Statement of Norm Coleman
Senate Committee on Governmental Affairs
"Privacy & Piracy: The Paradox of Illegal File Sharing on Peer-to-Peer Networks and the Impact of Technology on the Entertainment Industry"
September, 30 2003

On September 8, the Recording Industry Association of America (RIAA) fired its first volley of copyright infringement lawsuits in its battle against illegal downloading. The industry promised to "approach these suits in a fair and equitable manner" and that it is initially focusing on "egregious offenders who are engaging in substantial amounts of illegal activity."

I am grateful that the documents provided to the subcommittee substantiate that claim. However, there is nothing under current law that requires the RIAA to target only “egregious” offenders in the future. There is nothing in current law that restricts the scope of the RIAA’s use of subpoena’s to ferret out unlawful downloaders.

It has been these developments that led to my concern about the use of subpoenas to combat the illegal taking of copyrighted music files online – and the potential for abuse of the legal process. However, I am also troubled by the use of the DMCA subpoena procedure and lawsuits to spear the registered owner of the computer rather than the actual user of Kazaa. The Subcommittee has been in contact with numerous individuals whose family members, friends, or roommates used the Kazaa service. Unfortunately, these unsuspecting individuals are now the targets of subpoenas and lawsuits.

Recently, I had the honor of providing a brief statement to Senator Brownback’s hearing before the Commerce Committee on Cyber Identity Privacy and Copyright Protection.

There I stated principals that are the basis for our hearing today:

* On the matter of subpoenas, I am concerned about the scope and the impact of the broad powers extended to the RIAA and other copyright holders to issue subpoenas. Is it possible for innocent people to get caught in the legal web that RIAA is trying to create to stop illegal piracy?

* I believe we must review the potential civil and criminal penalties needed to ward off the theft copyrighted materials, and determine if such measures will work,

* As it relates to the use of technology in general, I am troubled by the growing use of systems and devices to reach into our online lives and pluck out information about us with or without our knowledge. This is particularly relevant here since technology is being used to not only steal the work of artists -- but to prove that someone has indeed stolen it.

* In addition, part of our continuing inquiry will address why P2P networks do not proactively prevent this illegal activity from occurring initially and how P2P networks like Kazaa envision moving from a business model predicated upon illegally trading songs to a legitimate business model that derives revenues from licensing copyrighted intellectual property.

There is more at issue here than just subpoenas -- and the impact of the use of the power of a subpoena and threat of legal action to compel consumers to cease and desist.

I believe the very future of the American music and motion picture industry is at stake -- and, with it, a major contributor to our nation’s economic stability.

I am pleased to have two leaders of the entertainment industry here with us today – Mitch Bainwol, CEO and Chairman of the Recording Industry Association of America and Jack Valenti, President and CEO of the Motion Picture Industry Association of America.

As Mr. Valenti has previously noted, the movie industry alone accounts for 5% of our nation’s economic output. And, as both Mr. Bainwol and Valenti have made clear, the act of downloading of the work of their members without their permission is illegal – and, is contributing to a significant economic decline in their respective industry.

I think we can all agree that the growth of current, and future, technologies bodes well for improving the quality of our lives and productivity…But, we must also accept that it could also spell economic doom for the entertainment industry.

In just a short time, it will be possible to download a full-length motion picture movie in minutes, to distribute that movie across the world before it makes it cinematic debut.

I believe we have the capacity to preserve the economic, artistic and cultural integrity of our arts and entertainment industry in America. But, it will take a concerted, cooperative effort among all involved to make it work.

With us today are others who are impacted by those changes in technology – those who own the brick and mortar retail outlets that are suffering from a decrease in over-the-counter sales of CDs and other music products.

And, I want to thank another witness – Lorraine Sullivan – who is the recipient of one of the subpoenas issued by the RIAA. Her testimony will help our broader understanding and discussion today about the impact of such suits against music lovers – and what the potential ramifications may be for future customers of the industry.

We have other issues that must be addressed today.

Those who facilitate illegal file-sharing are also here with us this morning to present their side of the story.

Kazaa has over 60 million individuals who download. Yet, they have been accused of aiding and abetting those who willfully violate copyright laws.

There are a number of compelling issues that must be addressed.

Kazaa asserts that they do not condone illegal file-sharing and that they want to move toward a legitimate business model. This raises some important questions.

Such as, if the financial viability of the Kazaas of the world is based upon illegally trading files, what incentive do they or their consumers have to change their behavior?

What prevents them more boldly and openly informing their users about illegal activity?

We also have, with us today two artists, LL Cool J and Chuck D., who I will hope can shed some light, from an artists perspective, on what he sees to be the changing nature of the music industry – and for them, what has been the solution to the intricate balance between artistic integrity – and, quite frankly, making a living.

Finally, we will end our hearing today with a discussion of the ethics of downloading and the potential need for new business models.

Have we inadvertently created a culture that encourages the very behavior that today we feel needs to be corrected.

Let me be clear, downloading someone else’s property without their permission is illegal. Period.

Yet today there are 60 to 90 million people who use P2P networks to illegally trade copyrighted material.

Many of these users are teenagers or younger. This generation of kids needs to be made aware that they are engaging in illegal behavior. I do not believe, however, that aggressively suing egregious offenders will be sufficient to deter the conduct of an entire generation of kids.

As a former prosecutor, I am troubled by a strategy that uses the law to threaten people into submission. Yet, as a former prosecutor, I am also troubled by a prevailing attitude that says because technology makes it free and easy, its okay to do.

I believe solving this problem will require a way of thinking that allows the industry to protect its rights -- but to do it in a way that creates new consumers by intellectually and financially investing in creative methods of delivery music to fans.

Technology and the Internet offer great hope for a brighter future – but with it comes great concern over how they are used and how property rights are protected.

It is clear that, today, the law, technology and ethics are out of sync.

They are woefully out of step with one another. Hopefully, the dialogue that we engage in here today will be the factual and intellectual foundation upon which we can engineer some thoughtful and practical solutions for the future.

Part of the title of this article is "Copyright Reform". But - I don't see much stated on the need to change the copyright laws themselves. The existing copyright law, with astronomical penalties and super-long copyright terms, is very unfair and unjust and should be changed.

Important point which one of the panel participants needs to make: If a law is unfair and unjust, then you can't expect too many folks to respect it!

"I am grateful that the documents provided to the subcommittee substantiate that claim. "

In what way?

I am disappointed in Mr. Colemans comments about ethics and downloading.

"Let me be clear, downloading someone else’s property without their permission is illegal. Period."

This is a misstatement of fact. Granted its politics and he may have to make statements like that to placate the evil doers (RIAA) but it is distressing nonetheless.


"It is clear that, today, the law, technology and ethics are out of sync."

Mr. Coleman misses the point. The so called ethics espoused by the RIAA are out of step with the current economic paradigm. The ethics, the people and the technonolgy are in perfect sync, it is the RIAA who can't keep time.

The real problem is that the entertainment industry is trying to artificially prop up the status quo in the face of a changing economic landscape that is making it obsolete.

"I believe solving this problem will require a way of thinking that allows the industry to protect its rights"

The industry is not trying to protect its rights but rather it is trying to hold on to a monoply (granted for a specific reason) that has lost its reason for being.

Congress will not help us. It is up to us to fight back.

This whole debate showed that the American public DO NOT WANT CD's, of which they still want to make.
It also showed how GREEDY the RIAA and MPAA are.
One of my favorite lines came from valenti, he discussed that there are very repulsive stuff on kazaa, meaning teen porn, BUT PLEASE GO TO THE MOVIES OR VISIT YOUR LOCAL VIDEO STORE, AND TELL ME THE MPAA DOESN'T HAVE ANYTHING TO DO WITH SEX OR REPLUSIVE MOVIES!
Also, the RIAA is lieing when it say it is using its LAST resort, i don't believe anybody really believed that, not coleman atleast. The guy from kazaa did well, except for that stuff about blocking files, of which i could of helped him out with that one. Sure you can block the name, but do u really block the file, it is impossible to block the right files, the names are not sufficent.
Kazaa and other P2P do give people opportunities the RIAA and MPAA would not give you, of which i enjoyed chuckd.
Also, the RIAA and MPAA are dragging there feet, they see people downloading music for free, and they still won't come out with a service like kazaa or distribute music on P2P networks, they only want to do it on websites and what not, ADAPT TO TECHNOLOGY is also what i was thinking of most of the time when i was listening to the RIAA and MPAA, they don't offer the ppl what they want, so they steal music. Plain and simple, give the ppl what they want and they will pay. So, all in all, the RIAA will be a 10 billion dollar industry soon and continue to drop, there control is dwindling, there CD format is obsolete, though they still mass produce it and act like its 1990 and the CD is really hot. They really need to get over themselves, the RIAA and MPAA.
All in all, the guy from sherman networks said it right, Its all about CONTROL! Also, the guy at the end said American Greedy businesses, of which i totally agree that the RIAA and MPAA are just that.

I don't think Coleman's serious. there's so much hot air in washington I'm suprised the snow doesn't melt in winter.

They just continue to make things worse on themselves. The reason they started losing sales is due to the fact that they sued Napster not because of downloading. I don't see anything there that eases my mind. Still the stupid people who are suppose to be working for us in the government aren't. The big music companies won't have soon.. Keep boycotting! I've been telling friends not to buy CD's This is my first post and I love this site thank you for it and for keeping us updated

welcome boycotter, this is a sweet site!

"Mitch Bainwol announced a major change to the group's peer-to-peer enforcement policies. From now on, he said the RIAA will give notice to alleged egregious P2P infringers prior to filing lawsuits against them."

"In addition to encouraging settlement talks ..."

"We are trying to be reasonable and fair and allow these cases the opportunity to be resolved without litigation."

http://www.billboard.com/bb/daily/article_display.jsp?vnu_content_id=1990004

What's the difference ?

The consumer will still be forced into submission.

I'd like to see the math on these settlements. If they get 2500 dollars for someone downloading a couple hundred songs. that's $12.50 per song. lets multiply that by the amount of songs that are "suposedly" downloaded illegally by 60 million people. I don't have the stats but I'm willing to guess it's a whole lot more than what all five companies make in a year.

and a lot more than they claim to be loosing

So what his proposed solution to it all? Change copyright laws? ROFL!!!! The *AA's won't let the happen. A few "donations" to the right congressmen and whatever bill he proposes dies.

Sounds to me like a lot of hot air to get some good old fashioned name recognition which later translates into votes.

I just did the math. according to USA today in todays editon there's 2.6 billion illegal downloads per month. at 12.50 per download, if everyone settles they would get 32.5 BILLION dollars PER MONTH. wow what a business they could get out of recording and just keep sueing people for their profits

..what troubles me is the current philosophy that, when it comes to intellectual property, that industries and corporations have rights to be "protected." To me, this is a glaring flaw of the current copyright structure.

This whole problem is so much broader than Kazaa and other file sharing P2P networks. How many times has a friend gave you a cd of his to copy? How many times have you borrowed a friends book to read, how many time have you gone to the library and photocopied a few pages out of a book, making a copy for your own personal use, and didn't have to pay for the book? Should the author sue you for copying that information out of a public library? Should the author sue the library? Should the writers industry push for a ban on all photo copiers? When does this madness end?

Also, if the RIAA is downloading "small pieces of songs" off of your computer to prove you are offering those titles for uploading to other users computers, when the RIAA receives these settlements, are the artists getting the settlement money? I would love to see Billy Joel, Tom Petty, Rammstein, or the Thompson Twins on world wide television with part of a settlement check.

Carey Sue has already said the artists are not getting any of the settlement money

raoulduke1, you hit the nail right on the head when you said,

"The industry is not trying to protect its rights but rather it is trying to hold on to a monoply (granted for a specific reason) that has lost its reason for being."

I could not agree with you more!

compmore:

Yeah what you said is true, So how can the RIAA say they are there to help the artists get paid when they're not even giving any of the settlement money to them. How about all of the settlement money be divided up and go directly to the artist. If that were law then see how quick the RIAA would be to come up with a different solution.

jayo

Until an honest dialogue takes place with Congress, this problem will never be addressed, much less solved.

Yesterday's hearing did not qualify as honest dialogue.

ETHICS! KISS MY ASS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Judging by the response this "balanced" hearing is getting, it sounds like the senator got his bribe..i mean, campaign contribution from the RIAA. They do work fast.

The only REAL reform would come if we got CodeWarrior's bill passed. I smell these cats are going to try to pass additional laws against us listening to Coleman, Collins, Pryor, and especially, that Nazi Carl Levin (ok...he's not a literal Nazi, but he acted that way toward Alan Morris).

MY HUSBAND IS DEAD BECAUSE OF WASHINGTON ETHICS! OH YEAH WASHINGTON, DID YOU THINK YOU COULD JUST FLUSH THAT ONE DOWN THE TOILETTE JUST LIKE YOU ARE TRYING TO DO WITH OUR WHOLE CONSTITUTION?!!!!! I'M GOING TO BE YOUR WORST FUCKING NIGHTMARE!!!!!!!!!!!! OCTOBER 2nd IS MINE!!!!!

RIAA

George,
what did u think of the hearing?

I am frequently bothered by anything ANYONE in government does. These people are elected by us, but I never see any of these officials asking us what we think or what we want!. I certainly vote my mind. And I know Big Business runs government. But if I was an elected official who had to tackle this subject, I'd have to get out on the streets and find out what the voters think. I know...pigs will fly before our officials will take what we think into consideration.
....FOR THE PEOPLE, BY THE PEOPLE

Lately that statement makes me wince

I wholeheartedly agree with the idea that the RIAA's current business model is fading into obsolescence... But we must also consider that the change cannot be rapid, as the integrity of our nation's economy is really in question, as valenti says, entertainment does make up a significant portion of our economy, and we cant just have these huge companies falling on their faces. It is partly their fault, for not taking their technology to a new level, but it is also just technology itself- It is essentially rendering something that used to be worth something (because we had no choice) into something that is worth nothing.

There was a time before recorded music, but that was a long time ago. The big artists will not suffer (as some pop stars can make millions in one night doing a live 'show') And the smaller artists will no longer be restrained by geography or the cost to distribute music or even have it downloaded off their own site (P2P decentralizes distribution, so that noone really foots a big bill for bandwidth) So what we really have is the label itself (which has tons of employees, which need to work) is becoming obsolete. Not the music, not the artists. The RIAA have money, money is power, power is the ability to keep their money. What the RIAA needs to do is come up with something you cant record and put into the computer at the same quality. I dont think the actual song should be the issue, it should be the recording. So say, they distrubute special music DVDs with 5.1 true audio channels. First of all, DVDs have decent copy protection, second of all, if you tried to copy it analog its not that easy to get 5.1 channels, also not easy to come up with a PC format for that kind of file.

The reasons why movies arent suffering heavily yet is that they still offer a better package in the theatre than anything you could possibly get at home, especially on the computer (sound and picture quality, etc)

Anyway, ill have more to rant about another time, about the musical enlightenment available throught P2P, but for now Im just gonna add the news feed to www.thecommotion.com.

What about "FAIR USE"??? And what about the 1992 Home Audio Recording Act?? It seems that Senator Coleman has missed many points in his flat out statement that "downloading someone else’s property without their permission is illegal. Period." The copyright laws provide for fair use, and NO you DON'T HAVE to have permission to do so.

The 1992 Home Audio Recording Act allowed an EXEMPTION from copyright infringement, with a tax attached to blank media. This "exemption" permits the home recording of music for personal use. Why did he not address these issues?

Two things need to be done to fix this mess. #1) Reaffirm the HOME AUDIO RECORDING EXEMPTION! If you are downloading or uploading for personal use only, there is no harm. Mr. Coleman needs to look up the word 'steal' in his dictionairy. When a file is copied, the original doesn't disappear, and is NOT stolen.

#2) Modify copyright law! The current laws extending as far as 75years past death is completely absurd! Our forefathers are turning over in their graves at the thought of a legal monopoly being extended that long in our Constitution. Copyrights MUST be scaled back. There is no reason on the planet a copyright should be granted for more than 30 years. This should also be the aim of ANYONE boycotting the RIAA.

Our government is a joke. It is clearly not "....FOR THE PEOPLE, BY THE PEOPLE". Just look at what lawmakers have voted themselves in pension benefits and you'll understand what I mean. Only by voting out EVERYONE will a real change start to take place. And of course, it is only a start.

Valenti is full of crap.
Today, it was announced that in Detroit, GM is laying off 18,000
people. You think many of them are going to the movies at 10 bucks a pop?

If you look at what the "stars" demand in salary, or percentage of the profits, you'll see the poor little grips and technicians don't make diddly in comparison, and they get paid before the box office receipts come in, so this crap about hurting the little guy is crap. I didn't see old Jack "Hacking Cough" Valenti out in front of the DC courthouse with a cardboard sign. Looked like he hasn't missed many meals...even though his brain is missing quite a few neurons!

Boycott the Bastards!
Pass CodeWarrior's Bill!
Register to VOTE!

lwookowski - one thing, this technology is not new. it's been around for a few years now and many industries have learned to use it to keep up with the times. Millions of households use this technology every day as part of their lives. Technology isn't moving too fast, These greedy self centered individuals REFUSE to change with the technology. If you were making billions of dollars a year would you consider changing your sucessful business model for something that wasn't proven yet? now it's proven and they need to get on board. They have no sympathy bankrupting old people, children and college students. I have none for them

It is a monopoly issue. I guarantee if a group of us on this board got together and put together an all digital Recording Studio. Base it on fee for service for artists, instead of the sign your soul away contracts being used now, and distributed digitally at a reasonable price, you would see the Big 5 engange in some sort of collusive pricing, political manuvering, or even litigation to put us out of business so they wouldn't have the copmetition, and then offer to buy up our model at pennies on the dollar as soon as they forced us out. Much like the Bell Corporation had to be broken up so that there was competition in phone service, the entire entertainment business needs to be examined, to see why it consistently fails the consumer yet continues to survive in it's present form rather than going the way of the saber tooth tiger.

tel me more about this all digital recording studio...

We are experiencing some problems posting comments to news stroes on boycott-riaa at the momnet and the coders are working on it...in the meantime you can post comments thrgh DMusic.Com

Otech1 posted: "Mitch Bainwol announced a major change to the group's peer-to-peer enforcement policies. From now on, he said the RIAA will give notice to alleged egregious P2P infringers prior to filing lawsuits against them."

"In addition to encouraging settlement talks ..."

"We are trying to be reasonable and fair and allow these cases the opportunity to be resolved without litigation."

http://www.billboard.com/bb/daily/article_dis play.jsp?vnu_content_id=1990004

What does this mean?

sounds to me like they are going to try to beat the reporters to give you the notice that you are busted and settle before you have a chance to talk to them

i meant talk to the reporters

Anyone notice how the RIAA is now mentioning "commercial piracy"? I would venture a guess how much they loose from file-sharing as opposed to commercial piracy, but I'm sure they will be happy to give us accurate figures.

If they think their sales are down, wait until they release their last quarter earnings!

Dave

I'd like to think our boycotting has had a larger affect than filesharing, but what do I know.

I believe today the boycott is working nicely, and also ppl are just fed up with the labels, and not getting it together. There are so many more factors involved in this study of why sales are down, its just another way they are trying to write history and say that there industry died because of piracy, but filesharers will be writing a different story.

they still don't want to acknowledge the boycott as part of the reason sales are so low

I wonder if $18.00 for sh** has anything to do with it?

Of course the boycott is working..the RIAA member sales are down in the 30% range from three years ago ..(if they can ignore the economy so can we) Meanwhile at indie label after indie label sales are up. What is the difference? Indies don't attack their customers, they offer a better value usually through lower pricing, more compelling music that caters to niche markets rather than trying to be all things to all people.

Lets picket all record stores in malls across the county. The signs in the mall will get attention!!!!!

Thanks for the update, Bill.

:-:~ Phantom