Online Music Companies Outplayed - Page 4

Encryption Equals Control

For now, digital media companies are focused on licensing, but legal experts said a recent law protecting encrypted content provides yet another means for the record industry to control the market.

The Digital Millennium Copyright Act includes a section that makes it illegal to circumvent technological measures that control copying or accessing copyrighted material. In other words, once a song is encrypted, hacking the encryption is against the law.

The record and movie industries pushed for the provision, saying it was necessary to prevent tools that enable illegal copies of content from being widely disseminated.

Legal experts argued, however, that there are legitimate reasons for hacking the record companys protections, such as "fair use" rights for consumers to copy content for which they have already paid.

Moreover, critics said, encryption schemes enable entertainment companies to dictate business models to the rest of the industry. Entertainment companies can include usage rules as part of the encrypted content, or they can require other companies to support their preferred business model before they get access to the keys.

But in the computer industry, there is a tradition of reverse-engineering products in order to compete with them. For instance, Compaq reverse-engineered the BIOS — or basic input/output system — on the IBM PC to enable software written for IBM computers to also run on a Compaq PC.

The Digital Millennium Copyright Act provision has exemptions for reverse-engineering and encryption research, but many legal experts said theyre too narrow.

Last year, the movie industry won a court battle to protect its DVD protection scheme; the ruling said the owners of the Web site could not post or link to software that defeats the protections for DVDs. The ruling prompted an outcry from copyright lawyers and civil liberties advocates, who said the law violates the First Amendment and should be declared unconstitutional. The case is now being appealed.

While it hasnt yet proven popular, the recording industry, too, is selling encrypted content. And efforts like the Secure Digital Music Initiative are attempting to develop a secure framework for music distribution.

Cohen said hes sympathetic to the movie industrys position on DVDs.

"When DVD came out, you could buy high-quality movies for 20 bucks," he said. "Then someone says: Im striking a blow for freedom. Im cracking the protection scheme. In the last year and a half, weve gotten to the point that, because it can be done, its OK."