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Thursday, April 25, 2002
Using tax dollars to combat piracy

The Recording Industry Association of America is calling for additional federal funding to combat the ongoing wave of piracy, saying that the number of arrests and convictions for copyright crimes has skyrocketed over the course of a year.

In a congressional hearing Tuesday before a subcommittee of the House Appropriations Committee, the RIAA requested additional funds for federal anti-piracy law enforcement efforts and is pushing for a renewed agenda on protecting intellectual property. The RIAA, which did not request a specific amount, said the additional funds are needed for investigations and cases.

Specifically, the RIAA is requesting the funds be used to create additional squads or units for a program called Computer Hacking and Intellectual Property, which is part of the Justice Department's initiative to fight cybercrime. Although the RIAA applauded the creation of CHIP, it said it is concerned that CHIP's main focus will be on computer hacking and not on intellectual property. The RIAA requested in its testimony that these CHIP units make intellectual property a top priority.

"Piracy is not a private offense," Hilary Rosen, president of the RIAA, said in a statement. "It hurts everyone by diminishing the incentive to invest in the creation of music. It should not, therefore, be viewed as a crime only against authors, performers, composers, musicians, record companies, distributors, wholesalers and retailers, but against each of us."

The hearing comes against a backdrop of frustration over the ongoing problem of piracy within the music industry. The RIAA said the number of arrests and indictments for music piracy are up 113 percent from 2000 to 2001; meanwhile, guilty pleas and convictions were up 203 percent and sight seizures up 170 percent for that same period. The RIAA added that 2.8 million unauthorized CD-R (CD-recordable) discs were seized in 2001, compared to 1.6 million in 2000.

The RIAA also emphasized in the hearing that piracy levels have hurt the record industry financially. The RIAA said the sale of pirated recordings exceeds $4.2 billion worldwide, not including losses due to online piracy. The RIAA added that the music industry loses more than $1 billion per year from the illegal activities conducted in the world's four leading pirate marketplaces--Brazil, China, Russia and Mexico.

Piracy schemes go well beyond the record industry, permeating the software and film industry as well. Last week, in one of the most notable recent copyright-infringement actions, federal authorities arrested 27 people who were allegedly involved in a piracy ring involving Microsoft software.

In addition, the Motion Picture Association of America said it helped the New York police department shut down an alleged unlicensed DVD-copying operation based out of a Bronx apartment. U.S. law enforcement officials called the raid the first bust of its kind targeting DVD counterfeiting in the country. Moreover, a few weeks ago, a California resident pleaded guilty to copyright-infringement charges, involving more than 4,500 bootlegged videotapes.

Jack Valenti, president of the MPAA, also testified in Tuesday's hearing, calling on Congress to support enforcement of anti-piracy efforts. Valenti said that while the MPAA member companies are going forward with online video-on-demand initiatives, despite the low penetration of broadband access and the absence of a proven market, Congress should "send a clear message of deterrence that theft is theft, whether conducted online or off."

"If you can't protect what you own, you don't own anything," Valenti said in a statement.

The MPAA estimates that the film industry loses about $3 billion to non-Internet piracy per year. Much of that has come in the form of illegally copied videos, DVDs and video discs in Asia.

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