Statements on Introduced Bills and Joint Resolutions S692

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. WYDEN:

S. 692. A bill to require the Federal Trade Commission to issue rules regarding the disclosure of technological measures that restrict consumer flexibility to use and manipulate digital information and entertainment content; to the Committee on Commerce, Science, and Transportation.

Mr. WYDEN. Mr. President, today I am introducing the Digital Consumer Right To Know Act. The thrust of this bill is quite simple. Digital media companies are racing to develop technologies to combat piracy. Some of these anti-piracy measures could have the effect of restricting lawful, legitimate consumer uses as well as unlawful copying. My bill says that if digital content is released in a form that prevents or limits reasonable consumers uses, consumers have a right to be told in advance.

The shift from analog to digital technologies carries many potential benefits for all concerned—for technology companies, for producers of music, video, and other content, and above all, for consumers. Digital technologies, together with the rise of the Internet, promise to expand exponentially the possibilities for circulating, marketing, manipulating, and using creative works. There is so much more you can do, and so many fertile fields for innovation.

The shift to digital, however, also carries twin risks. The first, and the one on which Congress has focused most of its attention to date, is the risk of piracy. Digital technologies can greatly facilitate unlawful copying and distribution. This is a real problem, because people and companies that create copyrighted works must be fairly compensated. America's information-based economy depends on it.

The second, closely related risk is that, in combating piracy, the baby will get thrown out with the bathwater. In the name of anti-piracy protections, legitimate consumer uses could be stifled. Encryption or other "digital rights management", DRM, schemes could be employed that restrict consumers' ability to take full advantage of the potential of the new digital technologies. In the end, it's not inconceivable that digital media could be more restricted and less flexible than other copyrighted items—an ironic result for a technology that was supposed to represent a great step forward for consumers.

The bill I am introducing today focuses on this second risk. Significantly, it would not in any way dictate to content companies what types of copy protection or DRM schemes may or may not be used. Instead, it would ensure that consumers are fully informed of any impact on their ability to use and manipulate the content they buy.

Advance notice of technology-based use limitations is a matter of basic fairness. Consumers have developed a number of legitimate expectations concerning how they may use and manipulate content, and are likely to develop new expectations as technology develops. For example, consumers increasingly expect to be able to shift legally purchased content between different devices—to access it on their computers, or in their cars, or using portable devices like MP3 players. They should be told in advance if these expectations won't be met, so that they can factor this information into their purchasing decisions. Consumers should know what they are getting or not getting.

In addition, I believe that imposing this kind of notice requirement will help promote the development of solutions that strike an appropriate and acceptable balance between protecting against piracy and preserving utility and flexibility for consumers. Overly restrictive approaches would require disclosures that content providers could find embarrassing, and consumers could be alienated by measures that don't seem to respect the importance of user flexibility. In short, full disclosure would strengthen the market-based incentive to avoid technologies that are too restrictive of consumer flexibility.

My bill would also make a clear statement that Congress expects that there will be competition in the retail distribution of copyrighted digital content. This shouldn't be controversial: today, compact discs, books, and movie videos are distributed via many competing retail stores. They also often face competition with stores selling used content, and with rentals and libraries. But what if new DRM technologies permit copyright holders to limit or prevent the ability of unaffiliated entities to sell or distribute content on a secondhand basis? Could the copyright holder sharply reduce competition at the distribution level, and thus increase its market power? My legislation addresses this risk by expressing the sense of the Congress that it is important to retain competition among distribution channels for digital information and entertainment content.

As the debate over digital copyright issues continues, I intend to listen to all sides. This country needs balanced approaches that respect the interests of copyright holders and consumers alike. But the bill I introduce today is a significant step that Congress could take now that would protect consumers of digital content and promote market-based solutions, all without rewriting any copyright laws. I urge my colleagues to join me in this effort.

I ask unanimous consent that the text of the bill be printed in the RECORD.