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2/28/2002
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Anti-Copying Technology Regulation Isn't Welcomed By All

The recording industry sees government involvement as vital to protecting its interests, but high-tech vendors say that will thwart innovation.

The recording industry and the technology industry aren't seeing eye to eye on the need for the government to regulate the use of anti-copying technology in future products.

Large record labels, which have complained that free file-swapping services such as Napster Inc. have eroded profits, welcome new regulations, and Sens. Ernest Hollings, D-S.C., and Ted Stevens, R-Alaska, are spearheading such legislation. At a hearing Thursday by the Senate Committee on Commerce, Science, and Transportation, Hollings explained the need for a bill that would require high-tech and electronics manufacturers to incorporate technology that squelches the copying of digital and CD music to hard drives, CDs, or other media, thus preventing the unauthorized transfer of music.

"In an era when products are delivered digitally, the copyright laws mean less and less," Hollings said, insisting that strong technology protections are needed to enforce those laws. He's calling for a common open standard for digital-rights-management technology that would be required for hardware manufacturers to employ in their devices--the exact technology is still under discussion--and that will be enforced by the government. Manufacturers and companies responsible for the encryption technologies underlying copy control aren't too keen on the proposed bill. Any attempt to regulate high-tech product design "will substantially retard innovation, investment in new technologies, and will reduce the usefulness of our products to consumers," said Leslie L. Vadasz, executive VP at Intel, who also spoke at the hearing.

Robert Perry, VP of marketing at Mitsubishi Digital Electronics, agreed. "History teaches that if the Congress allows content industries to dictate the designs and uses of new products, the digital revolution will never reach its full potential."

Meanwhile, the recording industry laments the lack of regulation. At the Grammys on Wednesday, Recording Academy president Michael Greene complained that services such as Napster hurt record sales. Then again, Napster may be a convenient scapegoat. According to SoundScan figures, CD sales rose 5.6% last year from January through March 4, compared with the previous year. CD sales fell behind the previous year's figures after Napster started removing copyrighted material from its service.

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