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Open Source advocates may find opposing Hollings bill makes for strange bedfellows

Financial analysts are already warning major stockholders that their investments in the electronics industry are going in the tank unless the Hollings bill is killed. Credit Lyonnais's Brad Beago suggested that the CBTPA "would be negative for the entire IT/telecom industry" and that the communications and networking hardware industry would be thrown "into disarray." Beago suggested that investors steer clear of the equipment and components sector until this "ominous bill" is killed for good.

Video outlets, especially those who sell used videos to supplement rentals, have read the fine print in the Hollings bill. They worry that the law would overturn what is called the First Sale Doctrine. Enshrined as Section 109 (a) of the U.S. copyright statute, it allows purchasers of copyrighted material to "dispose of" such property as they see fit, including renting it to third parties, and selling a used videocassette or DVD at their discretion. Rental agencies worry that the changes in property rights envisioned by the Hollings bill extend past restrictions on copying to restrict resale or redistribution rights of any type -- effectively putting them out of business.

Promoters of high definition video and interactive TV likewise see their investments at risk if high priced HDTVs are made obsolete by the bill. Independent cable outlets are already furious about what they see as an orchestrated attempt to force them to deploy copy restriction equipment and to take the legal hit, should that equipment fail or be circumvented.

As a result of these industry concerns, an array of lobbyists for the IT industry have been buttonholing congressmen, either directly or through sponsorship of a variety of "consumer" organizations. Industry execs and venture capitalists active in the IT and high-definition TV industries have joined together with Open Source activists to create Digital Consumer.org and transform it into a high-profile, consumer lobbying organization. DigitalConsumer claims to have sent more than 80,000 faxes to members of congress in recent weeks, all denouncing the CBDTPA and most promoting a consumer's "Bill of Rights." Other industry PR types have been busy placing op-ed pieces, such as one by Intel's Andy Grove, into prominent newspapers. For their part, Hollywood executives, led by Disney's Michael Eisner, are accusing Intel and the electronics industry of orchestrating consumer protests while profiting from software and content piracy.

One result of the war among industry leaders is that the Hollings bill is about to generate opposition from an unexpected source: conservatives. The upcoming issue of the National Review, one of America's most influential conservative publications, will take a chunk out of South Carolina's junior senator for supporting the CBTPA. Suggesting he's "a joke" who is beholden to anti-technology interests, the magazine mischievously suggests that Hollings has "betrayed" his Democratic Party and its de facto alliance with the high tech industry. Hollings once said that he would rather have BMW employing the citizens of South Carolina than Oracle or Microsoft. The Review suggests that his position on the Senate Commerce Committee means that he is "in a position to do real damage" to the economy in general and high tech in particular.

On the other end of the U.S. political spectrum, liberals are already setting up roadblocks to the Hollings bill. U.S. Senator Patrick Leahy (D-Vermont) has already said he would personally make sure that the Consumer Broadband and Digital Television Promotion Act wouldn't make it past his Judiciary Committee and onto the Senate floor. The Web site his Judiciary Committee set up to solicit comments has registered several thousand hits. According to spokeswoman Mimi Devlin, the committee has yet to receive any emails in favor of the Hollings bill.

Over in the U.S. House, leaders sympathetic to the bill are already ducking for cover. Freshman Congressman Adam B. Schiff (D-California) represents a district that consists of greater downtown Burbank -- home to Warner Brothers, Disney and NBC studios. He has circulated a "Dear Collegue" letter and claims to have widespread allies for his effort to introduce the CBDTPA on the House side. However, in public, most congressional leaders are looking for a compromise.

House Judiciary Chairman Charles Sensenbrenner (R-Wisconsin) is believed to be sympathetic, but he has broadly hinted that he wants to avoid a public fight, and wants to generate a "consensus" bill. Reportedly, he wants to introduce legislation that might meet some Hollywood concerns about distributing bootlegged digital movies over broadband, while at the same time, appeasing opponents by amending some of the more controversial provisions of the Digital Millennium Copyright Act. His colleague Billy Tauzin (R-Louisiana) is looking for a similar compromise. Tauzin suggested that because Sony was both a movie studio and an electronics manufacturer, he hoped it could provide him and his colleagues with objective advice on how to proceed.

Despite all the controversy, Hollings' home state has had little to say about the CBDTPA or the senator's activities on behalf of the entertainment industry.

The media outlets in Holling's home state are generally small, but they represent a wide range of opinion, from the funny and liberal-leaning Charleston Daily News to staunchly conservative publications such as The State or the Greenville News. However, none of these publications have had much to say about the Hollings bill, nor have Charleston Courier, or the Spartansburg Herald Journal. These papers are lively and opinionated, but the issue of digital rights has not made much of a blip on their collective radar. With the exception of a pungently written letter to The State, South Carolina's press have not touched the issue, or even treated it as news. As far as their readers are concerned, the Hollings bill has been a non-event.

While most IT companies are resisting congressional pressure, some have made it clear they would be open to creating an industry-led "standard" that would parallel many of the provisions of the Hollings bill. Congressmen, such as California's Howard Berman, are pressuring IT executives such as Cisco's John Chambers to "find a way" to cooperate with Hollywood and other content producers. Some of them appear to be open to the idea.

As a result, Open Source advocates fighting the Hollings bill may find themselves with some odd allies and opponents. One of the firms best positioned to develop precisely the type of hardware envisioned in the Hollings bill is IBM. The company has invested years of development work on its Electronic Media Management System. Despite the fact that IBM's marketing staffers have argued against a government-mandated hardware standard, they have voiced little objection to standards generated by an industry consortium.

One firm that might help lead the fight against the CBDTPA -- or any "industry led" standard -- could be Microsoft. Microsoft has been quietly promoting streaming media and peer-to-peer broadband networking, and both initiatives could be crippled by the CBDTPA or any hardware based anti-copying scheme. It is a shocking notion, given Microsoft's historical opposition to file sharing and its development of proprietary encryption and copy protection software. At least one news source has suggested that Microsoft technology is virtually written into the bill. However, my sources suggest that Microsoft is just as opposed to the Hollings bill as the rest of the IT industry, perhaps even more than most. So if the company lobbies hard against the Hollings Bill, Open Source advocates could find they they have a temporary ally that they may have trouble getting used to.