Forget The Stardust, This Is Business

The motion picture industry put its best foot forward at the Oscars on Sunday evening March 24. The historic Best Actor and Actress wins and acceptance speeches, by Denzel Washington and Halle Berry, on the same night the Academy of Motion Picture Arts & Science honored Sidney Poitier with a lifetime achievement award, were stunning. Robert Redford was given a special Oscar by presenter Barbara Streisand, after which he talked about creative freedom. Woody Allen made his first Oscar appearance, introducing a special tribute film about New York, and famed movie composer and also-ran Randy Newman was finally honored with an award after 16 nominations.

It was an event of drama, history, passion and suspense that could have garnered an Oscar itself. The evening reminded me why I became a movie fan in the first place.

Then I went back to work Monday morning.

Amid the stardust of the previous evening I forgot all about the faxes, e-mails and clippings on my desk from Friday on proposed legislation by Senators Ernest Hollings (D-S.C.) and Ted Stevens (R-Ark.) called the Consumer Broadband and Digital Television Promotion Act. The bill basically tells consumer electronics and PC makers and the entertainment industry that if they cannot come to an agreement on copy protection and fair use regarding digital content within one year, one will be developed by both sides with government arm-twisting. To this observer the language of the legislation is far too broad and sweeping and leans heavily against hardware makers.

Home Recording Rights Coalition chairman and CEA president Gary Shapiro said in a prepared statement that the bill does recognize the importance of "encoding rules" to limit impositions on consumers by content providers. But Shapiro said several aspects of the bill go farther than even Hollywood proposed concerning home recording. "[Fox and Disney] no longer have any objection to home recording [of video] or to the circulation of copies 'anywhere in the house'— so long it is not re-broadcast over the Internet." (See p. 1 for more details.)

So let's assume this bill gets passed. CE and PC products would have to be built to conform to the new rules. The FCC will referee whether each new product meets these goals, a role that it is not designed nor has the resources to play. That should dramatically slow down product innovation right there. Hardware prices will go up, or margins will go down, or both. And all for hardware that will have less functionality than today's digital and analog products. That means lower sales for everyone, including Hollywood.

Do the backers of this bill really think that Americans will pay more for less functionality in their electronics, in an era where they can share or download music over the Internet?

Hollywood and their backers in Congress may think so, but consumers won't. You know, this may just be the latest lobbying and kabuki dance from D.C. on this subject. But just to be on the safe side, write your representatives in Congress, as both a consumer and a retailer, to vote against this bill. And take a look at the Home Recording Rights Coalition's Web site at www.hrrc.org for further developments.