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Interviews: Gary Shapiro Responds
Posted by Ernest Miller on Tuesday, November 05 @ 17:09:51 EST Consumers
Gary Shapiro is president and CEO of the Consumer Electronics Association (CEA), the U. S. trade association representing over 1000 companies in the consumer electronics industry and owning and producing the world's largest consumer technology event, the International Consumer Electronics Show (CES).

Mr. Shapiro also chairs the Home Recording Rights Coalition and recently, he famously took on Hollywood in this commentary on C|Net News (The New "Copyspeak"). LawMeme looked askance at Hollywood's response (Interpreting Cary Sherman).

A short time ago, we opened this forum for readers to submit questions for Mr. Shapiro (Ask Gary Shapiro, Consumer Electronics Assoc. Pres.). LawMeme would like to sincerely thank Mr. Shapiro for his participation. Without further ado, here are Mr. Shapiro's responses to the 10 selected questions:

1) Anonymous:

For the last 20 years, copyright law has been working as a one-way ratchet: Congress has been expanding the scope of copyright owners' rights at the expense of the public. What would you say has been the single worst development in the two decades you've been working on these issues? What about the best development?

The worst example, in retrospect, was Congressional passage of the 20 year term extension. That was a public taking without debate. The best thing remains the 1984 Supreme Court decision (Sony v. Universal, aka "The Betamax case") clarifying contributory infringement and fair use.

2) MurphysLaw:

I imagine that if [consumers with video recorders] woke up one morning and found that they couldn't record [television] anymore because someone flipped the broadcast flag on at midnight the night before, would that raise enough of a din in Washington to get attention, or would they be as ignored then as they are now?

Is home recording a big enough constituency for politicians to worry about?

After over 20 years of working on copyright policy, I can honestly say that consumers are starting to have their day. The issues are written about in the popular press, legislators are familiar with them as consumers (and because they have kids), legislators are relying more on the Internet (especially to receive constituent communications in the post-anthrax Congress), and tech-savvy consumers are more likely to dash off an email to Congress or the press on the subject. Having said that, the content community is probably collectively the largest giver of campaign contributions, they have a compelling case to make about a great U.S. export of value, culture and language, they are contributing heavily to think tanks and hiring lobbyists, and they have all sorts of big ways to sway a politician (like providing Barbara Streisand at your next fundraiser). Politicians are compromisers by nature and they will try to please the content community at least in part.

3) Anonymous:

Most people like free stuff eg. beer, food and music. You name it - if it's free you draw a crowd. The internet is one big copy machine with countless free files and the numerous users online control the data.

[W]hat do you think will stop the millions of fingertips clicking on copyright material in this mega media player?

I think the marketplace will provide most of the solution. Bon Jovi is asking CD buyers to register their CD serial number on line. In turn, consumers get deals on concerts, info on the band, etc. But mostly, the content industry is trying to preserve an ancient distribution model where someone buys a lot of what they don't want to get a bit of what they do want. Why pay $20 for a CD with one song you want? A copyright is a monopoly and that monopoly has been taken for granted and consumers have been abused. The marketplace has now provided a response. While some call it theft, I disagree, as the taking deprives the owner of, at worst, a potential sale (as opposed to stealing a dress which imposes a real cost on the dress owner). Copyright owners clearly benefit from downloading as they get bigger exposure. They get hurt if they lose sales. I am not convinced that this net loss or gain is that great. I would prefer to focus on all the beer in the barrel rather than the drops that slip over the side.

Even having said all this, at some point you shouldn't be able to click and distribute a new movie to millions of people, so we are working with the content community to see if we can agree on modest technological restrictions. For example, ten years ago we agreed (and Congress passed a law) to restrict digital audio recording devices so you could not make copies of copies. We also pay royalties on the recorders and the media so consumers can make copies off an original. The audio devices contemplated (DCC, minidisc and CD-R) have not taken off in the marketplace and a lot has shifted to the Internet and computers. But the precedent is there.

4) Anonymous:

Do you think the content industries will eventually give up trying to control decentralized peer networks even if they do not become profitable? (For example, they gave up against Video tape, but video ended up being a lucrative channel. I don't see peer networks ever generating that kind of revenue.)

I think content owners will fight almost any new technology that would change their business model unless they had a say in how it is introduced. They fought talking movies, radio, television, cable, the VCR, the Internet and now HDTV. They accepted CD (after a while) and the DVD. Funny thing about life is that the only certainty is change, yet we spend so much effort trying to preserve the status quo.

5) Anonymous:

I know you've been involved in the rollout of HDTV. What barriers remain to this technology [before it becomes] ubiquitous? How do we overcome them?

The media has focused on the slowness with which broadcasters are shifting to over the air HDTV, but actually HDTV is the biggest product success in history. Consumers have invested some $6 billion in three years and the satisfaction rate is high. I spent this weekend in CE stores and HDTV is hot and on display everywhere. I am not concerned about the pace of roll out as it is meeting the exact projections we made in 1996. This alone is surprising, as nothing ever happens as you predict it will.

6) joeclark (joeclark a-commercial joeclark point org)

What legal changes do you think are required to improve accessibility, and what changes would CEA support? The two responses may well be different, which will be of particular interest. (I should also ask what changes CEA would oppose.)

I am baffled by what you mean by accessibility. Here in Washington speak it means access by people with disabilities - and we are doing a lot in that area with our products, captioning, etc. Assuming that's what you mean, I think product makers keep trying different ways to reach new markets so as long as a need is perceived it will be met. The challenge is when a mandate is imposed; we spent a lot of time fighting a proposal to require every product to be accessible to a person who had any type of disability. Try building a phone for someone who can barely see, that is also good enough for someone who can't lift things, with a loud enough ringer and visual keyboard for someone who is hearing impaired - get the idea?

If you mean accessibility to copyrighted product (after all this is what the big topic is), then I would still have the same answer, only with different words. Technology (storage, transmission, sensing, bandwidth) is moving forward rapidly and manufacturers are relentless competitors looking to do it faster, better, smaller, and cheaper. To the extent they get it done innovatively and first, they make money. The only changes I want is one that allows rigorous competition, because then consumers win. We oppose mandates as what may seem like a good idea (like the v-chip) becomes embedded in government interference and if every manufacturer has to have the same feature, then not one will promote it because there is no competitive advantage. The only time a mandate makes sense is if it is narrowly defined to set the playing field...every manufacturer has to meet a threshold standard for a clearly defined public purpose. But the problem with most of the proposals is the law of unintended consequences and the old saw about good intentions.

7) seaan (seaanseaan@concentric.net)

What is your opinion when a consumer electronics manufacturer embeds copy-controls in a device without any notification to the end-customer?

What is so great about the free market is that consumers have the last word. Manufacturers and retailers lose money every time a product is returned by a consumer. They can't resell the product as new and they have to pay the handling, shipping and logistics costs of sending it back to the factory. Every retailer and manufacturer tries to avoid returned product (yet they respect the desire of consumers to have the right to return a product). So if manufacturers are restricting any aspect of a product they have a strong incentive to inform and not disappoint consumers. The free market works, and if it doesn't there are always California attorneys.

8) pde (pde, (at) cs, mu, oz, au)

Are there terms under which such taxes [compulsory licensing or other schemes that tax devices and blank media and give the revenues to copyright holders] could be sound policy? Might the tradeoff between increased prices and unlimited access to digital works ever be in the interest of the consumer electronics industry?

Sure.. we agreed to the Audio Home Recording Act ten years ago (see answer 3). What I am concerned about is not the short term gain of entering a compromise, but rather the long term loss we can't envision. What technological developments are we unknowingly cutting off? Are we depriving whole classes of people from access to entertainment, information and education? Are we creating a future world where every piece of knowledge has to be paid for? Most people in this world do not have the access to culture, medicine, education and information that we have, so our decisions in this area do matter.

The Founders concept of a short term copyright which reverts quickly to the public domain has been so subverted that I think the choice is to dramatically reduce copyright terms to a few years and allow the pay per play the copyright owners want, or to leave the long copyright term and abandon efforts to restrict technology. Copyright owners want it both ways (and they have the right to be good lobbyists and they have succeeded). But it is not good for the free flow of knowledge and it is not good for our country or the world. The public policy pendulum on copyright issues must swing back to broad public access.

9) elvix:

How do you see CE manufacturers balancing their mandate to innovate for a new "active consumer" with the concerns of copyright holders?

CE makers are not philosophers, they are businesses. To stay in business they have to sell product and thus they have to be innovative and meet consumer expectations. As previous answers indicate, we have compromised and we will in the future. We stand by many principles (such as the value of time and place shifting), but it is difficult to resist short term fixes which have long term implications for future generations.

10) Anonymous:

You probably come into greater contact with our Congressional Reps than most of us. I typically get the feeling that with the possible exception of Rep. Boucher, no one on Capital Hill understands the consumer's rights issues that surround new technologies. (What's your impression?) Are the current organizations that work on these issues (EFF, publicknowledge.org, digitalconsumer.org, etc.) sufficient, or do we need to be doing something else to get the message to our reps? Should we just send more money/volunteer more time to the above orgs, or is there something more that can and should be done?

You are absolutely right that Congressman Boucher has a phenomenal understanding of these issues. Congressman Berman is also pretty smart on these issues, but his District is Hollywood and he is a good advocate for the content owners. Other members are increasingly aware on these issues, but the amount of money the content community generates for fundraising is huge and many members do not believe their constituents will vote for them based on their position on these issues (and to a certain extent they are right compared to their positions on abortion, gun control, war with Iraq, etc.). The groups you mention are making a huge difference in the debate and I urge you to work with them or any other consumer group (Consumers Union has been on these issues for 20 years!). I also urge you to contact legislators on your own and send out viral marketing type of emails to your friends urging them to do their own. We can get to a pro-consumer tipping point if enough real consumers actually do something.

 
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Related Links
· Gary Shapiro
· Consumer Electronics Association
· International Consumer Electronics Show
· Home Recording Rights Coalition
· C|Net News
· The New "Copyspeak"
· Interpreting Cary Sherman
· Ask Gary Shapiro, Consumer Electronics Assoc. Pres.
· More about Consumers
· News by Ernest Miller


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