take a lot of time (over 6 Hours on a Cable Modem), especially 

if the other P2P user has a slow uplink (most cable and DSL connections uplink 

much slower than they downlink). Since the space is so large, many users delete 

them shortly after they are played. Even if they get burned to CD for permanent 

storage, the quality is usually nowhere near broadcast or cinema. 

For other content, some people said they download Software, books, and the like. 

Many users who do this are low income, and many people told me that they would 

buy a copy, if they could do so. Also, many people download ‘‘free’’ software, which 

is software licensed for open source distribution. Linux is one example of this. 

Consumer reactions to legal actions against P2P: 

Many consumers were upset when P2P companies such as Napster and Scour got 

sued. Many consumers loved the fact that they could get easy access to a vast library of media. The selection offered was better than any record or video store on 

the planet. When the injunction that ordered Napster to be shut down, consumers 

began to hate the music industry, and when the artists came out on how their labels 

cheated them out of being paid from their CDs, people no longer wanted to support 

the industry’s side. 

When the RIAA started threatening college campuses to block access to P2P in 

their dormitories, it made many college kids upset. In response to these attacks, 

P2P developers worked to make their network harder to block or shut down. Also, 

it made a lot of college kids not want to buy the CDs of the company that did this. 

At San Diego State University, who instituted the blocking with Packeteer (a company who markets filtering for P2P sharing), now use all sorts of tricks to get 

around the block, such as running Gnutella clients, and share within the dorm network, and use hard to block programs P2P like Filetopia 3.0 (which combines Random Ports, Decentralization, and High-Bit Encryption). 

Many consumers now feel that their data is at risk, with the event of the Howard 

Berman Bill, which would legalize some P2P hacking attacks, and Denial-of-Service 

attacks against consumers. Many tech-savvy consumers say that this is taking 

things too far. The Electronic Frontier Foundation, Boycott-RIAA.com, and 

DigitalConsumer.org, report that consumers’ privacy is at risk, as well as their constitutional rights. I believe this too, and that is one reason I am writing this testimony. This prompted Information Wave Technologies to block the RIAA and its 

‘‘hired spies’’ from accessing its network. 

With the P2P lawsuits, consumers and artists alike began to question the music 

industries practices of greed, and many of them are getting heavily exposed. Many 

consumers and artists are appalled that artists can sell millions of records and 

make nothing off of them. As such, coalitions such as the Recording Artists Coalition, Digital Consumer, Future of Music, and others were formed. 

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Consumers are upset and more concerned, by the music and movie industries trying to mandate Digital Rights Management technology (DRM) in almost every electronic device. This would seriously limit what ways that one could use a computer, 

and even give them ‘‘unfair competition’’ because their definition of ‘‘unauthorized’’ would include everything not owned by their oligopoly. Independent musicians, software writers, filmmakers, and the like should be able to distribute content in unprotected format if they choose. Licenses like the GNU General Public License, the 

Open Audio License, and others are designed to specifically allow distribution. 

The proposed CBDPTA bill, that Senator Fritz Hollings wrote would ban even emailing a friend a word document, or being able to turn in a program you created 

for a programming class. As a member of the academic community, with the use 

of distance education becoming more common, this bill would kill it. Consumers are 

upset that the RIAA and MPAAs attempt to ban a technology, just because it could 

be used for infringing copies. History has shown that every technology the entertainment industry has been afraid of has benefited them. This has been true with 

tapes, CDs, VCRs, MP3 Players, DAT Recorders, and the like. 

Many consumers are worried that the industry is lobbying to take away the rights 

to copy ANY digital medium, and that the industry is taking their ‘‘fair use’’ rights 

away. Fair use rights include ‘‘space shifting’’ (to move data from one medium to 

another, or to another room in their home, or to their car, etc), ‘‘time shifting’’ (to 

record a broadcast and play it back later), ‘‘quoting’’ (to use a small sample for 

speech or academic projects), and ‘‘reverse engineering’’ (to figure out how a device 

works, to make something compatible with a device or format (such as emulation 

or interoperability). 

The entertainment industry has sued literally every device maker, claiming that 

every new feature is ‘‘copyright infringement’’, and some under the Digital Millennium Copyright Act (DMCA). For example, the RIAA tried to stop the sale of MP3 

players. The MPAA are trying to stop the sale of ReplayTV recorders because they 

can send shows to other units, and skip commercials. The same happened with 

DeCSS and the Advanced E-Book Processor from Elcomsoft. These devices have 

‘‘fair uses’’, even if the consumer can make a digital copy with no quality degradation. One such example is to open an e-book on a Macintosh or Linux computer. 

Lets face it, just because a device can allow the consumer to make a perfect copy 

does not mean it should be banned. If that were true, the photocopier should be 

banned too! If one puts money, or a government document into a color copier, this 

does not stop it from copying it, doesn’t it? Plus, there is nothing in the copyright 

law that says that a consumer made copy has to be lower in quality than the original. It is a common industry myth that this is true, but it is not. A ‘‘fair use copy’’

can be in perfect, digital, form. The consumers are infuriated, and they do not want 

to buy the products of the people putting out this propaganda. 

How the labels pay subscription services are no comparison to the content and catalog offered on most Peer-to-Peer systems today: 

First of all, the catalog of content offered on the labels sites (such as MusicNet, 

PressPlay, FullAudio, and Rhapsody) is no comparison to the catalogs of P2P systems like KaZaa, Gnutella, Blubster, and Morpheus. In addition, many ‘‘licensed’’

services have tracks just from a few labels, and just selected tracks from those labels. Many people, who use the ‘‘licensed’’ services, have to subscribe to many different services to get the music they want. 

Next, many ‘‘licensed’’ services use encrypted file formats, which make the files 

unusable with many media player programs, CD burning programs, portable player 

device and many non-windows operating systems (such as Mac OS, Linux, BeOS, 

Lindows, Unix, etc). Often, the formats of the licensed services are specific to a service, and the user cannot organize all their tracks easily. For example, MusicNet uses 

RealAudio format, which means you must use the Realone player to play your 

tracks, and it offers tracks from BMG, EMI, Warner Bros, and Zomba. Next, you 

also realized you want some Willie Nelson, which is on Universal. You then subscribe to PressPlay, and find out that your Realplayer cannot play the tracks, and 

you must now use Windows Media Player. Now, you learn that you have to subscribe to TWO services, and have to use TWO different media players, so you cannot 

play one after another in a play list, since the files are incompatible. 

However, if the same user were to download LimeWire, Morpheus, or KaZaa, they 

would have found the same musical groups in a format (most likely MP3 or OGG), 

which many media players can play. It is more of a ‘‘one stop’’ place to find the content they want. 

Many label owned services usually limit the bit rate that files can be downloaded 

it. Most label owned services offer between 64K and 160K bits per second. Most P2P 

systems offer higher bit rates, which means the sound from the files is generally 

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better. It is not uncommon to find files ranging from 128K to 320K on LimeWire 

and Grokster. 

Next of all, most people who download expect to be able to use the files they 

download on their portable players. Like I have said above, most people want to 

download the music they have and use it on their portable player. Many people prefer to download than ‘‘rip’’, because it is easier. Most label-owned services offer little 

or no ripping capability. Even porting of MPEG video to portable devices is becoming more common. Most Laptop computers will play MPEG videos. Archos is making 

a handheld device that can play MPEG, and other video files. People often take 

portable devices in cars, airplanes, to the office, jogging and other places, because 

they can hold a lot of music and other content, and are easy to use. 

I, and other people I have talked to, are dissatisfied with the security (copy protection) of most label owned music sites, because it impairs the users ability to 

make a backup copy of their downloads. Consumers should have the right to backup 

their paid-for downloaded content to floppy disks, Data CDs, Zip Disks, Tape Drive, 

RAID Drives, Network Backup Systems, and other media, and be able to restore it 

without wasting a license, or the content becoming unusable after the restore. 

This ‘‘anti-copy’’ technology also has other drawbacks. You are not allowed to 

‘‘move’’ the content you legally have the rights to play to another computer (such 

as your laptop, or when you upgrade, and the like. It also prevents many Macintosh 

and Linux computers from even being able to play it. For users at work, and the 

like where their ‘‘My Music’’ folders are stored on the network server (such as with 

Windows/Novell/Linux domain controllers), it disables them almost instantly, because of the syncing involved. 

Consumers want to be able to keep the content they download. Most pay services 

have the content ‘‘self destruct’’ after a set number of days, becoming a non-subscriber, or after a set number of plays. Most P2P systems offer ‘‘unlimited play’’ content. Many people I know are proud of their digital libraries, and do not want to 

have to pay more fees to play their content down the road, especially users with 

slow modems. 

Last of all, many people expect to be able to CD/DVD burn the music or movies 

they download. People have expected this since Napster, and they will continue to 

do so. Most people are likely to pay for ‘‘newfangled’’ stuff, not ‘‘limited use’’ stuff.

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How P2P is not a ‘‘Company Controllable Medium’’: 

Peer-to-Peer means in reality ‘‘consumer to consumer, with no middleman. In 

many of today’s P2P networks, there is not any company responsible for the content. 

In a P2P system, you are dealing with 3 separate ‘‘entities’’, the software creator 

(who creates the actual P2P software program), the directory system (which inventories the files of the various computers sharing data), and then the nodes (which 

are the actual computers sharing data with each other), many of which can be individuals, companies, or automated functions. 

In Centralized P2P systems, the directory system is usually run by a company or 

individual, where all the nodes connect to a central server, and the central server 

‘‘catalogs’’ what files the users are sharing. This medium is easily controllable for 

copyright infringement, because blocking can be installed. Napsters, Opennap, 

Scour, are examples of this system. Below, shows the model of a centralized P2P 

system:

With the response to the Napster and Scour lawsuits, most P2P systems are decentralized these days. This means that all the nodes do not go through a central 

server. Instead, the directory system, either involves sequential broadcasting (as in 

Gnutella, LimeWire, Blubster, etc), or ‘‘Supernode Hubs’’ (as in KaZaa and 

Grokster). This means that the directory, uploads, and downloads are all done without the use of a central login server. This results in a total disconnection from the 

system developers and the users. Often every node is a client, server, and a directory station. The computers connect directly with each other, without a central point. 

When most people launch a decentralized P2P client, it tries to connect a list of 

hosts (i.e. other computers running the same piece of software at the same time), 

till it finds one. This ‘‘list of hosts’’ is stored locally on the user’s computer. Sometimes servers or other hosts store lists of hosts, and searches come through to them. 

Once a few hosts are found, and the user is connected he/she can search for content. 

If a host is not found, the user in many cases can manually enter the IP address 

and port of another user. 

When a search query, is executed, the computer sends it to his/her connected 

hosts. If anything is found in their shared folder, it is sent back. It then broadcasts 

the query to any other hosts those hosts are connected to. This continues many levels deep. Since many computers are connected to different hosts, the search continues. 

When one chooses a file from a search that he/she wants, the hosting computer 

is told to upload a copy of it to the computer that requested it. One the next page, 

there is a diagram of a decentralized system. 

A Network diagram of a decentralized P2P system:

This decentralized design means that ‘‘spying’’, monitoring users conduct, censoring copyrighted content, and the like nearly impossible. Since there is no company or government ‘‘middleman’’, these networks are almost unstoppable. A lawsuit would be useless in stopping this kind of network. As you can see from the diagram, there is no one node that can turn all the other nodes off. These networks 

are very fault tolerant. 

With some networks (such as Nucleus and giFT), having open source code, it 

means that the creators are individuals, not companies. This means that they probably do not have $150,000 for each work infringed on their networks, for files they 

did not share themselves. Even if the creators of a network go bankrupt, the software loaded on client hard drives will still work. This means that these networks 

have the potential to work almost forever, and they should be used to their biggest 

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Compensating Creators in a Peer-to-Peer world: 

Since copyright is not always enforceable in a peer-to-peer world, there are various approaches to compensate artists and other content creators for their work 

downloaded on P2P networks. The music and movie industries are concerned that 

artists, and producers will never be paid, and P2P results in ‘‘theft’’ of their content. 

They also claim that it bypasses their ‘‘monopoly distribution control’’. 

Many content creators need to make a living. An artist’s job is to perform music. 

A songwriter’s job is to create songs. TV-Show producers and movie producers deserve to be paid for their work. There are many ways to compensate the creators 

in a P2P world. Many of the schemes would even work on an open source, decentralized system. 

For centralized systems, the easiest way is to license content to the P2P company, 

and charge for access, or sells banner or pop-up ads. SongSpy, and Scour are doing 

this now. Right now, it is hard for independent companies (i.e. not owned by RIAA 

or MPAA member companies) to get licenses for major label music. In addition, the 

Musicnet/PressPlay exclusive contracts generally make it hard for one to get licenses from all the labels. The Music Online Competition Act, proposed by rep. Rick 

Boucher, and rep. Jack Cannon would ease this licensing hassle. Ultimately, compulsory licensing may be the only solution to really fix the problem. 

The Department of Justice is currently investigating the labels licensing practices. 

The RIAA represents foreign corporations, such as Sony, which is based in Japan. 

In addition, the record labels are being investigated for fraud. They are trying to 

monopolize all ’new media technologies’’, to the point in which new mediums cannot 

be invented by non-member companies, or without their permission. 

For the decentralized systems, compensation is a little bit harder. However, myself, along with Ian Clarke of Freenet, and Matt Goyer of Fairtunes, beleive that 

it is possible to ‘‘reward artists without copyright’’. There are many ways of doing 

so, even if a company does not run the distribution system. 

Fairtunes (now MusicLink) created an ‘‘artist tipping’’ system. This system allows 

one to use their credit card, and Fairtunes would send a check to the artist or songwriter. Some clients like Kick and Freeamp, have built in Fairtunes/MusicLink tipping. This has generated many thousand dollars to artists by people giving voluntary compensation. Adding this kind of a feature to any P2P system (including 

decentralized systems) is easily doable. Many artists believe that the current system 

of copyright and label ownership is failing to reward artists. On VH-1s show ‘‘Behind the Music’’, you hear story after story of artists being ‘‘ripped off’’ by the music 

industry. 

Another way of compensation that I propose myself, would be to embed royalties 

in the price of BLANK CDs, DVDs, MP3 Players, and the like. This could generate 

a lot of revenue, and for each ‘‘royalty paid’’ disk, you get a license to fill it up with 

content from P2P systems, ‘‘rips’’, and other content. 

Another way that I thought of would be to tax Internet service. If each user paid 

a monthly fee of $0.35 for dial up connections, and $1.00 per month for broadband, 

this would generate tens of millions of dollars per month, or billions annually. These 

royalties could be passed on to artists, songwriters, TV show producers, movie producers, movie studios and the like. I think that a reasonable distribution of these 

‘‘taxed’’ funds, should be a 47-47-6 distribution. That is 47% of the money go to the 

individuals that create the content (i.e. artists, songwriters, actors, producers, etc), 

and 47% to the companies that create the work (such as labels, publishers, studios, 

game companies, etc), and leave 6% for independent, unsigned groups (such as independent filmmakers, unsigned bands, garage bands, local bands, K-12 Music Programs, College Music Programs, church choirs, youth choirs, etc). 

The system should have a means to get these royalties to the parties, quickly and 

efficiently. If the payments are through an agency, it needs to be totally neutral (i.e. 

not owned by any artist, songwriter, record label, music publisher, movie studio, 

game company, or lobby or trade organization). An independent organization along 

the lines of ASCAP or BMI would be best in my opinion. In any case, it should be 

frequently and publicly audited. 

Fair Use and how Digital Rights Management is not the solution to this P2P issue: 

First of all, digital rights management (DRM) is designed to restrict use, not to 

benefit the consumer. This technology limits use, and in fact often alienates the consumer. The next problem is that DRM in not secure forever. All DRM is hackable 

in some form. Last of all, according to Professor Leland Beck at San Diego State 

University told me that ‘‘encryption’’ is not a good copy protection system, because 

it does not prevent bits of data from being copied at all, it only prevents reading 

and decoding of data. 

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The nature of digital technology is that every bit of information is encoded into 

ones and zeros. This means that all that any digital chip can detect are ones and 

zeros. This makes ‘‘perfect’’ copies the norm. If you can find every bit that a medium 

can detect, and put it to the exact same location on the destination, the copy will 

be seen as an original. 

People have used copy protection technology for years. Back in the Apple II days, 

copy protection on disks was the norm. Yet, people and companies figured out the 

protection systems, and wrote software that would copy it. Central Point Software

wrote a new version of Copy II, every time a new protection system was released 

that would copy those protected disks. Also, people rejected the copy-protected disks, 

and some customers refused to buy copy-protected software if there were an unprotected competitor. A court case in 1984 proved that a program that copied protected 

disks could be sold, since it allowed the user to make backup copies. 

The music industry should have learned that copy protection is hacked quickly. 

It took Professor Felten and his students only a few weeks to crack the Secure Digital Music Initiative (SDMI) audio watermark schemes. Beale Screamer created a 

utility called FreeMe that unprotects WMA audio files. It did not take screamer long 

to crack that. 

Even encryption built into hardware can be cracked. Many coin-op arcade games 

had hardware DRM built into them. Yet, many of them have been cracked, often 

within a few months after the release. Many emulator developers have also cracked 

arcade games to play them on a PC. Team CPS2Shock figured out a way to decrypt 

games on the Capcom Play System 2 Arcade System by using some code of their 

own in RAM on the board, and some wiring to a PC. The DVD encryption was figured out by a 16-year old named Jon Johansen to play his DVDs on a Linux computer. 

Next of all, the DRM is only as good as a player that honors it. For example, if 

one has a sound card with no digital ‘‘record back’’ disable, and one ‘‘records’’ the 

protected content back to disk and saves it as MP3, they can now share it over 

Gnutella. Even connecting the analog out to another computer’s analog in is a way 

to unprotect content. 

Lets face it no DRM system is secure forever. Mandating security standards into 

computers, like the Hollings Bill would require would just cause the consumer frustration, and that it will encourage a hacker to figure it out. Also, new formats will 

not be secure with old DRM chips. Michael Eisner from Disney was asked, what 

if one records a movie in a theatre, saves it in a format the DRM in the computer 

does not recognize, and then shares that file over Gnutella? His answer is ‘‘nothing’’! 

Last of all, DRM limits fair use. People have ‘‘fair use rights’’, to time shift, space 

shift, to reverse engineer, to quote, and the like. Limiting these creates headaches 

for a lot of people. Being locked out of content will just ENCOURAGE hackers to 

break the DRM code, just like prohibition did with liquor in the 1920s. 

DRM will not solve the P2P issue. It will just encourage the development of unprotected formats. Even if illegal, people will download and create these formats 

anyway. In my opinion, there is no way to stop a consumer getting an unprotected, 

perfect copy of content in the digital world. 

Spying on consumers as ‘‘copyright police’’ is not a viable option too. This option 

is expensive. It also violates ones rights to ‘‘innocent until proven guilty’’, ‘‘right to 

a fair trial’’, and the like 

Placing ‘‘Spoof’’ files on P2P networks that contain 30-second loops or 3 minutes 

of silence is not a long-term solution either. It just infuriates the consumer, and 

does not stop them from downloading ‘‘real’’ content files. Also, it is encouraging the 

development of blocking systems that the consumers are using to block known 

‘‘spoof IP Addresses’’. 

Conclusion: 

I hope that congress takes my input, and puts P2P to good use, and understands 

how it benefits all, including consumers, artists, and the like. I do not think it is 

worth banning, and it should be legal to use it, and not have the content available 

on P2P Networks censored or controlled by large corporations.

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PREPARED STATEMENT OF PANOS ANASTASSIADIS

Thank you for the opportunity today to submit our insights regarding piracy on 

distributed Peer-to-Peer networks. 

Cyveillance is engaged in providing Internet Intelligence services to a client list 

that includes 19 of the Fortune 50 companies, and I assure you that all of these 

firms share the same concerns regarding the theft of intellectual property via the 

Internet. In fact, what drives our business success is the huge potential that exists 

today in recapturing revenues lost due to such activity. 

Our services are underpinned by patented technology that scours the entire Internet and delivers distilled, 100% relevant intelligence provided in a prioritized manner that can be readily acted upon. 

It is interesting to note that distributed Peer-to-Peer networks are only one portion of the Internet that experiences traffic in IP theft, even though they by far experience the highest volume of such activity. Web sites, message boards, IRC chat, 

FTP, newsgroups and auction sites all experience their share of discussion and participation in the theft of Intellectual and Physical property. 

The size of the piracy problem itself is not a new discussion topic. And the medium that has received the most press to date—helped along by the Napster case—

has been music. But, as we know with anything facilitated by technology or the 

Internet, the issue has spread and evolved rapidly. 

Today for example, it is estimated that over 20 million movies are being 

downloaded each month. Billions of dollars of intellectual property from the largest 

businesses in the world are impacted by IP theft to include music, motion pictures, 

games, software and ePublishing. The most trafficked area of the Internet for such 

illegal activity is on distributed Peer-to-Peer networks; just yesterday, September 

25, the most active distributed Peer-to-Peer network had 2,940,981 users online, 

and that was just one network. 

We use the term ‘‘distributed’’ Peer-to-Peer network because there is a difference. 

For example, Napster (not ‘‘distributed’’) faced a legal challenge that centered 

around the means of distribution and how the files were managed. In the Napster 

case, file catalogues were centrally housed and managed. On true ‘‘distributed’’

Peer-to-Peer networks however, there is no centralized catalogue and the network 

owners clearly state that they have no control over content. 

Distributed Peer-to-Peer networks and the efficiencies of their architecture provides many positive benefits to the online community as a whole, although sharing 

legally-protected intellectual property is not one of them. 

For the rightful owners of intellectual property, effectively addressing the piracy 

issue is not a singular effort but a multi-pronged approach. As a leader in Internet 

Intelligence, our experience has shown that a best-practice approach will include a 

number of components:

1. Further educate consumers on the fact that downloading proprietary content is not ‘‘ok.’’ An entire generation of users has grown up under peer assumptions that there is nothing wrong with downloading proprietary content.

2. Gain awareness of the size and scope of the problem through technology 

monitoring. You cannot manage what you cannot see. This can only be accomplished through proven Internet Intelligence technology.

3. Enforce and protect what is rightfully identified as IP theft. Not taking action is not an option.

4. Offer reasonable and legal alternatives to obtaining quality files and IP. 

The industries experiencing theft must come up with reasonable legal alternatives before the public will adopt proper channels of obtaining content. ‘‘

Reasonable’’ includes pricing that compensates the owners and distributors, 

but reflects the lower cost of distribution over the Internet, thereby creating 

a win/win with consumers.

5. Measure the size of the problem on an ongoing basis. Employ technology to 

monitor success and trends.

In order to realize the benefits of such a plan as described, businesses should not 

be handicapped in their ability to work with effective self-help technology measures 

that cause no damage to non-offenders on the networks or the networks themselves. 

These barriers should be removed by the modification of the Digital Millenium 

Copyright Act (DCMA) to include notice on distributed Peer-to-Peer networks.

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1For example, a speaker at this year’s H2K2 ‘‘Hackers on Planet Earth’’ conference reportedly 

suggested using the attack that Mr. Saaf calls ‘‘Interdiction’’ against governmental and institutional Internet sites as a form of ‘‘online demonstration.’’

PREPARED STATEMENT OF EDWARD W. FELTEN

To the Distinguished Members of the Subcommittee on Courts, the Internet, and 

Intellectual Property: 

I am writing to provide an independent perspective on some technical issues 

raised by Congressman Berman’s proposed ‘‘P2P Piracy Prevention Act’’ (the ‘‘Berman Bill’’). I offer this testimony in the hope that it will help the Subcommittee better understand the technical effects of the Berman Bill. 

I write as an expert on computer security. I am an Associate Professor of Computer Science at Princeton University, and Director of Princeton’s Secure Internet 

Programming Laboratory. I have published more than fifty research papers and two 

books, and my research has been covered widely in the national press. In addition 

to my service on corporate advisory boards, I serve on the Information Science and 

Technology (ISAT) advisory board of the Defense Advanced Research Projects Agency. I am co-chair of an ISAT study on ‘‘Reconciling Security with Privacy,’’ and am 

a member of the National Research Council’s study group on ‘‘Fundamentals of 

Computer Science.’’ I have also served as the primary computer science expert witness for the Department of Justice (DOJ) in the Microsoft antitrust case, and as a 

technical advisor to the DOJ’s Antitrust Division under both the Clinton and Bush 

administrations. 

I share the Subcommittee’s condemnation of widespread on-line copyright infringement. I support both legal action against copyright infringers, and technical 

self-help by copyright owners within the bounds of current law. The issue is not 

whether copyrights should be honored, nor whether the Berman Bill is well-intentioned, but rather what effect the bill would have. 

I would like to bring two things to the Subcommittee’s attention. 

First, the Berman Bill’s definition of ‘‘peer-to-peer’’ may be problematic. Peer-topeer networking is not a new phenomenon, but has been the dominant mode of operation since the very beginning of the Internet. The World Wide Web itself is a 

peer-to-peer file sharing system, as the term ‘‘peer-to-peer’’ is commonly understood. 

More to the point, the Web clearly meets the Berman Bill’s definition of ‘‘publicly 

accessible peer-to-peer file trading network.’’ Therefore, the bill, as written, flatly authorizes ‘‘self-help’’ attacks on the World Wide Web, and not just on users of file-trading networks like KaZaa and Gnutella. 

It seems difficult to redraft the bill to carve out the Web and other legitimate network services, without creating an escape hatch for the types of peer-to-peer networks that the bill’s supporters would like to see covered. The reason for this difficulty is simple: there is really little difference at a technical level between the Web 

and peer-to-peer systems like KaZaa and Gnutella. The difference between these 

systems is not so much in how they are designed, but rather in what their users 

do with them. 

(I also note in passing that the bill’s exception for systems that ‘‘route all . . . 

inquiries or searches through a designated, central computer’’ may not have the effect that the bill’s drafters envisioned. Nowadays large sites do not use a single 

‘‘designated, central computer,’’ but instead use a group of computers which cooperate to serve users’ requests. It would appear, therefore, that the bill’s ‘‘designated, 

central computer’’ exception would cover few if any of the large central sites for 

which the exception appears to be intended.) 

Second, there is reason to doubt the efficacy of the technical measures that copyright owners want to use. 

The copyright owners’ representatives who testified in person at the Subcommittee’s hearing could identify only one technical measure they plan to employ if the 

Berman Bill is enacted. This measure, which they call ‘‘Interdiction,’’ was described 

in the written and oral testimony of Mr. Randy Saaf. Based on Mr. Saaf’s description, ‘‘Interdiction’’ is apparently just a new name for a well-known type of denial 

of service attack.1

A ‘‘denial of service attack’’ is a hostile action that exhausts the resources of a 

system or program, so that that system or program cannot operate, or can operate 

only in a degraded fashion. Some denial of service attacks seek to overwhelm a target computer’s Internet connection with traffic, while others seeks to exhaust some 

other resource that the target needs. 

For example, the so-called ‘‘SYN flood’’ denial of service attacks that (temporarily) 

disabled CNN, eBay, Yahoo!, and Amazon, in February 2000, disabled the target 

systems by initiating network connections with the targets in such a way that the 

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2 I understand that the House of Representatives uses technical means to prevent peer-to-peer 

file trading by its employees. Of course, the ability of an organization such as the House to control the use of its own systems does not imply that copyright owners can exert the same level 

of control on others’ systems.

targets were no longer able to accept further connections. Though the targets had 

plenty of spare communication bandwidth available, that bandwidth did them no 

good since they could not accept any more incoming network connections. 

‘‘Interdiction’’ operates on a similar principle. According to Mr. Saaf’s written testimony:

MediaDefender’s computers hook up to the person using the P2P protocol being 

targeted and download the pirated file at a throttled down speed. 

MediaDefender’s computers just try to sit on the other computers’ uploading 

connections as long as possible, using as little bandwidth as possible to prevent 

others from downloading the pirated content....

The goal is not to absorb all of that user’s bandwidth but block connections to 

potential downloaders. If the P2P program allows ten connections and 

MediaDefender fills nine, we are blocking 90% of illegal uploading.

At present, Interdiction attacks apparently deny service only to the peer-to-peer 

program running on a user’s computer, and not to any other programs. The designers of peer-to-peer software will not simply accept this situation, but will respond 

by modifying their software to thwart such targeted denial of service attacks. They 

might do this, for example, by eliminating the self-imposed limit on the number of 

connections the peer-to-peer program will accept. These countermeasures will start 

an ‘‘arms race’’ between copyright owners and peer-to-peer system designers, with 

copyright owners devising new types of targeted denial of service attacks, and peerto-peer designers revising their software to dodge these targeted attacks. 

Computer security analysis can often predict the result of such technical arms 

races. For example, analysis of the arms race between virus writers and antivirus 

companies leads to the prediction that antivirus products will be able to cope almost 

perfectly with known virus strains but will be largely helpless against novel viruses. 

This is indeed what we observe. 

A similar analysis can be applied to the arms race, under the Berman Bill’s rules, 

between peer-to-peer authors and copyright owners. In my view, the peer-to-peer authors have a natural advantage in this arms race, and they will be able to stay a 

step ahead of the copyright owners.2 Copyright owners will be forced either to give 

up on the strategy of narrowly targeted denial of service attacks, or to escalate to 

a more severe form of denial of service, such as one that crashes the target computer or jams completely its Internet connection. I understand that these more severe attacks are currently illegal, and would not be legalized by the Berman Bill, 

so such an escalation would not be possible within the law even if the Berman Bill 

is enacted. I conclude that the Berman Bill as written is unlikely to do copyright 

holders much good in the end. 

Æ