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PIRACY OF LIVE SPORTS BROADCASTING 

OVER THE INTERNET 

HEARING 

BEFORE THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

DECEMBER 16, 2009 

Serial No. 111–94 

Printed for the use of the Committee on the Judiciary 

( 

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

(II) 

COMMITTEE ON THE JUDICIARY 

JOHN CONYERS, JR., Michigan, Chairman 

HOWARD L. BERMAN, California 

RICK BOUCHER, Virginia 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

WILLIAM D. DELAHUNT, Massachusetts 

ROBERT WEXLER, Florida 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO PIERLUISI, Puerto Rico 

MIKE QUIGLEY, Illinois 

JUDY CHU, California 

LUIS V. GUTIERREZ, Illinois 

TAMMY BALDWIN, Wisconsin 

CHARLES A. GONZALEZ, Texas 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California 

LINDA T. SA ́ NCHEZ, California 

DEBBIE WASSERMAN SCHULTZ, Florida 

DANIEL MAFFEI, New York 

LAMAR SMITH, Texas 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

DANIEL E. LUNGREN, California 

DARRELL E. ISSA, California 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM ROONEY, Florida 

GREGG HARPER, Mississippi 

PERRY APELBAUM, Majority Staff Director and Chief Counsel 

SEAN MCLAUGHLIN, Minority Chief of Staff and General Counsel 

(III) 

C O N T E N T S 

DECEMBER 16, 2009 

Page 

OPENING STATEMENTS 

The Honorable John Conyers, Jr., a Representative in Congress from the 

State of Michigan, and Chairman, Committee on the Judiciary ..................... 1 

The Honorable Lamar Smith, a Representative in Congress from the State 

of Texas, and Ranking Member, Committee on the Judiciary ......................... 1 

The Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress 

from the State of Georgia, and Member, Committee on the Judiciary ............ 2 

WITNESSES 

Mr. Michael J. Mellis, Senior Vice President and General Counsel, MLB 

Advanced Media, L.P. 

Oral Testimony ..................................................................................................... 3 

Prepared Statement ............................................................................................. 6 

Mr. Lorenzo J. Fertitta, Chief Executive Officer, Ultimate Fighting Championship 

Oral Testimony ..................................................................................................... 12 

Prepared Statement ............................................................................................. 14 

Mr. Michael Seibel, Chief Executive Officer, Justin.tv Inc. 

Oral Testimony ..................................................................................................... 25 

Prepared Statement ............................................................................................. 27 

Mr. Ed Durso, Executive Vice President, Administration, ESPN, Inc. 

Oral Testimony ..................................................................................................... 35 

Prepared Statement ............................................................................................. 37 

Mr. Christopher S. Yoo, Professor of Law and Communication, University 

of Pennsylvania Law School 

Oral Testimony ..................................................................................................... 42 

Prepared Statement ............................................................................................. 44 

APPENDIX 

Material Submitted for the Hearing Record .......................................................... 75 

(1) 

PIRACY OF LIVE SPORTS BROADCASTING 

OVER THE INTERNET 

WEDNESDAY, DECEMBER 16, 2009 

HOUSE OF REPRESENTATIVES, COMMITTEE ON THE JUDICIARY, Washington, DC. 

The Committee met, pursuant to notice, at 11:13 a.m., in room 

2141, Rayburn House Office Building, the Honorable John Conyers, 

Jr. (Chairman of the Committee) presiding. 

Present: Representatives Conyers, Jackson Lee, Waters, 

Delahunt, Johnson, Quigley, Smith, Coble, Goodlatte, Issa, and 

Rooney. 

Staff Present: (Majority) Jason Everett, Counsel; Kirsten Zewers, 

Counsel; Brandon Johns, Clerk; and (Minority) David Whitney, 

Counsel. 

Mr. CONYERS. The Committee will come to order. 

Good morning everyone, particularly our witnesses. This is a 

hearing on Piracy of Live Sports Broadcasting Over the Internet. 

The purpose of the hearing is to examine how the piracy of live 

sporting events over the Internet impacts sports leagues, consumers, broadcasters, and the unique challenges copyright owners 

face in attempting to enforce their rights on the Web page. More 

and more of other media, the music, the TV shows, and the sports, 

is moving to the Internet. Piracy has increasingly injured artists 

and intellectual property owners as individual consumers have access to faster, more powerful Internet connections. 

The Judiciary Committee has convened today’s hearings to discuss an emerging form of piracy, that of live broadcast in real-time, 

especially with regard to sporting events. This is supposed to allow 

us to examine how new technologies that allow for the streaming 

in real-time of sporting events also may allow individuals to evade 

intellectual property laws. And so I look forward to learning from 

our witnesses about the frequency of Internet piracy of live sporting events, how this type of piracy could negatively affect consumers and what we may want to do about it. 

I am pleased now to recognize my friend from Texas, Lamar 

Smith, the Ranking Member. 

Mr. SMITH. Thank you, Mr. Chairman. This oversight hearing focuses on an emerging and disturbing new aspect of Internet piracy, 

the unauthorized streaming of live television programming. Today 

the Committee will consider the impact of this piracy on sports 

leagues. The programming produced by professional and college 

sports associations, such as the Major League Baseball, the NaVerDate Aug 31 2005 16:19 Jul 14, 2010 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6601 H:\WORK\FULL\121609\54075.000 HJUD1 PsN: 54075
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tional Basketball Association, the Ultimate Fighting Championship, and the National Collegiate Athletic Association, is among the 

most popular and unfortunately the most pirated programming in 

the world. 

Sports leagues are investing significant amounts to monitor the 

piracy of their property and provide notices to Internet service providers and web site operators to take down illegally posted content. 

The cost of these efforts are then passed on to sports fans and consumers when they purchase tickets or subscribe to sports networks. 

Leagues spend billions of dollars annually to build and market 

their brands. Half or more of their revenue is generally derived 

from exclusive television deals, Pay Per View sales, and licensed 

Internet distribution. 

The unauthorized distribution of all forms, live and preproduced 

video programming, is widely and readily available via the Web. 

An example of this is when pirated movies become available on the 

Internet before they are released in movie theaters. There is an old 

expression that applies here, why buy the cow if you can get the 

milk for free? Why pay the sporting event when you can watch it 

on line for free? 

The wider adoption of broadband technologies, the widespread 

availability of inexpensive devices to upload television signals to 

the Web and the global nature of the Internet together pose enormous challenges to rights holdings. 

The Organization for Economic Cooperation and Development 

has declared the use of P-to-P networks for live piracy has become 

‘‘a significant threat for the sportscasting industry.’’ The United 

States Trade Representative has noticed that China, which today 

has more Internet users than any other nation, is a nation of particular concern when it comes to Internet piracy. 

Internet piracy, particularly the theft of live programming, has 

increased dramatically in recent years. It is clear we need to assess 

the state of the law and technology and to begin consideration of 

the steps that ought to be taken domestically and internationally 

to respond to this new and damaging form of piracy. 

Mr. Chairman, thank you for holding the hearing, and I yield 

back my time. 

Mr. CONYERS. Thank you very much. Did any other Member 

want to bring greetings? I notice Magistrate Hank Johnson, Chairman of a Subcommittee himself has, indicated in the affirmative 

and the gentleman is recognized. 

Mr. JOHNSON. Thank you, Mr. Chairman, for holding this very 

important—thank you for holding this important hearing on a very 

important development in the annals of history of communication. 

Piracy comes in many forms and no content provider is immune. 

Today we will examine the impact that streaming piracy has on 

live sporting events and the unique challenges copyright owners 

face in enforcing their rights. Specifically, we will hear about how 

streams are distributed over the Internet and the confines of the 

Digital Millennium Copyright Act, which is intended to protect 

copyrighted works in the digital environment. 

The effects of piracy are widespread and felt across the Nation. 

Unfortunately, illegal streaming of sports events is on the rise and 

negatively impacts our economy. It also hurts consumers. When inVerDate Aug 31 2005 16:19 Jul 14, 2010 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6601 H:\WORK\FULL\121609\54075.000 HJUD1 PsN: 54075
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dividuals illegally stream sports events, companies lose revenue. 

Consequently companies pass down the cost to consumers who seek 

to lawfully view live sporting broadcasts on line. 

Furthermore, pirating sports events has a negative impact on the 

sport. If fewer funds are received by rights holders from the sale 

of the broadcasting rights, then fewer funds will be available to invest back into the sport. It is imperative that Congress act to send 

the message loud and clear that illegal streaming copyrighted content is unacceptable and will not be tolerated. 

I thank the Chairman for holding this hearing, and I look forward to hearing from our witnesses today, all of whom I thank for 

being here. And I yield back. 

Mr. CONYERS. Thank you, Chairman Johnson. We welcome our 

panelists, a very distinguished group of men and women, Professor 

Christopher Yoo, not to be confused with John Yoo, no relation. 

Mr. YOO. No relation, Mr. Chairman. 

Mr. CONYERS. Mr. Ed Durso. Mr. Michael Seibel, Mr. Lorenzo 

Fertitta, and of course Michael Mellis, who will start us off. 

I just want to say this about him, I rarely stay up later than my 

bedtime to read law review articles, but yours, which exceeded 100 

pages, was very fascinating, and I want to compliment you for it. 

As Senior Vice President, General Counsel of Major League 

Baseball Advanced Media, an interactive company of Major League 

Baseball founded in 2006, the Coalition Against on Line Video Piracy. Prior to that he was Deputy General Counsel for News Media 

at Mayor League Baseball. He clerked for a Federal court judge 

and, without diminishing any of his reputation, he graduated with 

honors from Harvard Law School. 

And so we include all of your statements in the record, and we 

welcome you, Mr. Mellis, to these proceedings. 

TESTIMONY OF MICHAEL J. MELLIS, SENIOR VICE PRESIDENT 

AND GENERAL COUNSEL, MLB ADVANCED MEDIA, L.P. 

Mr. MELLIS. Thank you very much, Mr. Chairman. I very much 

appreciate the kind words. 

Chairman Conyers—— 

Mr. CONYERS. You have to turn the mike on. 

Mr. MELLIS. Chairman Conyers—oh, first, thank you very much, 

Mr. Chairman. I appreciate the kind words that you just said. 

Good morning, everyone, Chairman Conyers, Ranking Member 

Smith and distinguished Members of the Committee. On behalf of 

Major League Baseball I would like to thank you for the privilege 

of addressing you this morning. My name is Mike Mellis and I am 

Senior Vice President and General Counsel of MLB Advanced 

Media, which is MLB’s Internet and interactive media company. 

Under the leadership of Commissioner Allan H. Selig, MLB has 

developed highly successful, diverse and innovative sports media 

businesses. On television our game telecasts are distributed nationally through DirecTV, ESPN, FOX, inDemand, the MLB network, 

TBS, and Verizon; locally through broadcast television stations and 

regional sports networks; and internationally, to over 200 countries 

and territories and the U.S. Armed Forces overseas. 

On the Internet MLB has been a pioneer in distributing live 

sports. MLB’s first live game webcast occurred in 2002, an innovaVerDate Aug 31 2005 16:19 Jul 14, 2010 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6601 H:\WORK\FULL\121609\54075.000 HJUD1 PsN: 54075
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tion to better serve our fans in the pioneering tradition of the first 

radio broadcast of one of our games in 1921 and the first television 

broadcast of one in 1939. 

Today MLB.TV is the world’s most successful and comprehensive 

and live video service on the Internet, distributing thousands of 

games live each season to a global audience of baseball fans using 

personal computers and iPhones. 

Clearly then rights owners like MLB can be adversely impacted 

by telecast piracy. And right now there is an emerging type: 

Unauthorised streaming over the Internet of live television programming of all types, including live sports telecasts and related 

programming. 

The number of sites and services involved in this phenomenon is 

significant and has grown rapidly. They are believed to be located 

in many nations, including the People’s Republic of China and the 

United States. Many are open doors, permitting any type of television programming to be streamed live, persistently and globally 

without authorization from copyright owners. 

This poses a threat to the global televised media sector. Although 

there is much that remains unknown about this problem, particularly with respect to its offshore aspects, it is clear that on an annual basis tens of thousands of hours of live television programming from networks around the world are being pirated. Included 

is significant piracy of live sports. 

In our rights enforcement efforts throughout the past several 

years, during which we have catalogued thousands of piracy incidents, the dominant pattern we have seen is piracy occurring 

through streaming over peer-to-peer services based China. Late 

last year we observed a newer pattern involving livestreaming user 

generated content sites, sometimes called lifecasting sites, most of 

which are located in the United States. 

We have also seen that when operators of sites and services decide to take affirmative steps to prevent or block unauthorized 

streaming the piracy can be substantially mitigated. 

Our copyright law is clear, this piracy is copyright infringement. 

However, domestic copyright infringement—excuse me, domestic 

copyright litigation is a remedial tool available only in limited circumstances. This is because the piracy is global, often involving 

sites and services that operate entirely offshore, outside the effective reach of our courts. Approximately 75 percent of the pirated 

retransmissions of our game telecasts have occurred through offshore sites and services, and approximately 50 percent of the total 

through Chinese sites and services. Under these circumstances the 

remedial steps available to the private sector are limited. 

We therefore believe that international cooperation about this 

problem must be improved. Most nations are both exporters and 

importers of television programming. So we see common ground, 

both in terms of shared economic interest and legal obligations for 

the U.S. and its trading partners to work cooperatively to curtail 

this problem. 

We therefore recommend that Congress and the Administration 

give this matter priority in our Nation’s ongoing efforts to improve 

intellectual property rights protection and enforcement on a worldwide basis. 

5 

In conclusion, this emerging breed of piracy is international in 

scope and has demonstrated growth characteristics. The threat it 

poses to the U.S. televised media sector must be taken seriously. 

We believe it is prudent to move proactively against this threat 

now, and we commend this Committee for shining a spotlight on 

it today through this hearing. 

As we develop more experience in this area, we look forward to 

the opportunity to make additional recommendations to you. 

Once again, thank you very much for your interest in the matter 

and for the privilege of addressing you this morning. 

[The prepared statement of Mr. Mellis follows:] 

6 

PREPARED STATEMENT OF MICHAEL J. MELLIS


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Mr. CONYERS. Thanks, Mr. Mellis. 

Ultimate Fighting Championship has been the main activity of 

Mr. Lorenzo Fertitta, our next witness. He has also been a casino 

executive, a sports promoter, and he has got degrees from San 

Diego University and the Stern School of Business at NYU. 

Welcome to our hearing, sir. 


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TESTIMONY OF LORENZO J. FERTITTA, CHIEF EXECUTIVE 

OFFICER, ULTIMATE FIGHTING CHAMPIONSHIP 

Mr. FERTITTA. Thank you, Mr. Chairman. Thank you, Chairman 

Conyers. Thank you, Ranking Member Smith, and distinguished 

Members of the Committee. I would like to thank you for inviting 

me to appear today to discuss the on-line streaming of stolen copyrighted works, including pirated live sporting events. It is a true 

honor for me to be here, and I am pleased to explain how unlawful 

live streaming of our Pay Per View events adversely impacts our 

business. 

The piracy of live sporting events is illegal, it kills jobs and 

threatens the expansion of U.S.-based companies. 

In 2001, my brother and I along with our friend Dana White, 

purchased the nearly bankrupt UFC. We saw great potential in the 

UFC when many thought we were crazy. We took a great risk, but 

today the UFC is a phenomenal success, creating and impacting 

thousands of jobs for our athletes, licensees, partners, and affiliates. That success is threatened by the theft in retransmission of 

our live Pay Per View events, which account for nearly half of our 

revenues. 

Our copyright protected works are critical to our survival, yet 

they are infringing—yet there are infringing web sites where you 

will find almost any type of content which is all likely pirated. 

These include live UFC events, NFL, NBA and MLB games, they 

Olympics and virtually every TV show and movie. 

If copyrighted works are allowed to be pirated with impunity, the 

potential effects on U.S. producers of entertainment programming, 

including the thousands of jobs that they create, will be disastrous. 

The UFC is potentially losing tens of millions of dollars a year 

from piracy. Here is how the theft occurs. With a simple adapter 

purchased from any retail electronic store like the one I hold in my 

hand, someone with access to one of our live events reproduces the 

program and retransmits it over the Internet with the aid of these 

new web sites. The site then allows any user to view the programming without authorization or payment. These unauthorized viewers watch the live event just like those who lawfully purchased the 

content through Pay Per View. 

Just last month the broadcast of UFC 106 had over 271 unauthorized streams with over 140,000 views, and those were just the 

streams that our piracy team was able to locate. 

We do our best at considerable expense to have our copyrighted 

content removed from these web sites. We have a team of in-house 

technicians scanning the web sites and chatrooms to find our pirated content. We also have hired several private vendors to assist us 

in this effort. 

However, even if our—even after our request the streaming web 

site takes down our pirated content, it is often too late because the 

value of our content is extremely perishable. A match can be over 

in seconds. So even if the web site takes the infringed content down 

within 15 minutes, the damage is done. 

I would like to emphasize that as a business entrepreneur I applaud the development of technologies that help consumers access 

entertainment in more robust and creative ways. Indeed, the UFC 

constantly employs new technologies to provide our fans with the 

13 

content they love and the format they desire, and we in no way 

want to discourage the development and use of legitimate methods 

of distribution. However, the use of technology to circumvent intellectual property laws and aid the piracy of content is something 

that we cannot and should not tolerate. 

Based on our observation, many of these new websites are making fortunes by aiding in the theft of our content and making it 

available through their web sites. While these sites purport to be 

a from for users who share their own original user generated video 

content, they cannot deny that watching a live Pee Wee football 

game will not generate much, if any, viewer interest. Certainly it 

would not drive enough traffic to rate a viable business based on 

an advertising revenue model. The truth is that most of the content 

that is generating any real traffic consists of infringing streams of 

copyrighted works. 

To make matters, worse the web sites often actively promote or 

induce infringement by instructing users on how to upload live content from their television computer or other device. I submit that 

they have deliberately chosen not to take reasonable precautions to 

deter rampant infringement on their sites because they profit from 

the availability of infringing streams on those sites. 

As the Committee examines this important issue we believe that 

there are steps that could be taken to help alleviate these problems. web site operators are in the best position to stop the retransmission of stolen live streaming content. For example, they 

should not permit streaming content unless they receive confirmation that the person uploading the stream is authorized to do so. 

They should take steps to disable instantly the ability from pirates 

from uploading content, including blocking any uploads from their 

IP addresses. They should also institute strict limits on the number 

of viewers that can see a particular stream. 

These sites should preserve identifying information about their 

users, and they should require such information as a condition of 

providing users access to their streaming technology web sites. 

Finally, they should incorporate the latest technologies, perhaps 

electronic fingerprinting, to prevent the piracy that they are currently aiding. 

Mr. Chairman, we are at a critical moment in the evolution of 

digital content delivery. It is critical that our courts and our policymakers send an unambiguous signal that users and companies who 

engage in these activities should not be allowed to operate beyond 

the reach of the law and to examine our laws to see if any updates 

may be needed. If the rampant piracy via these new sites is allowed to continue, it threatens the financial viability of the UFC 

and many other businesses that rely upon these live broadcasts. 

I want to thank the Committee again for giving me the opportunity to testify today. We at the UFC would be pleased to assist 

the Committee in any way and answer any questions. Thank you. 

[The prepared statement of Mr. Fertitta follows:] 

14 

PREPARED STATEMENT OF LORENZO J. FERTITTA


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Mr. CONYERS. Thanks, Mr. Fertitta. 

Our next witness is Michael Seibel, an amazing young man, cofounder and CEO of the web site Justin.tv, which has been the 

largest live video site on the Web with more than 30 million visitors each month. And before that he was campaign director for our 

former colleague Kweisi Mfume, and we recognize his talent because he is a political science graduate of Yale University. 

Welcome to the hearing. 

TESTIMONY OF MICHAEL SEIBEL, 

CHIEF EXECUTIVE OFFICER, JUSTIN.TV INC. 

Mr. SEIBEL. Chairman Conyers and Ranking Member Smith and 

Members of the Committee—— 

Mr. CONYERS. Push the button. 

Mr. SEIBEL. Thank you for allowing me to testify today. 

Justin.tv is a privately owned technology start-up, formed in 

2006, and based in San Francisco, with 32 employees. We have 

raised capital from some of the investors and engineers behind 

TiVO, Google, Twitter, Skype, Hotmail, and many other wellknown technology companies. We provide a platform that empowers people to create and share live video online. Our site is the 

modern equivalent of the town square, but instead of standing on 

a soap box to be heard a user can broadcast his or her message to 

the world. 

Our vision is to make live video part of the every day Internet 

experience in the same way that other companies have brought online images, news and video clips into the mainstream. In a time 

of traditional media consolidation, Justin.tv is providing an important alternative platform for the distribution of live video content. 

In addition to providing everyday people with access to large audience, we have worked with a wide variety of content owners, advertisers, and entertainers to help them increase awareness of 

their content and services. In 2009 alone Comcast and G4tv utilized Justin.tv for live coverage of E3, the largest video game conference in America. MicroSoft produced a 10 episode live show on 

the site, attracting over 2 million potential new customers. And the 

Jonas Brothers broadcast live on Justin.tv promoting their Disney 

movie, which went on to gross almost $40 million worldwide. 

We aim to meet the needs of everyone, from individuals to large 

corporations. Because we provide thousands of channels of content 

24 hours a day, 7 days a week, it is impossible for Justin.tv to 

manually monitor its user broadcasts. The DMCA recognizes this 

impossibility, providing online service providers like Justin.tv with 

a safe harbor from copyright infringement liability. We comply with 

the DMCA by, among other things, responding to take down notices and terminating the accounts of repeat infringers expeditiously. 

Like Justin.tv, all four major sports leagues host user generated 

content on their web sites and rely upon the DMCA to protect 

themselves from liability for the content uploaded by their users. 

We work with copyright holders to go above and beyond the DMCA 

in our effort to ensure that unauthorized content does not appear 

on the site. 

26 

One example of this effort is our copyright protection system, an 

online tool that enables copyright owners to instantly remove their 

content from the site. Another is our recent partnership with 

Vobile to implement live filtering through which a copyright owner’s content is compared to content streaming on Justin.tv in real 

time and when there is a match the infringing content is removed. 

This system was deployed on November 15th and immediately 

began removing FOX’s static content from the site. 

On Sunday we tested the system with NBC and the NFL for 

their Sunday night football game. The live filter was successful in 

removing the majority of infringing channels automatically. At this 

point the path to full full deployment is clear. 

Among the hundreds of organization that take advantage of one 

or more of the solutions referenced above are the NFL, the NBA, 

the MLB, UFC, ESPN, NBC, FOX, CBS, ABC and Comcast. Our 

providing solutions that go above and beyond the requirements of 

the DMCA has not yet become standard in the live video industry. 

We believe strongly in the value of providing copyright owners with 

the resources to protect their rights, having invested time and 

money into developing such resources. We are sensitive to the concerns of the professional sports industry and have entered memoranda of understanding with FOX and a major American sports 

league that clearly lays out how we can work together to combat 

these issues. We are actively negotiating similar agreements with 

NFL, MLB, NBC and Sony, with the goal of finalizing those agreements before the new year. 

Our goal is to democratize the power of live video, and the misuse of our technologies slows our progress toward that goal. We 

trust that this Committee and Congress will recognize and protect 

the legitimate interest of technology companies that provide citizens with the tools to share their voices with the world while also 

considering the concerns of copyright owners. 

We are available to assist the Committee as it explores these 

issues and are happy to answer your questions. 

[The prepared statement of Mr. Seibel follows:] 

27 

PREPARED STATEMENT OF MICHAEL SEIBEL


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Mr. CONYERS. Thank you, Mr Seibel. 

Ed Durso heads ESPN and developed the magazine as well. Previously he served in a number of leadership roles in the office of 

the Commissioner of Major League Baseball, and he is a graduate 


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with honors of Harvard University, I note duly. Glad to have you 

here. 

TESTIMONY OF ED DURSO, EXECUTIVE VICE PRESIDENT, 

ADMINISTRATION, ESPN, INC. 

Mr. DURSO. Thank you, Mr. Chairman. Mr. Chairman, Ranking 

Member Smith, other Members of Committee, I would like to begin 

by commending you for holding this hearing and in particular for 

your focus on emerging forms of Internet piracy. 

In today’s economy we cannot afford to let the threat of U.S. intellectual property undermine the vitality of what should be among 

our most promising, creative and economic assets. Each year ESPN 

invests billions of dollars to produce tens and thousands of hours 

of high quality sports programming for distribution by television 

and a growing array of new media platforms. 

We are here today because sports is not immune from piracy. We 

see this on an increasing number of Internet sites that are the 

focus of today’s hearing. These sites enable the real-time theft of 

live sports programming uploaded either directly by the site operators or by the users of these sites. 

In the interest of time, let me highlight just a few points from 

my written testimony. First, it is important to recognize that this 

is not a problem limited to live sports or even sports in general. 

These same sites also make available real-time streaming of many 

other types of television and new media programs. This is an issue 

that effects the entire global media sector. 

Second, this problem even though it is fairly nascent and heavily 

international in scope and impact, in many cases these streaming 

sites set up overseas, particularly in Asia, where these sites can 

take advantage of massive broadband capacity, legal uncertainty, 

and in many instances lax enforcement. 

Third to give you a sense of ESPN’s experience with this, we regularly see ESPN’s linear cable networks, including ESPN, ESPN2, 

and ESPN Deportes made available for streaming in real-time 

without authorization. 

In addition, the programming we make available through our 

new media offerings is also regularly retransmitted on these sites. 

ESPN has been a pioneer in expanding legitimate access to live 

sporting events through broadband services. ESPN360.com is ours 

signature broadband sports network, providing access to more than 

3,500 live domestic and international sporting events each year. 

Through our investment in technology and this programming 

these events are now available via ESPN360.com to over 50 million 

households and through 110 affiliated and Internet service providers. We also provide this programming to U.S. college students 

and all U.S. based military personnel via campus and military 

broadband networks. 

These efforts have yielded tremendous benefits for consumers. 

Many of the households served by ESPN360.com would not have legitimate access to these events but for our investment. Yet many 

of these same events appear routinely without authorization on 

Internet streaming sites. It is not hard to see how the widespread 

unauthorized and uncompensated availability of the content that 

we pay to produce and distribute would undermine our incentive 

36 

to invest in and provide this high quality content, whether through 

innovative broadband offerings or through more traditional linear 

networks. 

Fourth and finally, while the challenges we see here are new and 

the process of devising solutions is still ongoing, we can learn 

something from what we experienced when user-generated content 

sites first came online. There, like here, we saw new media online 

distribution platforms with interesting possibilities to promote legitimate user generated activities, but we also saw those possibilities come completely overrun by piracy. 

As described in my written testimony, ESPN’s parent, the Walt 

Disney Company, was one of several that led the way to develop 

a set of principles for user-generated content services. Under these 

principles participating services and content providers agreed on a 

set of objectives that included the elimination of infringement on 

UGC services and the encouragement of uploads of wholly original 

and authorized user-generated content. 

While we consider whether the measures embodied in these principles would be effective or sufficient to address piracy on live 

streaming sites, as a starting point those sites that claim their 

commitment to promoting legitimate user driven environment 

should embrace the objective of eliminating infringement on their 

sites. As has been done by the leading UGC sites, that objective 

should proceed by implementing those mechanisms that are reasonable and effective to that end. 

That commitment is important not only to protect the rights of 

creators and legitimate distributors of creative content, but is also 

key to driving the development of a robust, trusted, and content 

rich legitimate streaming environment. 

Mr. Chairman, I want to thank you again for your attention to 

this important issues and for the opportunity to appear before you. 

I look forward to your questions. 

[The prepared statement of Mr. Durso follows:] 

37 

PREPARED STATEMENT OF ED DURSO


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Mr. CONYERS. Thank you, sir. We now conclude with Christopher 

Yoo, University of Pennsylvania Professor of Law. Numbers of 

books and articles have flowed from his pen. He has clerked for 

Justice Anthony Kennedy and Appellate Judge Arthur Raymond 

Randolph and started Vanderbilt University Law School, and as 

usual he is a Harvard University law graduate. 


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We welcome you today, sir. 

TESTIMONY OF CHRISTOPHER S. YOO, PROFESSOR OF LAW 

AND COMMUNICATION, UNIVERSITY OF PENNSYLVANIA LAW 

SCHOOL 

Mr. YOO. Thank you, Chairman Conyers, Ranking Member 

Smith, Members of the Committee. I am grateful for the opportunity to testify today on the subject of piracy of live sports broadcasting. To date, most of the attention has been focused on unauthorized copying of prerecorded television. Today’s hearing provides 

welcome attention on the unique problems and challenges posed by 

piracy of live television. 

A wide range of companies offer devices that take advantage of 

what is known as the analog hole to enable end users to copy high 

definition television programming directly to personal computers. 

These devices typically connect to the component video ports on 

cable and television set top boxes, which are the trio of red, green 

and blue jacks that appear on the back of a wide range of devices. 

Because these ports convey data in an analog format, they lack the 

more sophisticated copy protection built into ports employing digital formats. 

Once live television programming has been captured and stored 

on a computer, the person wishing to share the unauthorized copy 

must find a way to distribute it. One means of doing so is streaming video, in which the copier establishes an Internet connection 

with interested viewers and delivers the programming through a 

continuous flow of data. 

Those making unauthorized copies of live television programming 

have increasingly used peer-to-peer systems to distribute them. In 

a peer-to-peer system, the content is saved in a file that is sent to 

and stored by multiple end users throughout the network. Those 

wishing to view the program then can connect to any of the locations where the file has been saved. 

Because peer-to-peer systems require that programs be recorded, 

then stored, then accessed, they have historically imposed delays 

that would render them unsuitable for distributing live television 

programming. More recently, peer-to-peer systems have begun saving live programming in short segments of approximately 10 seconds. This has enabled those making unauthorized copies to distribute the content without having to wait until the end of the program. It has also enabled viewers to view these programs on a near 

live basis, simply by accessing a series of small files instead of one 

large one. 

Preventing the dissemination of unauthorized copies of video content poses more difficult challenges for live television than for 

prerecorded television. One of the most effective means of deterring 

piracy is fingerprinting, which takes advantage of the fact that 

every segment of a television program exhibits a characteristic pattern. If these patterns are stored in a database, web site owners 

and network providers can analyze the programs they carry to determine whether they consist of copyrighted content. The problem 

is that ascertaining and disseminating these fingerprints require a 

certain amount of time. The delay inherent in fingerprint-based soVerDate Aug 31 2005 16:19 Jul 14, 2010 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6601 H:\WORK\FULL\121609\54075.000 HJUD1 PsN: 54075
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lutions limits their effectiveness when live video programming is 

involved. 

Moreover, those seeking to distribute pirated video content are 

employing a variety of strategies to evade detection, which has in 

turn prompted content owners to respond with a number of counter 

strategies. The result is an endless cat and mouse game in which 

both sides spend significant resources in an attempt to stay one 

jump ahead of the other. 

Technical measures to prevent piracy can be supplemented and 

reinforced with legal measures. The distributed nature of the Internet makes it difficult and costly to target private individuals, the 

ones who are actually making the copies. Consequently, legal responses generally focus on commercial actors that facilitate illegal 

piracy, such as those firms that manufacture the devices that make 

the actual copies and the web sites that host unauthorized copies 

or provide information about where to find such content. 

For example, manufacturers of devices that evade copy protection 

may be subject to liability under the Digital Millennium Copyright 

Act. In addition, web sites that serve as focal points for information 

about where to find unauthorized copies may be subject to vicarious liability or copyright infringement for their role in facilitating 

piracy. 

Recently, France and the U.K. have adopted three strikes policies 

that mandate that network providers cut off subscribers who repeatedly violate the copyright laws. 

Lastly, declines in the costs of filtering technologies have led 

some jurisdictions to consider requiring web sites and network providers to filter the content they carry to determine whether it infringes the copyright law. 

The problem of piracy of live sports programming is complicated 

by the fact that any solution will inevitably involve a wide variety 

of stakeholders, including content owners, device manufacturers, 

network providers, web sites, and software firms. The problem is 

that those who would benefit from implementing solutions to curb 

piracy are often different from those who would bear the cost. 

The multi-faceted nature of the problem makes it hard for the industry to find common ground. If so, Congress may be able to play 

a constructive role in helping to craft a solution. This hearing represents an important first step in addressing the significant problems posed by the piracy of live sports broadcasting. 

I appreciate the opportunity to assist the Committee in its exploration of these issues and will be happy to answer any questions 

you may have. 

[The prepared statement of Mr. Yoo follows:] 

44 

PREPARED STATEMENT OF CHRISTOPHER S. YOO


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Mr. CONYERS. Thank you, Professor. We welcome Adam Schiff, 

Howard Coble, Maxine Waters, and Bill Delahunt, who came 

through but he didn’t stay. He will come back out. 

Now, I thank all of you. The two questions that occur, what are 

some possible legal remedies and how good are these techniques 


Yoo-7.eps
51 

that we’ve heard from both Seibel and you about fingerprinting and 

cutting off offending repeat subscribers as they do in Britain and 

France? But nobody suggested any legal remedies and that is why 

we may have to hold other hearings. And so I am just jumping to— 

I am fast forwarding to what we are going to do after this great 

hearing today. Everybody is alerted, and they know a little something about it. But where do we go from here? Mr. Mellis? 

Mr. MELLIS. Well, Chairman Conyers, you have asked the most 

important question right off the bat. We don’t believe there is a silver bullet to stop this problem. We would agree with professor Yoo 

that it is a very complicated one. We do believe that international 

cooperation needs to be improved, that practices and standards in 

other countries where we have seen the weight of the gravity of the 

problem occurring needs to be brought up to ours. 

We know this piracy in the United States is copyright infringement, but in other countries, particularly in China, where for reasons Mr. Durso explained, the situation is unclear and enforcement 

is lax. So one essential part of an enduring solution is we think 

going to need to include improved cooperation with our trading 

partners and otherwise. 

And of course the government and the agencies in the United 

States Government are involved in intellectual property rights protection and enforcement internationally in many ways. I think it 

would be important to prioritize this issue among all of the important and hard work that they are doing. 

And then second I would say, if we can bring the U.S. sites and 

services up to best practices, then we have a model that we can 

show, let’s say, the Chinese Government or other governments and 

say, this is how it can work, this is how on the one hand these sites 

and services can do the legitimate things that they offer and at the 

same time protect copyrighted works. 

Mr. CONYERS. Well, thank you very much. After watching our 

President, global solutions seem pretty hard to come by these days. 

But does the U.N. have a role in this? I mean we have very creative lawyers in back of me here that have all these kinds of ideas. 

Mr. MELLIS. Well, I think there is a role in the realm of international copyright and related treaties in general, and there are a 

number of them that establish minimum standards in foreign countries and national treatment, and the World Intellectual Property 

Organization of the United Nations is an important player in all 

of that. And so that is an area that I agree should be pursued, but 

it will need also the follow-through of having our signatories to 

those treaties, and the treaties are already clear in our view that 

this type of piracy is—it violates them, that they need to enforce 

their legal obligations. 

Mr. CONYERS. Wait until Ambassador Susan Rice hears about 

this at the U.N. 

Mr. Fertitta. 

Mr. FERTITTA. Yes, Mr. Chairman. 

Mr. CONYERS. What do you think? 

Mr. FERTITTA. I think that—you know, I look at this, I am not 

an expert in technology, I am not an expert in law, I am an entrepreneur that started a business that—that bought a business that 

was nearly bankrupt, invested a tremendous amount of money and 

52 

have grown—has grown it into what is now an international media 

company where we distribute our product to over 170 countries 

around the globe and to over 4 to 500 million homes worldwide. 

Mr. CONYERS. Well, I am part of you, but that is not why we 

brought you here today. 

Mr. FERTITTA. I understand. What I am looking at from our perspective is that the current—I know that the DMCA was put in 

place, but I am not sure that that contemplated live streaming 

events. Certainly with somebody puts up a song that is created and 

there is this issue of notice and take down and what is the amount 

of time that it should take to take that down, the amount of damage if it is within 24 or 48 hours is significantly different than it 

is to one of our events which is a live Pay Per View, and the value 

of our product goes down significantly. It is very perishable every 

minute that goes by. 

Mr. CONYERS. Okay. What did you want to add to your contribution, Mr Seibel? You first brought up fingerprinting. 

Mr. SEIBEL. Yes, I don’t think I am qualified to discuss the international remedies for these solutions. 

Mr. JOHNSON. Is your mike on? 

Mr. CONYERS. Turn your mike on. 

Mr. SEIBEL. There we go. We are all good. I don’t believe I am 

qualified to discuss the international solutions or the legal solution. 

I do agree with Mr. Mellis that we are very interested in creating 

a standard in the United States for how sites that allow individuals 

to create and share live video can also work with copyright holders 

to protect their rights. And so we believe that through our copyright protection system and also through the new filtering, live filtering system that we have been able to build with Vobile, those 

are two affirmative steps that we believe can certainly address this 

concern in the United States. 

In terms of internationally or legal based solutions, unfortunately I don’t have much to contribute on that front. 

Mr. CONYERS. Have you ever considered law school? No, you 

have been very helpful. You have introduced the whole topic of 

fingerprinting. 

Mr. Durso. 

Mr. DURSO. Yes, Mr. Chairman, thank you. I do want to echo a 

bit of what has been said before and point out we are entrepreneurs also and we really need perhaps the power of persuasion 

and pressure of this Committee and like Committees to keep the 

pressure on individuals like Mr Seibel, to my right, to kind of do 

the right thing here. If you just look on what is happening there, 

you can’t traverse down their index page and see stream after 

stream after stream of professionally produced, high quality ESPN 

and other products and not say there is something wrong here and 

it ought to be addressed. 

We are doing what we can, but Professor Yoo aptly described 

how difficult a process that is. And a real world example, you know 

we made a decision 8 years ago to launch I said our broadband 

service, ESPN360.com. It is a tremendous service, a great application to support the growth and development of broadband. Today 

it has 3,500 events on it a year, it is a terrific product. We had a 

business model in which the ISP paid us a fee, they distributed it 

53 

and today it is, as I said more, in more than 50 million homes and 

providing a lot more product to a lot more people. 

Now if it were today and I were contemplating launching that 

service, I might look around and say this is crazy, this is not in 

environment in which this can take hold. We started 7 years ago 

and invested tens of millions of dollars to try and produce something at a time when the service like Justin.tv wasn’t even thought 

about by anybody. But today it exists, and it is neatly packaged, 

well produced, and it provides certainly a significant part of the 

now landscape of what people like us want to do in terms of deciding to invest. 

Mr. CONYERS. Tell me how ESPN that you mentioned operates 

and is unique from other web sites and why you chose not to offer 

it as a subscription product to broadband connected consumers. 

Mr. DURSO. Certainly. We have addressed any new platform distribution opportunity that has come along in our 30 years of existence. We are platform agnostic and we look to try and figure out 

ways to put the ESPN brand and ESPN product in any stream of 

commerce where we think there can be a return. Broadband is no 

different. So we have looked at that in a number of different ways. 

ESPN360.com is one such application, as I said. 

We think it works very well in the broadband environment. We 

decided that among a number of approaches we would approach 

Internet service providers directly and say if we can produce a 

product with the ESPN brand on it, would that be helpful to you 

in terms of your selling your product out to the consumers. The answer we got was yes. So we were happy to participate in both the 

development of new businesses on their part and at the same time 

the enhanced distribution of broadband throughout our country. 

Now an analogy might be back in the early 90’s, ESPN was 

among the very first to embrace and distribute a significant quantity of HD programming at a time when HD programming was 

very nascent. We think we did a lot to support the growth of HD 

and to support ultimately the whole digital transition as HD led up 

to that. 

So that is a similar circumstance here. We look to build successful products that can work in an environment. We are making investments and we are working with our distributors to provide 

something to them that we think benefits consumers. The fact it 

is available to 50 million homes today, 70 percent of the broadband 

universe, we think is a significant indicator that that has been a 

successful effort. 

Mr. CONYERS. So you didn’t think it was an economically wise investment? 

Mr. DURSO. No, we looked at the development—— 

Mr. CONYERS. Why you didn’t offer it as a subscription product, 

you didn’t think it was viable? 

Mr. DURSO. We saw an opportunity, Mr. Chairman, to get on 

board a train we thought was leaving and would do very well, 

which was called broadband. That was not the business we are in, 

we are not a broadband—we are not a platform, we are a content 

company. We said how can we participate in this in a meaningful 

way to offer something to broadband distributors that would help 

their business. 

54 

We have other products available in our areas, so we are not just 

putting all of our eggs in this one basket. ESPN.com is available 

on the open Internet, it has a tremendous amount of free product 

on it in terms of video and clips. We offer a product there, for example, called the ESPN Insider, which is a subscription-based adjunct to ESPN.com and, along with the Walt Disney Company, are 

participating in a number of different approaches here, Mr. Chairman. We thought this was a good opportunity and sort of the proof 

is in the pudding; it seems to work well. 

Mr. CONYERS. Okay. Professor, you have already made a couple 

of good suggestions. What about the legal basis? These are technical. How do we sue these guys? 

Mr. YOO. I have a number of—— 

Mr. CONYERS. How do we prosecute these guys? Everybody 

agrees what we are complaining about is illegal, right? So there 

ought to be a law. What is it you think we do here? 

Mr. YOO. I have some concrete suggestions of ways the laws 

might be changed and what that—changes in the law that might 

contribute to curbing illegal piracy. 

The Digital Millennium Copyright Act was really envisioned—envisioned content owners sending a web site address to a web site 

and forcing them to take it down and that has created part of the 

cat and mouse game. What they do is take it down and it will immediately get re-posted. Fingerprinting we can change the notion 

of what notice and takedown means. One example might be you 

give the web site a fingerprint instead of a specific web site address 

and ask them to screen for everything that contains a fingerprint, 

and that represents a notice. 

A more basic problem is the DMCA operates after the fact, after 

the content has been posted and the request to be taken down. The 

DMCA notice requirement could be changed particularly for live 

programming where you know at what time it would be broadcast. 

Give them advance notice of when this programming will be provided, and ask them to take appropriate measures in the absence 

of a specific Web address by broadening our notion of what notice 

means. Not just a Web address, but a general notice about when 

live content is likely to come out, and make that a basis for potential liability for anyone facilitating that content under the DMCA. 

Another ambiguity is contributory infringement, which is addressed by the Supreme Court in the Grokster case really instead 

of addressing substantial questions about how substantial does the 

infringement have to be before it triggers contributory infringement, the Supreme Court left that issue unresolved. And the 

Grokster case decided it on different grounds. Interestingly the two 

concurrences split right down the middle about how substantial the 

noninfringing uses has to be before it constitutes contributory infringement. The perfect area where there is an ambiguity in the 

law where Congress can step in and provide much needed clarity 

about ways—in ways that would make it easier to curb the kind 

of piracy we are talking about here today. 

Lastly, as Mr. Durso pointed out, industry got together for use 

generated content and found solutions for prerecorded content in 

ways that didn’t involve so much direct legal enforcement and suggested a different role that Congress might play, which is holding 

55 

hearings like the one we are having today to encourage players to 

come to the table to find common ground. Because everyone has to 

recognize nobody wins unless the content is provided in ways that 

are protected in ways that people can generate revenue. Everyone 

has to—that has to be aligned. No one can make money unless the 

programs are provided and provided in a way that generate revenue for people who are willing to pay for it, and I think hearings 

like the one we are having today can be an important part of that 

process. 

Mr. CONYERS. I thank all of you. You have been very helpful in 

getting us started. Remember, this is only the first hearing. So we 

have got a ways to go. 

I am pleased to recognize Bob Goodlatte, a senior Member of this 

Committee, from Virginia. 

Mr. GOODLATTE. Mr. Chairman, thank you very much, and thank 

you for holding this hearing. This is the first hearing that has been 

held on the DMCA I think in quite some time. I can remember very 

well, going back I think more than 10 years ago when we wrote 

that legislation, I was asked by Chairman Hyde to sit in rooms 

with representatives of the content industry, the Internet service 

provider industry, the universities, and other users of Internet content and try to manage a negotiation of this notice and takedown 

issue, and we came up with something that we thought was very 

good at the time. In fact, it was well received by folks on every side 

of this issue, but it requires that ISPs expeditiously remove materials. And I suppose the meaning of the word ‘‘expeditiously’’ has 

got to change or the DMCA has got to change. And I don’t know 

how many people here agree with Professor Yoo that we may have 

to reopen the DMCA to enact some of the suggestions that he has 

made, which are certainly worthy suggestions. 

But I would like to ask Mr. Seibel, since his product is the focus. 

And, as I understand it, you are sort of like the YouTube of live 

streaming online, and I know that you have a lot of experience 

with this notice and takedown issue. What is the typical amount 

of time that an Internet service provider takes to remove infringing 

content once a notice of infringement is received? How fast is it 

possible to take down infringing materials once the notice is received? 

Mr. SEIBEL. Sir, Justin.tv’s system for implementing DMCA takedown, we refer to that as the copyright protection system, and essentially it transfers the typical takedown e-mail notice, which is 

usually in the form of a letter, into an online form. As a result our 

ability to remove content once we have been notified is extremely 

fast. Because we have been able to push this from the kind of letter 

and e-mail world into an online form, as soon as we are notified 

through the copyright protection system our system can then go 

about removing that content. 

Mr. Goodlatte. I would guess that Mr. Mellis and Mr. Fertitta 

and Mr. Durso would say that in the environment of live streaming, particularly where it is broken down into 10-second increments, if they are going to protect their copyrighted material, they 

have got to get a notice to somebody really fast and they have got 

to respond virtually immediately, which is very different than what 

I think we sat around and talked about 10 years ago. 

56 

Is that a feasible environment to operate in? I mean, can they— 

I guess they can see coming the fact that they are going to have 

these programs on the air and they can then be on the lookout, but 

I don’t know if they can be on the lookout for thousands of different 

people who might take the opportunity to stream and to use your 

service to stream. You may have the capability of very quickly taking them all down, but what has been your experience with this 

thus far? 

Mr. SEIBEL. So the reason why we have developed both the copyright protection system and the live filtering system is to address 

the specific issue that you bring up. Essentially, what we want to 

provide is both a system whereby people can look at the site, identify their content, and have it removed immediately, but also a system by which people can provide us with a fingerprint. And we will 

use our live fingerprinting partner to automatically search out and 

remove this content from the site. 

So in our efforts to work with copyright holders, we are really 

trying to encompass both issues, both how can we make sure that 

once contentis identified it is removed extremely quickly, and also 

how can we confront the issue of identifying the content in a more 

automated fashion. 

Mr. GOODLATTE. Now, there is another side of this issue, and 

that is the user of your service or other Internet sites or the people 

who may have a web site on which they are placing some material 

that may or may not be copyrighted, and I have received complaints from individuals who have complained that their content 

has been taken down inappropriately. 

Are you able to judge quickly enough and accurately enough that 

the content you are taking down is indeed copyright material that 

is entitled to the protection under the DMCA? 

Mr. SEIBEL. Well, our understanding is that once we receive a 

takedown notice, regardless of its validity, we are required to act 

upon that takedown notice. And, in addition, we are required to 

offer to the user whose contents have been taken down the ability 

to counter that takedown. In our experience, however, copyright 

owners have been extremely good on Justin.tv in identifying their 

content as opposed to—— 

Mr. GOODLATTE. Not a lot of mistakes, in other words? 

Mr. SEIBEL. Exactly. 

Mr. GOODLATTE. Well, in a recent submission to the New Zealand 

Government regarding a new copyright there, Google alleged that 

57 percent of the takedown notices it has received under the 

DMCA in the United States were sent by businesses targeting competitors, which certainly is a legitimate thing to do, but they also 

allege that 37 percent of the notices were not valid copyright 

claims. 

You have indicated that you have not experienced those kind of 

abuses, but I want to direct to some of the content owners, Mr. 

Durso, Mr. Fertitta, Mr. Mellis, if you want to join in, if these numbers are true, does the fact that 37 percent of the notices are in 

error alarm you, considering the fact that the content must be expeditiously removed and will not be available online for at least 10 

to 15 days after it is taken down? That is the complaint that we 

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net web sites that have been subject to a notice and takedown and 

then have a hard time getting back up. 

Any of you. Mr. Durso, do you want to respond to that? 

Mr. DURSO. I am not personally aware of a way I could validate 

any of those statistics relative to percentage of inappropriate or appropriate takedown notices. I can share with you that—and I think 

others in the panel have seen the frustration and difficulty of operating within the current system, especially in a live sports environment. 

Mr. GOODLATTE. It is very fast, isn’t it? 

Mr. DURSO. It is very quick. 

Mr. GOODLATTE. The decisions have to be made extraordinarily 

quick? 

Mr. DURSO. But it is also frustrating in this regard. I don’t think 

anybody who goes on Justin.tv or a similar service and looks 

through their index page where they can go click on whatever it 

is they wish to see will be at all confused about whether or not 

Sports Center, which I was watching this morning, is the Sports 

Center from ESPN. It is. And it is frustrating for us to have to sort 

of play the cat and mouse game of trying to take that down. And 

despite whatever technological advances may be on the horizon 

here, it has been a difficult—it is a difficult time for us in this respect. And what we are really looking for are companies like Justin.tv and others to really make a firm commitment to say this is 

wrong and we will work tirelessly to fix this for you. Because 

someoneis indexing those pages. Somebody is looking. And the notion that there is so much out there that we can’t figure out what 

is on, you know, sort of belies the notion that it is nicely arranged 

and available and subject mattered and indexed and available. 

Here is how we will help you find what you are looking for. 

Someonehas got to be doing that. 

Mr. GOODLATTE. Absolutely. And I agree. And that is certainly 

a major onus that Mr. Seibel and others in the same business face 

or there is going to be some kind of a major change in the law that 

will make this wonderful availability more difficult. 

Mr. Fertitta, Mr. Mellis, any comments? 

Mr. FERTITTA. Yes, I do. Thank you. Relative to what you were 

talking about with New Zealand, I don’t know if that was—— 

Mr. GOODLATTE. This was something they presented to New Zealand, but they were talking about the United States. 

Mr. FERTITTA. Right. And I guess the question would be was that 

archived or live content? 

Mr. GOODLATTE. I don’t know the answer to that. That is a very 

good question. 

Mr. FERTITTA. It is very difficult, as we mentioned before, because it is live streaming. And while a lot of these web sites say 

that they are doing things to try to prevent this, one of the things 

that bothers us is that right on their own web sites they provide 

exact detail on how to upload content from your television. And 

content coming from the television, my guess would be that 99 percent of it would be copyrighted material. So not only are they facilitating this; they are in some ways encouraging it. And that is part 

of the problem that we have, and that is why when our Pay Per 

View starts, you have 271 streams. 

58 

*The information referred to was not available at the time of the printing of this hearing 

record. 

Mr. GOODLATTE. Mr. Fertitta, would you put that document in 

the record, make it available to the Committee for that purpose? 

And I would ask unanimous consent that it be made part of the 

record.* 

Mr. CONYERS. Without objection. 

Mr. GOODLATTE. Mr. Chairman, if I might have forbearance to 

ask—I know my time has expired, but to ask Professor Yoo one 

more question. And that is, you have heard this question about notice and takedown. What can be done to make sure that content 

owners are doing their due diligence to make sure the claims they 

allege are valid? 

We have heard from you some other ideas which I think have 

merit in terms of making their ability to protect their content 

stronger and more immediate, which is effectively the environment 

they are operating in with this type. What can we do to make sure 

that people don’t use this in an abusive way? 

I can understand why a competitor would have many reasons to 

ask another competitor to take something down that may be copyrighted material, but they also might have an incentive to try to 

disrupt the availability of something on the Internet that they 

shouldn’t be asking to be taken down. They don’t seem to face any 

consequence for that right now. What can we do to change that? 

Mr. YOO. Clearly, the Congress could impose some consequences. 

They, unlike producers of—people who are pirating live content, 

large content providers are easy to identify, easy to find, they are 

easy to bring to this Committee and testify. So I would not want 

to put on content owners the burden of being perfectly correct all 

the time. 

On the other hand, what you are talking about is repeat offender 

status, abuse of processes on a repetitive basis. And I could see 

Congress enacting a law that if any content owner on a persistent 

basis pursued a course of action really designed to pull down content that they didn’t own, or try to use that in an anti-competitive 

manner, you could make that a basis for liability for the content 

owner under the DMCA. You could make them swear under penalty of perjury that in fact they hold a valid copyright in the content they are asking to be taken down. 

There are a number of steps this Congress could do to make 

that—to give that some more teeth, because any system is subject 

to abuse on any side. And what we are likely to see is this is a new 

area. It is unsurprising that after 10 years and something is changing as fast technologically as the Internet, that the Congress is 

having to consider revising the laws, and it should come as no surprise this will not be the last time this Committee will have to consider issues like this. 

Mr. GOODLATTE. Thank you. Thank you, Mr. Chairman. 

Mr. CONYERS. Maxine Waters, Chair of the Subcommittee on Financial Services, senior Member of the Judiciary Committee. 

Ms. WATERS. Thank you very much, Mr. Chairman. I have been 

listening with great interest since I entered the room. But I must 

share with you that my initial motivation for coming here was not 

59 

so much to learn about the piracy, but to find out whether or not 

I could have another way of looking at the NFL and its antitrust 

exemption. As you know, I am focused on some efforts that we all 

have been putting forth to deal with some of the problems of some 

of the older players of the NFL. But I must admit, since I have 

been here I have listened and I am curious now about some of what 

I am hearing. 

Let me address a question to Mr. Mellis. Could you show us exactly how people are stealing these live major league baseball 

broadcasts, Mr. Mellis? 

Mr. MELLIS. Congresswoman, I would be glad to try to explain 

that. This is one way that we think it is happening. There are 

probably other ways. The way that I am going to describe involves 

coaxial cable in your house, this would be incoming in from outside 

the house and this would be—excuse me. This would be from your 

set top box to your television set. What you would do is you would 

unscrew the end from your television set, and then you would 

screw this TV stick into that end here. And on the other end of this 

stick is a USB connector, universal serial bus, which can be inserted into the front part of your computer where there is a receiving connector for that, the same place that you would stick in a 

flash memory stick. And then with drivers that would come with 

this device—the one we bought cost $70—you can more or less manipulate your personal computer as if it were your television, and 

you could watch your TV programming, change channels on your 

computer. 

The next step is using a peer-to-peer service download, let’s say 

from one of the services in China that has plagued us, or through 

the instructions that a service like Justin provides, you can then 

take those signals which have already been converted and are 

being read by the TV—by the computer, through this device, and 

wrap them, upload them to the public Internet for worldwide viewing. 

Ms. WATERS. Mr. Mellis, the device that you just showed us that 

you could put on the cable and connect to your computer is a device 

that is legally sold in some retail outlet somewhere? 

Mr. MELLIS. Yes. I believe these devices are widely available. 

And it is not the only device that could be used to do this. There 

is a card that you could stick into the back of your personal computer which would receive the coaxial cable into the back and have 

this nub on it, and the technology of the card achieves the same 

function and the same purposes of it. 

Ms. WATERS. What other use would these devices have other 

than the piracy actions that you just described? 

Mr. MELLIS. I don’t know much about these devices except about 

how they are used with respect to the piracy of our game telecasts, 

unfortunately. 

Ms. WATERS. Where are they sold? 

Mr. MELLIS. They are widely available. This can be bought online 

at Amazon. We bought this one at a Staples store. 

Ms. WATERS. So you don’t know whether or not these devices 

could be used for a legitimate use? 

Mr. MELLIS. I think that they could be. What I mean to say is 

I am not familiar with how they are in fact used by people, but 

60 

they could be used to watch television programming on your personal computer. Then there is the next step where, by downloading 

the peer-to-peer service client from a Chinese service, let’s say, or 

following the instructions from a service like Justin, that you would 

then take that converted signal and—someone could—upload it to 

the public Internet for worldwide viewing. 

Ms. WATERS. I see. Well, Mr. Chairman, if I may, it sounds as 

if we have a complicated issue before us that must be given an 

awful lot of thought, and I know that you will lead this Committee 

in trying to make sure that we correct the problems with piracy. 

But as we do that, I am also wanting to keep you focused on the 

NFL and the fact that it has the power to negotiate with all of 

these entities and avoid the antitrust laws of this country and see 

if when we solve the piracy problem we can also take away that 

exemption. 

Mr. CONYERS. I want you to rest assured that Hank Johnson’s 

Committee is going to hold hearings, I think in January, on this 

antitrust exemption and the problem. Will that make you more 

comfortable? 

Ms. WATERS. As long as we stay focused on that antitrust exemption, I am happy. 

Mr. CONYERS. Okay. That is an easy assignment. Thank you very 

much, Maxine Waters. 

We turn now to Howard Coble, a distinguished senior Member 

of the Judiciary Committee from North Carolina, and invite him to 

question our witnesses. 

Mr. COBLE. Thank you, Mr. Chairman. And welcome to the panelists who appeared before us today. Gentlemen, I believe that 

streaming broadcasts is a global problem, and I think that robust 

and effective American copyright laws are essential to content owners who work to protect their works from being infringed by individuals and other countries, and I think probably we all concur 

with that. Do we not? I am glad to hear that. 

Mr. Durso, I was going to ask you about the decision not to offer 

as a subscription product to broadband connecting consumers, but 

I think you and the Chairman pretty well covered that. Let me ask 

you this, Mr. Durso. Some have criticized the ESPN360.com mode 

as having the potential to drive up broadband subscription prices. 

Is this criticism fairly leveled? 

Mr. DURSO. Well, thank you. I don’t believe that it is, Congressman. We have heard that complaint before. Two things to point out 

on that, if I may. 

One, we watch the marketplace pretty carefully to see the impact 

of our business in it and the retail world. We have not seen any 

instance that we can identify where there was any kind of direct 

correlation between our sale of this product and the wholesale marketplace and an impact on the retail pricing of the ISPs. That is 

their decision to make. We don’t have anything to say about that. 

Our only requirement is that if you do the deal with us, you must 

provide the service to everybody on your system. So we think that 

we are helping consumers in that regard. 

Secondly, we looked at it from an economic standpoint. We have 

got noted Washington, D.C. economist Jeb Heisenak to take a look 

at this issue to see how one would analyze it from an economic 

61 

*The information referred to was not available at the time of the printing of this hearing 

record. 

standpoint. He put together a very short paper, which I am happy 

to introduce in the record. His conclusion was this: 

It is very expensive to build a broadband platform, and the cost 

of getting that first subscriber is very high. But if you can make 

your service popular, as you add more and more people to the service the average cost of providing the service to each subscriber 

comes down. 

Mr. COBLE. I got you. 

Mr. DURSO. And in that circumstance, you are actually putting 

downward pressure on retail pricing. So I would be happy to submit that for your review.* 

Mr. COBLE. Thank you, sir. 

Professor Yoo, in your testimony you referred to several technologies that may be employed to prevent infringement through rebroadcasting. Which of these technologies, in your opinion, is the 

most realistic option for entities such as UFC or professional sports 

leagues? 

Mr. YOO. When you see how piracy and other security problems 

have been addressed on the Internet in other contexts, it is very 

rare to see there be one single strategy that is the solution to everything. You generally see a layer of strategies. In this case, you 

can see the use of fingerprinting to screen out content in advance. 

Perhaps asking the content provider, instead of sending it out on 

a live basis, do it on a near live basis delayed by a few seconds to 

allow that technology to work. You may see some form of, in addition to automated screening, some sort of manual screening obligation on the part of the web sites. And you may see after the fact, 

old-fashioned lawsuits, which cannot prevent it up front but it will 

have a role in deterring repeat offenses and identifying those people and giving them some deterrence. 

But my guess is most security people say if you rely on one solution, the minute that one is cracked you have nothing, and that you 

are in fact much better instead of having an eggshell—you are 

much better having a series of layers of protection which are more 

robust and can respond to different numbers and types of threat. 

Mr. COBLE. Thank you all for being with us. I yield back, Mr. 

Chairman. 

Mr. CONYERS. Thank you. Hank Johnson, Subcommittee Chair, 

former magistrate, is recognized. 

Mr. JOHNSON. Thank you, Mr. Chairman. And for some reason 

this microphone goes limp all the time. Maybe we can get it to— 

maybe with some Viagra or something, we can get it to stay up. 

Mr. CONYERS. I hope nobody chooses to take your words down, 

Mr. Johnson. 

Mr. JOHNSON. Yes. What I would like to ask Mr. Seibel—and, by 

the way, I am happy to know that your firm supports getting a 

handle on this kind of copyright infringement. But I have got to 

ask you, do you think it is morally right for your firm to continue 

to engage in the use of copyrighted material without the owner’s 

consent from a moral standpoint? I would like for you to answer 

that. Is it right? Is it fair? 

62 

Mr. SEIBEL. I think when we look at this issue, our understanding and kind of as we look at our entire business, it is not 

the point nor is it the goal of Justin.tv to distribute content. When 

you look at where Justin.tv began, we started with the idea of 

broadcasting one person’s life on line. That was our cofounder Justin Kan. And the viewers of that original broadcast were so excited 

by the potential of live video online that they too wanted to create 

their own live content. They didn’t want to broadcast their entire 

lives, but they wanted to share live video of interesting events. 

Mr. JOHNSON. Well, now that is different from—there is no need 

for consent and payment for the use of that material that is voluntarily put on the Web. But I am speaking of this precise issue. And 

if you could speak to that, because I don’t have a lot of time. 

Mr. SEIBEL. Certainly. So when designing a site for anyone to 

create and share live video, unfortunately, as in any user generated 

sites, some group of people are going to do that in a way that distributes unauthorized content. And so I want to be clear that the 

goal of Justin.tv is not to support that. I also want to be clear that 

the business model of Justin.tv is not based around supporting 

that. Continued broadcast of unauthorized content is not a good 

base in which to start a business or to run a business in the long 

term. And so when you look at where we have invested our time 

and energy on this front, it took a significant amount of time and 

energy to build out the copyright protection system and the live 

fingerprinting system. And the goals of those systems are to completely remove copywritten content from the site. 

Mr. JOHNSON. You are kind of going far afield of my question. 

But I will ask also, how does Justin-dash-tv or Justin.tv make its 

money? 

Mr. SEIBEL. So Justin.tv, when we look at our business model, 

it is really threefold. The first aspect is an advertising supported 

model. The second aspect is going to partners who want to distribute live content on our platform and charging in a metered format. And the third aspect is going to partners who have premium 

content that they believe they can charge a pay per viewer subscription fee for and to support that transaction and generate revenue from that transaction. 

When you look at our business model, Justin.tv is a significantly 

more robust and viable company as it is able to work with copyright holders as opposed to the opposite. That is why we have invested all of this time and energy in these potential solutions, because in the long run—— 

Mr. JOHNSON. Okay. You could keep going for—you could filibuster for the remaining 1 minute or so of my time. And I am just 

having fun with you. No disrespect. 

What is the difference between this case and, say, Napster, 

which was kind of forced to change its—it was forced to change its 

methods of distribution of copyrighted music without—that they 

were doing it without the consent or payment of royalties or anything like that. How does—can somebody shed light on the Napster 

case and how it would apply to this case? 

Mr. SEIBEL. So I am not a legal expert in terms of the legal part 

of the Napster case. But from a product perspective, Napster was 

designed and built to distribute music content on the Web. EssenVerDate Aug 31 2005 16:19 Jul 14, 2010 Jkt 000000 PO 00000 Frm 00066 Fmt 6633 Sfmt 6601 H:\WORK\FULL\121609\54075.000 HJUD1 PsN: 54075
63 

tially, part and parcel of their product was the distribution of 

copywritten unauthorized content. In addition, Napster avoided 

working with content owners to help reduce or eliminate the 

copywritten content that was distributed by that company. 

Justin.tv is different in two ways. First, the system was never 

designed or conceived of to be distributing unauthorized content. 

And, second, we actively work with over 150 copyright owners in 

the world and give them tools to remove their content in real-time 

from our site. 

Mr. JOHNSON. Anyone else? 

Mr. YOO. Napster intentionally pursued copyright infringement 

as its business strategy, and the Supreme Court in the Grokster 

case made very clear that is a sole sufficient basis for liability by 

itself. What the Supreme Court left open is if you have an innocent 

web site that did not intentionally seek out copyright infringement 

as its business model but is nonetheless used for substantial infringement, at some point it can become liable as a contributory infringer. The Supreme Court did not clarify exactly where that line 

is. It is ambiguous. And the Sony case from 1984, the Grokster 

case, had a chance to address it. The Supreme Court chose not to. 

And in fact, of the five Justices who opined on the proper standard, 

they split more or less right down the middle. So we are—the business community is left with a great deal of legal ambiguity about 

the precise extent to which providers like Justin.tv, who are not actively fomenting infringement, may nonetheless be subject to liability. 

Mr. JOHNSON. Anyone else? 

Mr. FERTITTA. Yes. I have a comment. Certainly I am not an expert on the Napster or Grokster case, but I think one of the differences may be that in those early days the music industry wasn’t 

necessarily embracing technology to what the consumer wanted to 

do. At the time, the consumer wanted to be able to download music 

on the Internet. There wasn’t a system really put in place. 

I think the difference here is we all sit up here on this panel, 

we are embracing technology. We want to be able to give consumers our product on any format that they want, whether they 

want to watch it on satellite, cable, broadband, on their telephone. 

We offer those products all the way down the line. And I think that 

may be part of the difference as far as how that evolved. And we 

are in a situation now where we offer it on all these various ways 

to watch it, yet it can be uploaded on to the Internet and watched 

by literally hundreds of thousands of people for free without having 

to pay for the copyrighted content. 

Mr. JOHNSON. Anyone else? 

Thank you, Mr. Chairman, for allowing me some additional time 

for the answers to the questions. Thank you. 

Mr. CONYERS. You are more than welcome. The Ranking Member 

from Florida, Tom Rooney. 

Mr. ROONEY. Thank you, Mr. Chairman. As a freshman, that 

sounds pretty good. Mr. Johnson asked most of the questions I 

wanted to ask, and that is usually what happens when you are low 

man on the totem pole. 

Mr. CONYERS. Was that including the Viagra issue also? 

Mr. ROONEY. Yes, sir. 

64 

Mr. CONYERS. I warned you about that, Johnson. 

Mr. ROONEY. That is my sign to talk quickly here. Mr. Yoo, I 

really appreciate your testimony. I think that it is incumbent upon 

us, especially my predisposition is to protect the U.S. tradition of 

the value of property rights. And certainly I understand what you 

are saying about the courts leaving it open to Congress to fill in 

the gaps here. And obviously, Mr. Chairman, I think that that is 

our duty moving forward, is to make sure that it is our obligations 

to finish the work that has been started years ago as technology 

and things evolve, that we—the court has punted it to us, and now 

it is our opportunity to address that situation as outlined in the 

Grokster case. 

My questions—I apologize for sounding elementary in what I 

ask. Specifically, Mr. Seibel, I am trying to get my arms around exactly what Justin.tv is. And from the testimony here today, it 

sounds like you have taken steps to try to work with the other entities, but at the same time I can’t get out of the back of my head 

this sort of notion that we have opportunities and obligations in the 

law to act. You know, if you act or you fail to act, sometimes you 

can be just as culpable or liable. It sounds to me like Justin.tv has 

content on their web site that is not permissible. And failing to act 

before that until one of the content-based companies comes and 

says please take it down, it is kind of like going into a jewelry store 

and robbing it but not making a mess when you are in there. I 

mean, I don’t know if that is a fair assessment. But just because 

you aren’t actively seeking out content-based material, but not 

doing anything about it until one of these guys comes and says, 

hey, you need to take it down, in matters of law and fairness it just 

doesn’t to me seem right. 

What would you say in response to that? 

Mr. SEIBEL. So I think the new technology of the fingerprinting 

solution is a comprehensive solution to this issue. I think really 

what you are addressing here is, isn’t there a manual solution that 

we can be implementing. And I think what is most important to 

understand is that on Justin.tv there are 1.9 million broadcasts a 

month. And we believe that any attempt to manually monitor the 

site would create an unfair expectation among copyright holders 

that we were going to be 100 percent or 90 percent or some reasonable percent effective. 

When we think about the solutions that we want to provide, we 

have been focusing on systematic and automated solutions, and 

that is why the live filter is so valuable, because we can ensure to 

a copyright holder that that solution is going to work. 

Mr. ROONEY. Okay. On that point, you said earlier in your testimony that as soon as one of these guys calls you and says take 

down whatever, and that that can happen quickly, what if you 

don’t take it down? What happens to you? Or what could happen 

to you? Do you know, legally? 

Mr. SEIBEL. Unfortunately, I am not an expert. 

Mr. ROONEY. Does anybody? 

Mr. YOO. Justin.tv would lose its immunity under the Digital 

Millennium Copyright Act. To the extent to which they have made 

a copy, they would be subject to copyright liability, subject to statutory damages, and any damages that could be proven. There is an 

65 

open question about whether a soft copy—that is, one that is only 

in the computer—is a copyright violation. There are cases on both 

sides of the question, and it is another area that this Congress 

is—— 

Mr. ROONEY. Mr. Seibel, I am running out of time already. When 

you say that you are entering into agreements with some of these 

guys in the future, you mentioned the NFL. Do you have the NFL 

games on your web site now every week? 

Mr. SEIBEL. So in the context of the NFL, the NFL and NBC 

were looking for an automated solution to remove NBC’s NFL 

game from the site, and then eventually any NFL game that might 

appear on Justin.tv. So when we ran a test just this past Sunday, 

we were actually able to automatically identify and remove the majority of NFL games that had appeared on the site during that time 

period. 

Mr. ROONEY. But you don’t have an agreement with the NFL to 

put these games on your web site. They are just on there, and then 

if they say take them down, they take them down? 

Mr. SEIBEL. As in all user content sites, it is really the same 

issue. When a user is putting someone else’s content on your site 

and using your site to distribute someone else’s content, how do 

you work with copyright holders to address that and to remove that 

content and to remove that user from the site? And so we approach 

it like every other UGC site. 

Mr. ROONEY. Madam Chair, I know my time—could I ask one 

more question, please? Very quickly. Thank you, Madam Chair. 

Mr. Yoo, you mentioned with regard to maybe precluding these 

things even getting on a site before, and you talked about what we 

can do as a Congress to actively do that rather than just reacting, 

how can we be proactive. And I think that you mentioned that we 

need to make consequences for repeat offenders. I believe that you 

said that one of the ways to do that is to swear under penalty that 

these rights aren’t theirs and that they can get in trouble for doing 

that. 

Is that specifically what you are talking about with regard to us 

making a law that would provide consequences for repeat offenders, or is there some more specific solution you have with that? 

Mr. YOO. I think a repeat offender law, as they are doing in 

France and the U.K. for end users who are pirating illegal content 

and posting it, is a potential solution. The other—the question that 

was asked specifically is what about erroneous takedown notices, 

that people are using it anti-competitively to say take down this 

content even though it doesn’t belong to them. Any aspect of the 

system could be abused, and it is relatively easy with corporations 

who are repeat offenders to identify them and remediate them. The 

real problem is in the end users, who are extremely hard to find, 

extremely hard to track down, and extremely hard to enforce rights 

against. And I think what they are doing in France and the U.K. 

is a very interesting solution, assuming that it is done appropriately. It is three strikes. You get two warnings to make sure you 

know it is illegal, and then if the end users persists it is a remedy 

that they say the ISP has some obligation to either limit their service or to disconnect them altogether. And that is an option that the 

Congress could consider. 

66 

Mr. ROONEY. Thank you, Madam Chair. 

Ms. JACKSON LEE. [Presiding.] Thank you. I am going to yield 

myself 5 minutes, my 5 minutes, and then we will make further 

determinations about the questioning. Let me welcome the witnesses and thank you very much for your presence here today. I 

am sorry that we are interrupted by votes. I just have a nonlegal 

question. 

Mr. Fertitta, do you have any relatives in Texas? 

Mr. FERTITTA. I certainly do. 

Ms. JACKSON LEE. Oh, my goodness. 

Mr. FERTITTA. Galveston. 

Ms. JACKSON LEE. All right. Well, I have obviously run into them 

on several occasions. It won’t bias my questions, and I will recuse 

myself. But in any event, I hope you have the opportunity to visit. 

It is a great State. 

I first of all want to thank Mr. Seibel for his genius and creativity. And I hope that our questions don’t disregard the uniqueness of your efforts, but I am going to try to be pointed in my questions and particularly cite language that deals with the Grokster 

case. 

As I understand it, that case establishes liability for peer-to-peer 

copyright infringement that pertains to the unauthorized distribution and availability of music files on the Web. So it is a narrow 

decision. And if I can profess, I will just—yes or no, is it a narrowly 

drawn decision? 

Mr. YOO. Yes. But it has implications beyond music. 

Ms. JACKSON LEE. But it is a narrowly drawn decision. I mean, 

if we look at it, it pertains to music. Of course, it can be used and 

cited in someone’s brief, but it will be up to the courts to interpret 

it more broadly. Is that my understanding? 

Mr. YOO. The copyright law does not distinguish between music 

and other forms of protected acts. So the implication is there, but 

no, it does not decide anything. 

Ms. JACKSON LEE. And so there is the possibility that we would 

legislatively act, or this would have to be an ongoing court proceedings or actions that individuals who felt that they were aggrieved would take in to court. Is that correct? 

Mr. YOO. Yes. 

Ms. JACKSON LEE. Then let me indicate that though we don’t 

often cite our work, I think the Judiciary Committee has been a 

champion on job creation, and it has done so because we have 

taken to task this whole question of copyright infringement. As I 

understand it, when you have a product content you also have jobs. 

You have the institution that depends on content. And I just want 

to cite for the record some deals that have been put forward. 

ESPN has in recent years signed several high-priced deals with sports leagues for broadcasting rights, including an $8.8 billion 

deal with the NFL, a $2.4 billion with Major League Baseball, and 

a $2.1 billion deal with NASCAR. That is a lot of money. And I assume the intent behind that is that those games generate dollars, 

and that means that people are employed in that particular industry, not necessarily—and it may mean that football teams can stay 

open as well, because I understand part of their revenue stream is 

the dollars that they get. 

67 

So when we talk about copyright protection, I would like it to be 

beyond the nuances of those of us who enjoy that kind of debate, 

intellectual property. It really has to be a mainstay of the survival 

of the genius of America, and this Committee has been in the forefront of trying to protect the genius of America. We have done so 

on a number of occasions. And to our chagrin, we have not been 

the most popular Committee here. We have talked about performers, we talked about others. We just have not been popular. 

So my quick question is—and I think I am under 5 minutes. Is 

there where I am right now—5 minutes on the floor? Just to ask 

each of you very quickly how this present structure of the potential 

piracy would impact your bottom line and jobs. Mr. Mellis, am I 

asking the right—you are in Major League Baseball? 

Mr. MELLIS. Yes. 

Ms. JACKSON LEE. Very quickly. 

Mr. MELLIS. Right now, with respect to the piracy, as we have 

been experiencing and observing it for several years, it is very difficult to quantify the impact because most of it is occurring offshore 

through rogue sites and services where we don’t know much. We 

don’t know how many piracy incidents there are. 

Ms. JACKSON LEE. But you do know that if piracy continues and 

your product depletes in value, the potential that you may lose 

jobs. Is that? Can you answer yes or no? 

Mr. MELLIS. Yes. 

Ms. JACKSON LEE. Thank you. 

Mr. Fertitta. 

Mr. FERTITTA. Yes. I can tell you that I am sure this is an important issue for the other members of the panel; I can you that this 

is the most important issue for our company. We have created 

thousands of jobs, we have built a company with our content, and 

Pay Per View represents over half of our revenues. It is over half 

of our total revenue. So when people can choose just to log on to 

the Internet on to Justin.tv and get it for free, it certainly impacts 

our ability to run our—— 

Ms. JACKSON LEE. Thank you. 

Mr. Durso. 

Mr. DURSO. We have 6,000 people worldwide supporting the 

work of ESPN, and obviously our incentive to keep growing that 

asset would be significantly impacted. 

Ms. JACKSON LEE. How many employees worldwide? 

Mr. DURSO. 6,000. 

Ms. JACKSON LEE. And does that impact on your bottom line and 

the potential of losing jobs? 

Mr. DURSO. Unquestionably. 

Ms. JACKSON LEE. Professor Yoo, do you see this as an economic 

issue? 

Mr. YOO. I see it as an economic issue. Jobs are at stake. I used 

to teach in Nashville. The music industry was behind the curve on 

this, and they have been losing jobs like crazy. The industry is 

struggling. The television industry wants to get out in front of it, 

and this Committee has been a tremendous help in that regard. 

Ms. JACKSON LEE. Mr. Seibel, do you want to work with us? Your 

business obviously provides income. Do you see the value of trying 

68 

to get a good roadmap so that you can exist but that we can prevent piracy on the Internet? 

Mr. SEIBEL. Definitely. 

Ms. JACKSON LEE. Let me thank you. We are going to adjourn 

this hearing and—all right. We are going to adjourn this hearing. 

So this hearing now stands in adjournment. Recess, excuse me. Let 

me pull that back. We are going to recess this hearing, and we ask 

that the witnesses remain available. It should be about 10 minutes, 

maybe a little longer. But we need you to stand by. 

Thank you very much. This hearing is in recess. Thank you. 

[Recess.] 

Mr. DELAHUNT. [Presiding.] Okay. The hearing will come to 

order. And let me recognize my colleague from California, Mr. Issa, 

for as much time as he may consume. 

Mr. ISSA. Thank you, Mr. Chairman. This has been a very interesting hearing because I think it has gone beyond perhaps the 

issue just that your organizations are dealing with. And let me go 

to a couple of questions. 

First of all, Mr. Mellis, would you concur that over-the-air broadcast becomes the right of anyone who can receive it, to have it, to 

time shift it, and to watch it wherever they want to watch it? 

Mr. MELLIS. Beyond the television set in the home? 

Mr. ISSA. Beyond the Supreme Court decision. In other words, 

the Supreme Court has held that we have in the Sony Betamax, 

we have an absolutely right on a broadcast to store, and because 

it was a removable device in the case to store it forward. I mean, 

I can take my VHS tape out and I can take it to grandma’s house 

and watch it there. That was all codified in Sony Betamax. Would 

you agree? 

Mr. MELLIS. I do. 

Mr. ISSA. So the question for you is, recognizing that that is not 

a commercial use, that is not a dissemination or a performance or 

a broadcast to others—and you say it very well—at the start and 

end of baseball, football, all the major leagues, that rebroadcast is 

prohibited. So we are not having that discussion here, and that 

may be today’s subject. But let me just go through a scenario. 

I am in San Diego. The San Diego Chargers are playing there. 

Let’s just say that it is not being—I don’t have it available where 

I am. Would you say that, as an owner of seven TVs in Oceanside, 

in San Diego, California, Vista, California, that I could watch it 

there and I could record it on an equivalent today of the Betamax? 

Mr. MELLIS. Yes. 

Mr. ISSA. And if I have the ability to do that and have the ability 

to forward it to myself, I am well within my rights? 

Mr. MELLIS. Well, I think, from a strictly legal context, that 

question hasn’t been decided by a court, although there is a technology available to do that. 

Mr. ISSA. The Slingbox and other similar devices? 

Mr. MELLIS. Correct. But what we are talking about here is the 

uploading of that game telecast for worldwide viewing. 

Mr. ISSA. And one of the reasons I am pursuing this line of questioning is I don’t get you all in front of me very often. I happen to 

believe strongly that your right to go to the audience that you originally broadcasted to, wherever they might be, including the store 

69 

and forward I mentioned, is really what we should be talking about 

today. But I ask this to lead you down a road of a question that 

is today. 

If in fact I were to pay a service to capture in my home, whether 

it is a Slingbox I own or a commercial equivalent, I pay so that I 

may watch that on my BlackBerry because in fact I am away from 

my house right now; I am downtown, I want to watch it. As long 

as I am a broadcast recipient, would you say that I have the reasonable right to have that delivered to me? 

Mr. MELLIS. On your BlackBerry? 

Mr. ISSA. Let’s just say on my BlackBerry. 

Mr. MELLIS. And it is a service that you subscribe from your 

BlackBerry, or are you saying from your television to your BlackBerry? 

Mr. ISSA. Well, let’s go back to the Slingbox because that may be 

a better one. My ability to have delivered to my Washington home 

from my San Diego home a San Diego Charger game or a Padre 

game, would you say that that was reasonably consistent with existing law and your interpretation of it? 

Mr. MELLIS. My view under the Copyright Act is that there are 

two copyright rights that are implicated. There is the platform 

shifting—using not copyright terms, but platform shifting and the 

place shifting. And those—— 

Mr. ISSA. Time and space. 

Mr. MELLIS. Right. Those are the issues. So the question is 

whether or not doing that in the context you described for your own 

personal use, having paid for it already, whether that is a fair use. 

And that hasn’t been decided by any court that I know of. 

Mr. ISSA. And I am going to go down the aisle quickly because 

I happen to be of an opinion—thank goodness, I am not a judge. 

But I am of the opinion that simply broadly saying I am going to 

capture everybody’s football games, baseball games, boxing 

matches, and then make it available on a service is way outside of 

the intent of existing law or copyright interpretations. But as to the 

description I made that whether it is through a service that is literally in my home or a service I contract, how many would you believe that with existing law we should feel comfortable that the 

owner of a San Diego home who wants to receive something from 

San Diego in their home in Washington, D.C. or on their BlackBerry should be able to? Let’s just assume it is a Slingbox for now 

so that the technology is pretty understood. 

Mr. FERTITTA. Once again, I don’t have a legal background, I am 

not a legal expert relative to that issue. But my opinion is if you 

pay for my product and you are paying for your own personal use, 

as long as you paid for it, then that is fine. 

Mr. ISSA. Mr. Seibel. 

Mr. SEIBEL. Well, I think this calls for a legal interpretation I am 

not qualified to provide. I mean, as a consumer, that sounds reasonable. 

Mr. ISSA. Mr. Durso. 

Mr. DURSO. Yeah. Once upon a time I used to be a practicing 

lawyer but not anymore. 

Mr. ISSA. You were probably practicing when Sony Beta was designed. 

70 

Mr. DURSO. Yeah. A long time ago. But as someone who produces 

and distributes content, I think it is a—as Mike said, I think it is 

an unanswered question. I don’t think that—the courts haven’t 

really addressed it, and how that plays out I don’t know. There are 

legitimate concerns about the scope of geography and rights that 

we buy, for example, in baseball in terms of protecting markets and 

the like. So it is a complicated issue. 

Mr. ISSA. Sure. But back to the original premise. If I can record 

on a Sony Betamax set, assuming I find one, and I can remove that 

cartridge and move it here to California and play it at my home 

here, and that is codified in law, then wouldn’t you agree that the 

equivalent would reasonably be anticipated by the Supreme Court 

decision? 

Mr. DURSO. I don’t know that it would be, honestly. 

Mr. ISSA. Okay. So this is something where you don’t consider it 

settled law when we go digital, we go over the Internet, we go to 

something other than a Sony version? 

Mr. DURSO. I think additional questions come into play. 

Mr. ISSA. Professor, you get to end on this. Because for us on the 

dais, at least for many of us, that is the question. I happen to come 

from a consumer electronics manufacturer background. I come from 

that industry that thought it was settled law that the noncommercial rebroadcast by the owner of something for purposes of time 

shifting or place shifting or even product shifting, in other words, 

recorded on this machine, played on another one with a different 

TV, were all pretty much settled law. How would you view that, 

Professor? 

Mr. YOO. I don’t believe it is settled law. I think that, for example, we have—for broadcast, retransmission of broadcast signals 

over cable had to—required a separate statute for retransmission 

consent. Rebroadcast of radio signals over the Internet required a 

separate statute. If it were simply true that if you could receive a 

radio signal—— 

Mr. ISSA. But that is rebroadcast, but not the owner recipient 

who has stored pursuant to a very hard-fought battle in the Sony 

Betamax case or the Motion Picture Association v. Sony Betamax. 

Mr. YOO. But what is interesting is the Sony Betamax case left 

a lot of questions unanswered. For example, time shifting is clearly 

within the pale. What is clearly suggested by other decisions building on Sony Betamax, building a library is probably outside the 

pale if you are going to build it on a durable basis. Space and device shifting is much harder to do. A couple of examples. People 

buy territorial exclusivity for programming internationally and in 

States, and in fact there are State blackout laws. If for some reason 

your beloved Chargers did not sell out their stadium, you would be 

banned from—you would be blacked out in San Diego. Theoretically, a person could be in Washington, D.C., where they are getting the feed and retransmit it back in ways that would potentially 

violate the law. 

Mr. ISSA. I am going to close with a small statement which I am 

taking from the Chairman partially. Our problem on the dais is we 

pass laws or observe interpretations by the courts as part of promoting commerce, protecting intellectual property, and recognizing 

71 

that laws are only effective if they are, one, supported by the 

masses and, two, enforceable. 

What I am hearing here today is that potentially we would reinterpret a law. My question to all of you in the abstract here, hypothetical, is how would we enforce: You can do this, but you can’t 

library it? Well, the Sony product was a durable product and it was 

portable and it met a whole bunch of requirements. So from this 

side, or from the men and women in robes across the street, how 

in the world would we, one, enforce it and, two, why would it be 

the burden of the Federal Government to bring about that very expensive enforcement of finding out whether someone is storing 

something in their home, whether they are forwarding it, whether 

it is durable? Because we have been asked over the years to buy 

into—you might remember the Digital Millennium Copyright Act— 

buy into schemes that were going to empower others to primarily 

do it. And each time when it failed, you have come back to us. 

So I am going to leave that as a rhetorical question, because it 

is beyond the scope just of this hearing. But I think, with the 

Chairman, we are very interested in figuring out whether or not 

what is being brought to us is in fact something that if we dealt 

with it we could be effective. 

I thank the Chairman, and I yield back. 

Mr. DELAHUNT. Thank you, Mr. Issa. You know, obviously I 

think the sentiment here on this side is to ensure that the creative 

community is protected and continues to operate and function in a 

way that produces the kind of products that the United States has 

a lead, has an advantage on, if you will. So I believe that to be 

unanimous. 

I think the enforcement and the compliance issues are the real 

ones here, as suggested by my friend from California. And I am always struck, being a former State’s attorney, by the imposition of 

very long prison sentences, and often cases mandatory ones, on 

some juvenile or, maybe for legal purposes, an adult, but maybe 19 

years old that goes in and robs a convenience store and comes out 

with around $30 in cash and ends up doing 8 to 10 in a maximum 

security prison, and yet here we are today listening to the concerns 

that are obviously legitimate where I am confident that in the aggregate the losses are substantial. 

If there is anyone on the panel who can describe or estimate 

what the losses are, I would be interested in hearing from any panelist. Mr. Fertitta. 

Mr. FERTITTA. Certainly, Mr. Congressman. I can give you an 

idea just based on our experience. We operate the Ultimate Fighting Championship, which is the largest Pay Per View provider of 

sports in the world. And one of our recent events, which was just 

held back in November, just our team of people that were trying 

to find pirated streams found over 271 broadcasts in over 160,000 

views in just that one night. And as I had mentioned in previous 

testimony, it is important for us, because it is a live sporting event, 

that we charge money for. It is extremely perishable. Once it is 

over, it is not worth what it was once it started, once somebody 

knows the outcome of what happened in that. 

Revenues that are generated through there represent over half 

of our revenues of our overall company, and just that number of 

72 

streams represents probably in the neighborhood of 40 percent of 

the total amount of business that we—— 

Mr. DELAHUNT. Give me a number. 

Mr. FERTITTA. Well, Pay Per View we charge $44.99. And if there 

was 160,000 people watching that night, that is potentially 160,000 

people that weren’t paying $44.99. 

Mr. DELAHUNT. What is that? 

Mr. YOO. $8 million. 

Mr. FERTITTA. That is just what we found. 

Mr. DELAHUNT. Less delivery costs. I mean, compare that. What 

is it in terms of the order of magnitude as far as the balance of 

payments issues is concerned? What is it in terms of the loss to the 

economy? And what is—does anyone know here, what is the longest prison term that has been served by a pirate? Professor? 

Mr. YOO. I don’t know. 

Mr. DELAHUNT. Mr. Seibel? 

Mr. SEIBEL. I don’t know, sir. 

Mr. DELAHUNT. So no one knows. 

Mr. YOO. There is a famous case of someone violating the DMCA, 

a person by the name of Sklyarov, who recently went to jail. He 

was one of the first people to go to jail for creating a technology 

that allows this form of piracy. I don’t know that—it is in the number of well over—it is in the years, I think—I am trying to remember, in the 10-year range, but sentences are along that order. But 

it is rare. 

Mr. DELAHUNT. Well, I guess what I am saying, until there are 

severe sanctions—because we can have these very erudite and arcane discussions about dealing with the concerns that you are expressing. But until we have enforcement and appropriate sanctions 

by courts, many of my friends on the other side support the concept 

of mandatory sentences. I happen to disagree. But once that happens—this is theft. This is grand larceny. And until we get serious 

about enforcement and prosecution, we are going to continue to 

have—we are going to continue to have interesting hearings such 

as this, and I dare say we are not going to make a lot of progress. 

Now, Professor, I am sure that you could provide us guidance 

and counsel in terms of how the law needs to be changed. I am 

sure our own staffs can do that. I am sure there are technologies 

that are out there and we should have, as Bob Goodlatte indicated 

earlier, continue to have meetings, et cetera. 

But somebody has got to get serious about enforcement. And at 

one point in time, I know that we implored the Department of Justice to create a task force to do this. I don’t know whether it still 

exists. Maybe we need some sort of an oversight hearing. But if 

someone is going to steal $8 million from one particular outlet and 

there is no consequence—there is a difference between a young 

male 18 or 19 years old who robs a convenience store and does 8 

to 10. Deterrence really doesn’t exist in the majority of those cases 

because that young male doesn’t have in his back pocket the 

United States Criminal Code, and he hasn’t done an analysis of 

what the potential sanction may be. Believe me, that is the case, 

based on my own experience. So the concept of deterrences really 

doesn’t play. But whoever is doing the $8 million hit to the company and to our overall economy, I am sure he has a battery of 

73 

lawyers that are either going to raise all of the issues that I heard 

being discussed here today, contributory infringement and all these 

concepts that are freedom of free speech and in the marketplace 

and et cetera. But until there is a serious consequence—and I 

think it is incumbent upon people who are in the industry working 

with the Congress, working with the executive branch to say if you 

are a thief you go to jail. If you are stealing and you can establish 

it beyond a reasonable doubt, then let’s impose harsh, severe sanctions, because it is not just the individual sport, it is not just the 

individual company that is being victimized here, but it is all of us. 

I mean, this is an important aspect of the American economy and 

a global economy today. 

Any comments? 

Mr. DURSO. I couldn’t agree with you more. 

Mr. DELAHUNT. Well, I have been given some questions to ask 

you. All right. Mr. Seibel, could you comment and respond to the 

document that Mr. Fertitta introduced into the record? 

Mr. SEIBEL. Yes. Thank you for the opportunity to do that. For 

a second, I want you to excuse the title of this document and consider the text. What is clear is that this is a guide for broadcasting 

video from a video game console to Justin.tv, which is an extremely 

popular practice. If you consider the second sentence. This is a popular request among broadcasters who see channels like four-player 

podcasts where they broadcast or stream capture the video game. 

You can look at the second instruction. A way to send a video from 

your console to your television. The third instruction, most plug 

their console into their TV using composite cables and use another 

set of cables to send audio. 

If you were to follow this guide on Justin.tv, you would not see 

television showing up on your channel, you would see a video game 

from Xbox or a PlayStation 3. I just wanted to make that clear. 

And I do apologize for the header and the title text, because I 

do believe that that is slightly misleading. That is something that 

we will certainly correct. 

Mr. CONYERS. Thank you. I want to thank all of the witnesses 

for their testimony, and without objection, Members will have 5 

legislative days to submit any written questions to you, which we 

will forward and ask that you answer as promptly as you can to 

be made part of the record. The record will remain open for 5 legislative days for the submission of any additional materials. 

Thank you again, and the hearing is adjourned. 

[Whereupon, at 1:45 p.m., the Committee was adjourned.] 

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