LIBRARY OF CONGRESS
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                  DOCKET NO. RM 9907
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               Wednesday, May 3, 2000
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             The hearing in the above-entitled matter
 was held in Room 202, Adams Building, Library of
 Congress, 110 Second Street, S.E., Washington, D.C.,
 at 10:00 a.m.
      MARYBETH PETERS, Register of Copyrights
      DAVID CARSON, ESQ., General Counsel
      RACHEL GOSLINS, ESQ, Attorney Advisor
      CHARLOTTE DOUGLASS, ESQ., Principal Legal
      ROBERT KASUNIC, ESQ., Senior Attorney Advisor

                                                   PAGE 2

WITNESS     page no.

Cary Sherman, Recording Industry
Association of America                    4

Robert Hildeman
Streambox                                 12

Questions                                 16

Rodney Petersen, University of Maryland   51

Aline Soules, University of Michigan      63

Consortium of College and University
Media Centers:

Diana Vogelsong                           69

Jeff Clark                                72

Dan Hamby                                 80

Questions                                 81

                                                   PAGE 3
  1                  P-R-O-C-E-E-D-I-N-G-S
  2                                          (10:05 a.m.)
  3              MS. PETERS:  Good morning.  We come to
  4  our second day of hearings on the potential
  5  exception to the protection of access control
  6  technology.
  7              Yesterday I had a fairly lengthy
  8  introductory remark that is at the back for people
  9  who didn't get it.  It basically sets out the time
 10  table for what we're doing and the fact that we will
 11  be making the transcript available online as soon as
 12  we get it and, when the witnesses have had a chance
 13  to correct their statement, we will be putting
 14  substitute statements out.  The fact is that we are
 15  capturing this and hope to have it streamed on our
 16  website as soon as technologically possible.  That
 17  means as soon as the Library's technology people
 18  figure out how to ensure that we are able to do it.
 19              MR. CARSON:  Will you be encrypting
 20  that, Marybeth?
 21              MS. PETERS:  No, we are not encrypting
 22  that.  The access will be totally open.
 23              This morning we have two witnesses.  The
 24  first one will be Cary Sherman representing the
 25  Recording Industry Association of America.  The
 26  second one is Robert Hildeman representing

                                                   PAGE 4
  1  Streambox.  And so let's start with you, Cary.
  2              MR. SHERMAN:  Thank you very much.
  3              My name is Cary Sherman.  I'm Senior
  4  Executive Vice President and General Counsel of the
  5  Recording Industry Association of America.  I would
  6  like to thank the Copyright Office for giving me the
  7  chance to speak today and for your hard work in both
  8  helping to enact the Digital Millennium Copyright
  9  Act and in conducting this proceeding.
 10              As you know, RIAA is a trade association
 11  whose members are responsible for the creation of
 12  over 90 percent of the legitimate sound recordings
 13  sold in this country.  RIAA's members are very
 14  interested in the outcome of this proceeding as it
 15  becomes more and more clear that new digital
 16  technologies like the Internet will revolutionize
 17  the way recorded music is enjoyed by consumers.
 18              My prepared remarks today will be brief
 19  and will address two key points.  First, I will
 20  explain RIAA's support for the Joint Reply Comments
 21  filed by the 17 copyright owner groups.  Second, I
 22  will give a short description of the application of
 23  technological protection measures to the electronic
 24  distribution of recorded music, in particular
 25  focusing on the work of the Secure Digital Music
 26  Initiative, or SDMI, which was referenced in some of

                                                   PAGE 5
  1  the comments filed in this proceeding.  I would also
  2  be happy to answer any questions the Office might
  3  have about these issues.
  4              On the first point, RIAA joins the other
  5  copyright owner groups in urging the Office ad
  6  Librarian to allow the prohibition against
  7  circumvention of access controls to come into effect
  8  in October without any exemptions.  We think the
  9  question that the Librarian must answer in this
 10  proceeding is straightforward:  Is there evidence
 11  that the prohibition is likely to affect adversely
 12  non-infringing uses of any particular class of
 13  works?
 14              There's no question that Congress placed
 15  the burden of producing such evidence on the parties
 16  who seek an exemption.  It is also clear to us that
 17  Congress expected a claimed exemption to be
 18  supported by more than speculation, guesswork or
 19  vague predictions.  Indeed, legislative history
 20  clearly requires highly specific, strong and
 21  persuasive evidence to be produced.  That kind of
 22  evidence has not been produced for any class of
 23  works and certainly not for sound recordings.
 24              As explained in the Joint Comments, much
 25  of the commentary in this proceeding strays from the
 26  confines of this proceeding and asks the Librarian

                                                   PAGE 6
  1  to do things well beyond his authority, such as
  2  repeal provisions of the DMCA or overturn court
  3  rulings applying provisions of the DMCA other than
  4  those at issue here.  Even the comments that address
  5  the general question before the Librarian have taken
  6  liberty with and confused the scope of this
  7  proceeding.  For example, rather than propose
  8  particular classes of works that might be subject to
  9  an exemption, they instead offer general categories
 10  of users who could rely on an exemption for all
 11  types of works.
 12              Also, it has been argued that the
 13  Librarian should not consider the very benefits the
 14  DMCA was intended to bring about;  increased access
 15  to and availability of digital copyrighted works
 16  through the use of technological protection
 17  measures.  When the proper question is considered
 18  and the proper standard applied, an exemption is not
 19  warranted.
 20              This result should not be a surprise.
 21  The House Judiciary Committee specifically
 22  contemplated just that outcome and explained, and I
 23  quote, "such an outcome would reflect that the
 24  digital information market place is developing in
 25  the manner which is most likely to occur, with the
 26  availability of copyrighted materials for lawful

                                                   PAGE 7
  1  uses being enhanced, not diminished, by the
  2  implementation of technological measures and the
  3  establishment of carefully targeted legal
  4  prohibitions against acts of circumvention."
  5              This result is especially appropriate
  6  for sound recordings because there is no evidence of
  7  any adverse effect on access to recorded music.
  8              To the contrary, the market place is
  9  working to develop new ways to enjoy recorded music
 10  and increase access by consumers, which brings me to
 11  the second point of my remarks.  Some commenters
 12  mentioned SDMI as an example of something that might
 13  restrict access to copyrighted music.  Nothing is
 14  further from the truth.  Recording artists and
 15  record companies make their living by providing
 16  access to their copyrighted works in the broadest
 17  possible way. For example, right now consumers can
 18  enjoy their favorite music in a wide variety of
 19  ways, including from CDs, cassettes, radio air play,
 20  juke boxes, music videos, digital cable services
 21  and, more recently, through Internet-based sources
 22  like webcasting.
 23              The Internet and digital technologies
 24  are making significant changes in the music business
 25  but, unfortunately, not always in a good way.
 26  Access to pirated copies of popular music has

                                                   PAGE 8
  1  flourished on the Internet and, because of that,
  2  record companies have been reluctant to make
  3  available over the Internet legitimate downloads of
  4  the world's favorite music.  This lack of access to
  5  legitimate forms of new digital music is not the
  6  result of an excess of security measures or over-
  7  zealous enforcement of the DMCA.  Rather, it is the
  8  lack of widely supported security standards and the
  9  legal means to back them up that has created this
 10  situation.  And that is, in large measure, what
 11  prompted SDMI.
 12              What we are trying to do with SDMI is
 13  exactly what Congress envisioned in the DMCA:  a
 14  voluntary, multi-industry endeavor that has the
 15  ultimate goal of improving access to sound
 16  recordings for consumers.  SDMI is truly a ground-
 17  breaking effort.  Over 160 companies representing a
 18  broad spectrum of information technology and
 19  consumer electronics businesses, Internet service
 20  providers, security technology companies, and
 21  members of the world-wide recording industry have
 22  come together in SDMI to develop open technological
 23  standards for digital music distribution.
 24              SDMI is not an effort by record
 25  companies to lock up their music so that it will
 26  unavailable to consumers.  Such a broad array of

                                                   PAGE 9
  1  companies would not be participating if that were
  2  the case.  The reason there has been such widespread
  3  participation in SDMI is because they all see in
  4  SDMI the promise of increased availability of music
  5  in digital form.
  6              SDMI began its work by developing a
  7  specification for portable devices that record and
  8  play digital music, but its ultimate goal is much
  9  broader than that.  We hope it will eventually
 10  develop a framework for playing, storing and
 11  distributing secure digital music in many different
 12  ways and on many different devices.  This will
 13  enable the emergence of a new market that meets
 14  consumer demand for high quality digital music.
 15              One of the core principles of SDMI is
 16  that its standards are open and voluntary, and SDMI
 17  does not require the use of protection technology or
 18  exclude unprotected formats.  Copyright owners are
 19  free to distribute their music in an unprotected
 20  format if they so choose, and both protected and
 21  unprotected music will play on SDMI-compliant
 22  devices.
 23              I should note that although some
 24  commenters mentioned SDMI along with the DVD copy
 25  protection scheme known as CSS, the two are
 26  fundamentally different.  CSS is a specific security

                                                   PAGE 10
  1  technology, while SDMI is an organization to develop
  2  certain voluntary minimum security standards that
  3  may be implemented in any number of specific
  4  technologies or products.
  5              As further evidence that SDMI is all
  6  about improving the consumer experience, SDMI also
  7  seeks to provide consumers the access and uses to
  8  which they have become accustomed with traditional
  9  media.  For example, the SDMI Portable Device
 10  Specification permits a user to make an unlimited
 11  number of copies from an original CD for personal
 12  use on his or her PC, portable device or portable
 13  media.
 14              I must stress, however, that the point
 15  of SDMI is not simply to improve the access to music
 16  afforded by CDs.  Electronic music delivery will
 17  only succeed if it creates new business models and
 18  consumer experiences that are simply not possible
 19  today.  In other words, those who distribute music
 20  electronically need to be able to offer consumers
 21  entirely new ways to enjoy even more convenient
 22  access to music delivered in SDMI-compliant formats.
 23              One good example of such a completely
 24  new experience is a "try before you buy" program.
 25  This would give a consumer access to music for free
 26  for a limited time while the consumer decides

                                                   PAGE 11
  1  whether to purchase a permanent copy.  This new
  2  consumer experience is made possible by delivering a
  3  protected digital version of a recording.  What is
  4  important for this proceeding is that this business
  5  model would be impossible if the Librarian were to
  6  authorize consumers to hack SDMI-compliant security
  7  systems to keep promotional copies without paying
  8  for permanent retention.
  9              Another example of new opportunities
 10  possible with SDMI involves the huge back catalogs
 11  of music owned by many record companies.  These
 12  works can not be promoted and sold cost effectively
 13  through traditional retail channels.  Digital
 14  distribution, with no limits on shelf space or
 15  inventory and the ability to target niche markets,
 16  can unlock this music and give its fans access where
 17  none was possible before.  These are just the kinds
 18  of developments that Congress directed the Office to
 19  consider on the positive side of the equation in
 20  this proceeding.
 21              It must be stressed, however, that
 22  access only can be achieved if technological
 23  protections that respect the copyright in these
 24  works are available and effective.  Thus, Section
 25  1201(a) promotes new forms of access to digital
 26  music, and delaying its effectiveness would hamper

                                                   PAGE 12
  1  such access.  Indeed, press reports are issued
  2  almost daily announcing record company plans to
  3  begin electronic music distribution services.
  4  Nothing would have a greater chilling effect on
  5  those plans than a decision by the Librarian
  6  excluding sound recordings from the protection of
  7  Section 1201(a)(1).  No evidence for such an
  8  exemption has been produced, and no such exemption
  9  should be adopted.
 10              Again, thank you for the opportunity to
 11  appear before you today, and I welcome any questions
 12  you might have about RIAA's comments or my remarks.
 13              MS. PETERS:  Thank you.
 14              Mr. Hildeman.
 15              MR. HILDEMAN:  Thank you.  I want to
 16  thank the Copyright Office for this invitation.  My
 17  name is Bob Hildeman.  I'm the CEO of Streambox,
 18  Inc.  The purpose I'm here today is to discuss with
 19  this body several components.  One is Streambox
 20  fully supports adequate and effective copyright
 21  protection.  The second is that we want to see a
 22  balanced approach for fair use and also our ability
 23  as technology companies for reverse engineering.
 24              Streambox is an Internet and broadband
 25  technology company focused on developing the
 26  building blocks for Internet and broadband markets.

                                                   PAGE 13
  1  We are a technology enabler and an infrastructure
  2  builder.  Our technologies are open and flexible,
  3  and we work with real networks, Microsoft, Apple,
  4  MP3 and others, and is the leading
  5  media search technology for searching, indexing and
  6  categorizing streaming media content on the
  7  Internet.
  8              Streambox TV is a family of broadband
  9  technologies that contain consumer software and
 10  hardware devices, encoding and aggregation engine
 11  and digital delivery components.  Stream VCR the
 12  client side technology contained within Streambox TV
 13  contains streaming and recording technology that
 14  allows consumers to record live and on demand
 15  streaming content for later view.  Streambox VCR
 16  works just like a regular VCR that is used by
 17  hundreds of millions of consumers in the U.S.
 18              And again, I want to thank this office
 19  for hearing some of the comments that I have to
 20  provide.  As far as my testimony on rulemaking
 21  process for Section 201(a)(1) of the Digital
 22  Millennium Copyright Act, let me say at the outset
 23  that Streambox fully supports the desires of content
 24  owners to effectively protect their copyrighted
 25  material in the digital realm.  At the same time, we
 26  believe that it is very important that the

                                                   PAGE 14
  1  traditional copyright principles of first sale and
  2  fair use also survive in the digital realm.
  3              As part of the Section 1201(a)(1)
  4  rulemaking, the Copyright Office has a difficult
  5  task of maintaining the balance between the rights
  6  of content owners and consumers in the digital
  7  realm.
  8              The focus of the Copyright Office in its
  9  Section 1201(a)(1) rulemaking is clearly centered on
 10  the task, described by the House Commerce Committee
 11  Chairman Bliley, of "creating a mechanism that would
 12  ensure that libraries, universities and consumers
 13  would generally continue to be able to exercise fair
 14  use rights and other exceptions that have ensured
 15  access to copyrighted works."
 16              There is no doubt that the protection of
 17  fair use rights in the digital realm would be a
 18  benefit to content owners, consumers and companies
 19  such as Streambox.
 20              This brings me to the most important
 21  issue that I wish to stress to the Copyright Office.
 22  In its quest to satisfy the legitimate concerns of
 23  both content owners and users in its deliberations
 24  on Section 1201(a)(1), the Copyright Office must
 25  also protect the legitimate fair use rights of
 26  technological innovators and solutions providers.

                                                   PAGE 15
  1  In its commentary on fair use in the digital
  2  environment, the House Commerce Committee Report
  3  accompanying the DMCA astutely notes that:
  4              "Fair use is no less vital to American
  5  industries, which leads the world in technological
  6  innovation.  As more and more industries migrate to
  7  electronic commerce, fair use becomes critical to
  8  promoting a robust electronic marketplace."
  9              Specifically, what I am advocating is a
 10  point that has already been raised and several of
 11  the comments bear repeating.  Whatever the final
 12  Section 1201(a)(1)(A) rulemaking may or may not
 13  allow in terms of circumventing technological
 14  measures controlling access to copyrighted works, it
 15  is vitally important that the legitimate rights of
 16  companies to reverse engineering be protected.
 17  While there is a specific exception to Section
 18  1201(a)(1)(A) for reverse engineering contained in
 19  Section 1201(f), the Copyright Office will need to
 20  enhance this exception in the Section 1201(a)(1)(A)
 21  rulemaking in order not to adversely affect the non-
 22  infringing right of companies to reverse engineer
 23  copyrighted material to which access is prohibited.
 24              System interoperability is the driving
 25  force behind the continuing evolution and growth of
 26  the Internet industry, and the ability to innovate

                                                   PAGE 16
  1  is directly tied to the ability to reverse engineer.
  2  Companies must have access to other systems, and the
  3  law can not favor one system over another.
  4              Thank you.
  5              MS. PETERS:  Thank you.
  6              Now we get to start the questions.
  7  Robert, you get to start.
  8              MR. KASUNIC:  Thank you.  Good morning.
  9              My first questions are for Mr. Sherman.
 10  As you might have noticed, we received a few
 11  comments from DVD users throughout this proceeding.
 12  Some expressed concerns about the interoperability
 13  issues and the access and use controls involved with
 14  CSS encryption on DVDs containing, among other
 15  things, audiovisual works.
 16              I noticed on the RIAA's website that
 17  there is the intention of beginning to develop -- or
 18  you're in the development stage -- of implementing
 19  DVD audio and/or super audio CDs.  Will CSS
 20  encryption be used on audio DVDs?
 21              MR. SHERMAN:  Given what has happened
 22  with CSS, I would feel confident in saying no.  In
 23  fact, it was the very hack of CSS that caused a
 24  delay in introduction of DVD audio into the
 25  marketplace.  The music companies and the technology
 26  companies all came to the conclusion that they

                                                   PAGE 17
  1  needed to beef up the security system for this new
  2  format before it was released and, as a result, they
  3  have an example of a situation in which
  4  circumvention of a technological protection measure
  5  has actually impeded access to a wonderful new
  6  format that consumers are going to love.
  7              There will be something else.  Exactly
  8  what it is, I do not yet know.  It is being studied
  9  and tested, but there will be some form of
 10  protection in DVD audio and, I assume, in super
 11  audio CD as well.
 12              MR. KASUNIC:  Following that up, will
 13  those audio DVDs be something that will be
 14  compatible with currently sold DVD devices that are
 15  authorized to decrypt CSS?  Will those devices be
 16  able to play audio DVDs?
 17              MR. SHERMAN:  They will not be
 18  compatible, but that has nothing to do with the
 19  protection technology.  That has to do with the
 20  format of the DVD technology itself.  DVD video is
 21  one standard.  DVD audio is a completely different
 22  standard.  We expect that the devices that will be
 23  sold in the marketplace will be universal players
 24  that will play both DVD video and DVD audio, but the
 25  new DVD audio format will not play on existing DVD
 26  video players.

                                                   PAGE 18
  1              MR. KASUNIC:  So new devices will need
  2  to be purchased.
  3              MR. SHERMAN:  Right.  I should mention
  4  that there is the possibility of record companies
  5  releasing content that would be backward compatible
  6  because it's a fairly flexible format, and the sound
  7  version, the audio track of DVD video, could be used
  8  by record companies so that that same music would be
  9  available in DVD -- DVD audio might be playable on
 10  the DVD video if they used the same compression
 11  technology that is presently being used on DVD
 12  video.  That would not take full advantage, however,
 13  of the extraordinary improvement in sound quality
 14  that will be possible with DVD audio disks.
 15              MR. KASUNIC:  I read recently that Sony
 16  Music is beginning to offer digital music over the
 17  Internet that incorporates the SDMI technology.
 18  What specific access control technologies or
 19  measures are included with this distribution?
 20              MR. SHERMAN:  One really has to
 21  distinguish between SDMI standards and ordinary
 22  protection technologies that are available in the
 23  marketplace.  At this point, there is no SDMI
 24  standard for protected content.  There is no
 25  specific standard with regard to what makes content
 26  SDMI-compliant.  Therefore, the only thing that

                                                   PAGE 19
  1  would be relevant in terms of SDMI to the content
  2  being provided by Sony is that at some point in the
  3  future a Watermark would be incorporated in that
  4  content.  That is not something that is to happen
  5  now.  That is something that is to happen only later
  6  when certain Phase 2 technology becomes available
  7  and is ready for implementation and, at that point,
  8  Watermarks will be incorporated in the content.
  9              Therefore, what Sony is doing now is
 10  simply providing its music in some kind of protected
 11  format that would be compatible generally with the
 12  SDMI system of protection.  That will include things
 13  like encryption, it will include digital rights
 14  management systems and so on and so forth, but these
 15  are just technological protection measures that are
 16  available in the marketplace.  They're not SDMI-
 17  specific.
 18              MR. KASUNIC:  So SDMI is a group of
 19  different organizations that compose this initiative
 20  and that initiative involves a number of different
 21  technologies.  Can you be any more specific about
 22  what the specific access control technologies are
 23  that will be used?  There'll be encryption and --
 24              MR. SHERMAN:  Well, this is not SDMI
 25  now, but most of the delivery systems that are being
 26  contemplated involve some form of encryption and

                                                   PAGE 20
  1  some form of digital rights management system.
  2  There are also decisions to be made about which code
  3  to use.  That is, a compression, decompression,
  4  algorithm, that is the mechanism by which a very
  5  high, very large file is reduced to a very small
  6  file so that it can be transmitted quickly over the
  7  Internet and other mechanisms.  And then there are
  8  decisions about file formats, as well.  So there are
  9  lots of different factors that go into a delivery
 10  system.  But the protection elements are largely
 11  encryption and digital rights management.
 12              The digital rights management component
 13  is what enables entirely new types of business
 14  transactions between content providers and users.
 15  One could sell, for example, the right just to
 16  listen to a song rather than the way we do it now,
 17  which is to sell a copy.  Right now we have a very
 18  limited form of making music available to consumers.
 19  We basically either sell it to them on a disk that
 20  they keep forever, or they don't get it other than
 21  radio and things like that.  And that's really a
 22  very limited business model when you think about it.
 23              With digital rights management, you
 24  would be able to sell a single listen or a week of
 25  listens or a month of listens or a rental thing
 26  where, after a certain point, you can buy it for a

                                                   PAGE 21
  1  small additional price.  You could do "try before
  2  you buy" where you'd be able to listen to something
  3  for a day or so and then it would time out, and then
  4  you could decide whether you want to buy it.  You
  5  have the possibility of super distribution where you
  6  can email things to a friend and a friend can decide
  7  whether he's interested in it and wants to buy it as
  8  well.
  9              You can have subscription models where
 10  you can have all the music that you can consume but
 11  for a certain period of time, at the end of which
 12  that subscription can either go on or end.  All
 13  those would be new ways of allowing consumers to
 14  tailor their particular interest in the particular
 15  business transaction for how that music gets
 16  consumed. And digital rights management systems are
 17  very flexible ways of implementing those business
 18  models, and that's why they'll be a key element in
 19  electronic delivery systems in the future.
 20              MR. KASUNIC:  Can you just briefly
 21  explain what the difference is between -- you had
 22  mentioned Phase 2 technology.  What is Phase 1
 23  technology and what is Phase 2?
 24              MR. SHERMAN:  Okay.  As part of the
 25  effort to arrive at a system that would enable the
 26  variety of new portable devices coming to market to

                                                   PAGE 22
  1  be able to obtain SDMI-compliant music, that is
  2  music that is going to be compatible with SDMI-
  3  compliant systems, the idea was to come up with a
  4  mechanism by which pirated versions of music could
  5  be filtered out.  The underlying concept here was
  6  that personal use of music would be okay.  If you
  7  want to rip your CD to a hard drive and then load it
  8  from the hard drive to a portable device or to
  9  multiple portable devices for your own use, that
 10  would all be fine.  But to rip it to your hard drive
 11  and then distribute it on the Internet to your
 12  million best friends for free and become a worldwide
 13  publisher, that was not okay.
 14              And the idea was to find a way to
 15  distinguish between the legitimate personal uses
 16  versus the illicit Internet distribution.  The
 17  mechanism that is being used for that is a screen
 18  technology that will filter out pirated content. And
 19  I won't bother going into how that might be done,
 20  but there are mechanisms for identifying that which
 21  was distributed on the Internet without
 22  authorization.  That technology is now being
 23  developed.  There's a call for proposals out.
 24  Preliminary responses have been received and further
 25  evaluation will be done through the next several
 26  months and a technology will be selected.

                                                   PAGE 23
  1              Once that screen technology is available
  2  for implementation, that is the Phase 2 technology
  3  and, in order to be SDMI-compliant, a portable
  4  device will have to incorporate that technology so
  5  as to filter out pirated music that is distributed
  6  illicitly.
  7              We are presently in Phase 1, and Phase 1
  8  simply requires portable device manufacturers to
  9  incorporate a technology to look for a signal that
 10  the Phase 2 technology is now available.  That's a
 11  Watermark Reader, and when the Watermark is included
 12  in content in the future saying Phase 2 technology
 13  is now available, it will basically encourage
 14  consumers to upgrade to the Phase 2 technology
 15  because content that's marked with that Watermark
 16  will not play in the new generation of -- will only
 17  play in the new generation of devices.  It won't
 18  play in the old generation of devices.
 19              So the idea is that you could buy
 20  portable devices now.  You can use them to listen to
 21  anything and everything and then you will be
 22  encouraged to upgrade the software that accompanies
 23  the new portable device so that you will get all the
 24  benefits of the new music that's distributed that is
 25  compatible with SDMI but that will filter out
 26  pirated content.  That's the Phase 2 that's in

                                                   PAGE 24
  1  development right now.
  2              I apologize for the complexity of this,
  3  but it is complex.
  4              MR. KASUNIC:  Just one last question for
  5  Mr. Hildeman.  How has fair use been adversely
  6  affected or is it likely to be adversely affected by
  7  access control measures?
  8              MR. HILDEMAN:  Probably a number of
  9  ways.  One, if it's freely available on the
 10  Internet, I think that devices would view or record
 11  should have some compatibility or interoperability.
 12  I think that in order to fair use that content, the
 13  technology companies need to first publish what it
 14  is that their protection mechanism may be.  In many
 15  cases, as technology companies, we do not know
 16  another company's technological measure.  So again,
 17  access will be critical that systems will be
 18  published or systems will be acknowledged that it is
 19  in existence.
 20              MS. PETERS:  Thank you.  Before I turn
 21  to Charlotte, I wanted to follow up with a question
 22  to you, Cary.  When you were talking about the
 23  delivery mechanisms and you were talking about that
 24  there would be some encryption and some rights
 25  management schemes, I wanted to go to libraries.  We
 26  heard yesterday that libraries are kind of like

                                                   PAGE 25
  1  where people go when they can't afford to buy.  It's
  2  the alternate method of getting material, so it's
  3  critical to access information.  In your delivery
  4  mechanisms that have some encryption and some rights
  5  management, what's going to be the model for sale or
  6  delivery to libraries for the use of library
  7  patrons?
  8              MR. SHERMAN:  I don't know.  I mean this
  9  is the marketplace at work.  The companies are just
 10  beginning to come online with their digital
 11  delivery.  It's a very, very complicated thing to
 12  do.  There are patent issues associated with all
 13  these as well as with whom you're going to be the
 14  technology partner, what kind of portable devices
 15  will the music play in.  I mean these are very, very
 16  complex issues.  The licensing issues are complex.
 17  So it's taken a long time.
 18              Now that they are finally coming online,
 19  the question is, how is the marketplace going to
 20  respond?  I think that we're going to see a period
 21  of pricing experimentation where you're going to see
 22  lots of different pricing approaches to see what
 23  consumers want.  You're going to see the added value
 24  of lyrics and album art and photographs and other
 25  graphics and audio/video material that will
 26  accompany some of the content to see what kind of

                                                   PAGE 26
  1  change that makes in consumer response.
  2              So I think we're in a period of
  3  experimentation, and there are many different
  4  marketplaces that one might be appealing to, the
  5  library community being only one of them.  I think
  6  it will be a while before this becomes a routine
  7  mechanism by which libraries obtain their content.
  8  The CD world is going to be with us for a very long
  9  time to come.  There are some 600 million CD players
 10  around the world, and the worldwide industry is not
 11  about to stop serving that marketplace.
 12              So I think that libraries will probably
 13  continue to get most of their content in the old-
 14  fashioned way, and it will be a little while before
 15  the system is up and running sufficiently where
 16  libraries will want to get into the digital
 17  distribution system itself.
 18              MS. PETERS:  Is your estimate that
 19  within the next three years that the traditional
 20  marketplace will be the dominant form for libraries?
 21  In other words, that they will be purchasing CDs
 22  which they can then lend and make available to
 23  patrons under the conditions that they do today?
 24              MR. SHERMAN:  At the very least, the
 25  next year.  I would say for the next decade minimum,
 26  maybe two decades.  I think CDs are going to be with

                                                   PAGE 27
  1  us for a very long time to come, and the gradual
  2  introduction of digital delivery mechanisms is
  3  really very, very slow upward.
  4              MS. PETERS:  Okay.  Thank you.
  5              Charlotte.
  6              MS. DOUGLASS:  Thank you.
  7              Cary, I understand your comment to say
  8  that you don't believe that there's been any adverse
  9  effect with respect to technological measures on
 10  sound recordings.  Congress asked us to, however,
 11  specify particular classes of works.  Do you think
 12  that if there were any effect, adverse effect, the
 13  category should be sound recordings, or should it be
 14  something narrower, or should it be sound recordings
 15  combined with anything else?
 16              MR. SHERMAN:  I really don't have an
 17  answer to that question because I regard the fact
 18  that Congress didn't provide too much guidance on
 19  this as an opportunity be innovative in how you
 20  respond to the problem.  Certainly, the category
 21  should be no broader than something like sound
 22  recordings.  But if one is able to find that there's
 23  a particular problem in a particular genre or a
 24  particular type of sound recording, that might be an
 25  appropriate response, and I think that the Copyright
 26  Office should retain the discretion to figure out

                                                   PAGE 28
  1  how best to respond to the need.
  2              The idea here is to effect an
  3  appropriate balance and, until you know what the
  4  particular facts are that you're worried about, you
  5  shouldn't hem yourselves in with an interpretation
  6  about how you have to define those categories.  I
  7  would leave it open as much as you can.
  8              MS. DOUGLASS:  Thank you.
  9              Mr. Hildeman, do you believe that sound
 10  recordings, if there were an adverse effect, would
 11  be an appropriate category, or should there be
 12  something else?
 13              MR. HILDEMAN:  I think it probably
 14  should be much broader.  I think when a person looks
 15  at that issue, it should be addressed with probably
 16  three components:  content owners, copyright
 17  protection, one; second, as a consumer to fair use;
 18  and third, the solution provider like us as
 19  technology innovators.  So as such, I think that
 20  looking at all three, the technology innovator needs
 21  full access to all the content where I think by
 22  providing better solutions, the consumers benefit
 23  greatly.  In that sense, there's a fair use issue.
 24              MS. DOUGLASS:  So you think that sound
 25  recordings as a broad class is okay?
 26              MR. HILDEMAN:  Yes.

                                                   PAGE 29
  1              MS. DOUGLASS:  Another question I have
  2  is that Congress asked us to consider not just the
  3  adverse effects of using technological measures but
  4  also positive effects of using technological
  5  measures.  For example, availability of works or
  6  enhancing lawful use.  How should that be calibrated
  7  in trying to determine overall whether there is any
  8  particular class of works which there has been an
  9  adverse effect?  In other words, how do we factor in
 10  or account for or work with the positive effects
 11  from technological uses?
 12              MR. SHERMAN:  In the case of sound
 13  recordings, I've sort of addressed that in my
 14  previous comments about the multiple new business
 15  models that will be enabled and, therefore, looking
 16  at those business models and whether consumers will
 17  actually be using them to gain access would be
 18  something to be weighed into the balance, just like
 19  the availability of a new format like DVD audio,
 20  because of the availability of some technological
 21  protection measure, should be weighed in the
 22  balance.
 23              How you do it with respect to other
 24  classes of works I think would depend upon the
 25  particular category of work.  When you think about
 26  scientific journals, for example, the fact that they

                                                   PAGE 30
  1  are available now -- I mean I have a basement filled
  2  with scientific journals because my wife is a
  3  scientist and we have years of these bound volumes
  4  of things that she never goes down to look for
  5  because there would only be one article every three
  6  issues or so that she had any interest in, but she
  7  had to subscribe to a year's worth of journals.
  8  Well, she doesn't subscribe any more because she has
  9  database access to get just the article that she
 10  needs.
 11              I think that that kind of capability is
 12  one of the great things that technological
 13  protection measures are enabling, and that would
 14  need to be weighed in the balance.  But that would
 15  be a little different kind of analysis than would be
 16  the case for sound recordings.
 17              MS. DOUGLASS:  Do you have a comment,
 18  Mr. Hildeman?
 19              MR. HILDEMAN:  Again, I guess going back
 20  to the needs of all three parties:  copyright
 21  owners, the technology innovators, and consumers.
 22  When we look at a file format, when we look at
 23  technological solution, we're looking at essentially
 24  one solution that contains -- it may be a
 25  copyrighted work.  So it's difficult from our
 26  perspective to separate the two out, that when you

                                                   PAGE 31
  1  look at technological measure, that that
  2  technological measure is a container for copyrighted
  3  work to be digitally delivered.
  4              So to look at a class of work in just
  5  recording, I think it's a good place to start, but
  6  it needs to be broadened.
  7              MS. DOUGLASS:  Thank you.
  8              MS. PETERS:  Anything else?
  9              MS. DOUGLASS:  No.
 10              MS. PETERS:  Rachel.
 11              MS. GOSLINS:  Mr. Hildeman, in your
 12  testimony you are concerned with the ability of
 13  technology companies to reverse engineer in order
 14  for interoperability.  You note that there is
 15  already an exception in Section 1201 for reverse
 16  engineering but say that we need to enhance that.
 17  I'm just curious.  In what way should we enhance it
 18  and how is the existing exemption deficient?
 19              MR. HILDEMAN:  Section 1201(f)
 20  physically addresses that in order for me to reverse
 21  engineer a product, I must gain access to that
 22  product legitimately.  As you know, many times
 23  there's issues involved where companies do not share
 24  proprietary information.  In our case, I think that
 25  innovations come about because we're able to figure
 26  out how that system works independently.  So I think

                                                   PAGE 32
  1  in that sense it needs to be broadened.
  2  Essentially, the 1201(f) states almost that you need
  3  to be licensed to reverse engineer, and I think it
  4  needs to be broadened since they should be open.
  5              MS. GOSLINS:  All right.  I just want to
  6  follow up on that a little bit so I'm sure I
  7  understand what you're saying.  Subsection (f)
  8  requires that the person has lawfully obtained the
  9  right to use a copy of the computer program.  And so
 10  your assertion is that somebody who has not lawfully
 11  obtained the right to use a computer program should
 12  also be allowed to reverse engineer it?  Is that
 13  what you want us to do with the rulemaking?
 14              MR. HILDEMAN:  Yes.  Again, proprietary
 15  secrets are not exchanged so, therefore, in order to
 16  figure out how that system may work is that, you
 17  know, it comes down to innovations of that engineer
 18  as to how that --
 19              MS. GOSLINS:  I'm not a computer expert
 20  at all, but is what's necessary to reverse engineer
 21  an exchange of proprietary information or only that
 22  you have access to a copy that you can then --
 23              MR. HILDEMAN:  The question that comes
 24  about is if I were to take a product or if I was to
 25  develop a product that was compatible with another
 26  existing product and that compatibility came about

                                                   PAGE 33
  1  becAUse my innovation or our innovation.  According
  2  to 1201(f), what is the standard that would be
  3  measured whether my product is legitimate or
  4  illegitimate.  I think that's the issue.  If I
  5  haven't gone through the steps of gaining a proper
  6  license for that, does that make my product
  7  illegitimate?
  8              MS. GOSLINS:  Are you talking about
  9  gaining a license to reverse engineer or a license
 10  to have a copy of the work?
 11              MR. HILDEMAN:  I'm saying whenever you
 12  buy a product, essentially there's end user license.
 13  But many times companies do not buy a product.  They
 14  essentially figure out a system because of the tools
 15  that's available so, therefore, you do not have --
 16  it's not a licensed product.  So according to DMCA,
 17  would that make my product illegitimate because I
 18  innovate it without getting a license.
 19              MS. GOSLINS:  I'm sorry.  I'm just going
 20  to ask one more question.  I'm just still a little
 21  confused.
 22              MR. HILDEMAN:  Sure.
 23              MS. GOSLINS:  Is your concern that if
 24  you did not have a license to reverse engineer that
 25  your product, the product you ultimately arrived at,
 26  would be illegitimate or that if you did not have a

                                                   PAGE 34
  1  license to actually just open the computer program?
  2              MR. HILDEMAN:  I think it's the first.
  3  My concern would be that I should not have to
  4  license a product to reverse engineer a product for
  5  the fact I think innovation many times that you
  6  understand the compatible systems so, therefore, you
  7  tend to or you do come about with solutions that
  8  would be compatible.
  9              MS. GOSLINS:  Mr. Sherman, I have a
 10  couple of questions for you.  As you may have noted
 11  reading through the comments, many commentators have
 12  actually pointed to the recording industry as an
 13  example of why criminalizing access control
 14  protections are not necessary and specifically they
 15  point to the availability of CDs, which is a high
 16  quality form of digital music which have been around
 17  for many years without any demonstrative negative
 18  impact on the recording industry and without any
 19  access control protections.  I'm just curious as to
 20  how you would respond to that argument.
 21              MR. SHERMAN:  That argument may have
 22  been true five years ago, but it ain't true today.
 23  The fact is that CDs have become the source for an
 24  entire generation of kids who think that they're in
 25  the publishing business and that it's okay for them
 26  to publish somebody else's work for free worldwide.

                                                   PAGE 35
  1  CDs are the source.
  2              In SDMI when we ask for help in creating
  3  technological measures that will expand the market
  4  for everyone, the response is, well, you've got to
  5  stop selling CDs.  Why put in technical measures if
  6  somebody can get the same thing on a CD?  Well,
  7  they're right.  We should just stop selling CDs, but
  8  that's not going to happen.  It's not the
  9  marketplace at work and, in fact, it's a very good
 10  illustration of why the marketplace really does
 11  control and why the notion that technical measures
 12  are going to be used to lock up works is really
 13  mistaken.
 14              Record companies are making available
 15  works, even though they know that that continues to
 16  be the source of the piracy problem on the Internet
 17  because they are in the business of making the works
 18  available to the public.  They don't benefit from
 19  creating something wonderful and then not allowing
 20  people to gain access to it.  So they continue to
 21  sell CDs, notwithstanding the impact on the piracy.
 22              But there's no question but that the
 23  piracy will have a devastating long-term impact on
 24  this industry if it's not reigned in at some point.
 25  We think that we've done a great job in terms of
 26  beginning to do that, but new technologies keep

                                                   PAGE 36
  1  arising that make the problem greater once again.
  2  This will be a continuing challenge.  It's not going
  3  to be responded to by laws.  It's not going to be
  4  responded to just by technical protection measures.
  5  It's going to be responded to in the marketplace
  6  with legitimate businesses that are somehow going to
  7  attract consumers towards the convenience and
  8  greater value of participating in the legitimate
  9  marketplace rather than in the illegal one.  But I
 10  hardly regard CDs as a model for the fact that we
 11  continue to sell CDs indicating that there shouldn't
 12  be criminal liability for circumvention.
 13              MS. GOSLINS:  Maybe you could just help
 14  me with a chronological matter.  When did recordable
 15  CDs and CD burners become widely available in the
 16  marketplace?
 17              MR. SHERMAN:  Well, they became
 18  available a number of years ago, but they were very,
 19  very expensive and their performance was uneven.
 20  They've become more of a mass market phenomenon over
 21  the past two to three years, and they are increasing
 22  by leaps and bounds every year.
 23              MS. GOSLINS:  And I just have one final
 24  question about the kind of technologies concerned or
 25  involved in the SDMI.  Yesterday, we heard from some
 26  commentators who distinguished between first level

                                                   PAGE 37
  1  access control protections, which just controlled
  2  access to the content but wasn't actually embedded
  3  in the content itself and so, once you had access to
  4  the content, then you had to have a copy control or
  5  use restriction in place if you wanted to control
  6  that, and what they called second level access
  7  protections, which is an initial level of access
  8  control and then a second level that actually
  9  remained with the content and so, even if you
 10  downloaded it or made a fair use copy of it, the
 11  embedded commands would still require
 12  reauthorization every time you tried to open that
 13  up.
 14              You've talked about a couple of
 15  different kinds of technologies, the Watermark
 16  technology, the digital rights management systems,
 17  and I'm just curious.  Do those all involve an
 18  element of the second level access protection?  I
 19  was hearing you say that, but I just wanted to make
 20  sure that I was correct.
 21              MR. SHERMAN:  For the most part, yes.
 22  They are designed essentially to protect rights
 23  against copying that isn't authorized or rights
 24  against copying in numbers that aren't authorized.
 25  I mean one of the beauties of these things is you
 26  can sell a copy that has unlimited copying

                                                   PAGE 38
  1  capability or you're allowed to make 10 copies or
  2  you're allowed to make five copies, you're allowed
  3  to make two copies or no copies.  That could then be
  4  reflected in the price that you pay for the product.
  5              So there will be some element where
  6  digital rights management systems enable that kind
  7  of business model flexibility, and that would be a
  8  copyright right rather than just access.
  9              MS. GOSLINS:  Thank you.
 10              MR. CARSON:  Mr. Hildeman, I think I
 11  understand that you would like us to create some
 12  form of exemption to the anti-circumvention
 13  provision.  Is that correct?
 14              MR. HILDEMAN:  I think the provisions
 15  should be expanded on.
 16              MR. CARSON:  I'm sorry.  You think what
 17  should be expanded?
 18              MR. HILDEMAN:  Provisions should be
 19  expanded.
 20              MR. CARSON:  Are you saying you think
 21  Congress should expand it, or do you think we should
 22  expand it?
 23              MR. HILDEMAN:  I think we should look at
 24  ways to expand on that.  I think it should include
 25  additional language for reverse engineering.  I
 26  think the reverse engineering portion is too

                                                   PAGE 39
  1  limiting.  It's too general right now.
  2              MR. CARSON:  Okay.  Let's first make
  3  sure we have a common understanding of what the
  4  mission of this particular rulemaking proceeding is
  5  and then figure out whether there's something we can
  6  do for you.  Section 1201(a)(1), which is all we're
  7  really concerned with, is all we have a mandate to
  8  do anything with, says that we are to make a
  9  recommendation to the Librarian, who will then
 10  determine whether there are any classes of works,
 11  particular classes of works with respect to which
 12  persons will be adversely affected by virtue of the
 13  prohibition on circumvention of access control
 14  devices and their ability to make non-infringing
 15  uses.
 16              We don't have the ability to expand any
 17  of the statutory language you see.  We have a
 18  specific mandate to find out whether there are
 19  particular classes of works with respect to which
 20  people are adversely affected.
 21              So I guess my question is, in the
 22  context of what we are being told by Congress we
 23  must do, what are you asking us to do, if anything?
 24              MR. HILDEMAN:  I think I'm here to share
 25  with you market information from technology's point
 26  of view.  I'm not sure what needs done to correct

                                                   PAGE 40
  1  the language of the law.  I think that's for the
  2  body to figure out.  I think I'm here to share with
  3  you from technology point of view that there needs
  4  to be a balanced approach, right now that the laws
  5  are not balanced.
  6              MR. CARSON:  Then I think I understand
  7  but I just want to make sure I'm clear.  You're not
  8  asking us to find any particular class of works that
  9  is to be exempted from the provision.  Is that
 10  correct?
 11              MR. HILDEMAN:  That's right.
 12              MR. CARSON:  Okay.  Mr. Sherman,
 13  yesterday we heard from Professor Jaszi who had a
 14  proposal I just want to run by you and get your
 15  reaction to.  He suggested that we exempt from the
 16  operation of Section 1201(a)(1) works embodied in
 17  copies which have been lawfully acquired by users
 18  who subsequently seek to make non-infringing uses
 19  thereof.  Do you follow the proposition?
 20              MR. SHERMAN:  If you could repeat it
 21  once.
 22              MR. CARSON:  Sure.  Exempt works
 23  embodied in copies which have been lawfully acquired
 24  by users who subsequently seek to make non-
 25  infringing uses thereof.  If you want Rachel to put
 26  it in front of you, she's got a copy of his

                                                   PAGE 41
  1  testimony.  If you want to take a moment to reflect
  2  on it, I'd just like to get your reaction to that.
  3              MR. SHERMAN:  I guess my initial
  4  reaction is that would sure be a far cry from the
  5  particular classes of works that I think Congress
  6  had in mind in the enactment of Section 1201 and the
  7  mandate for this proceeding where the idea was to
  8  look at particular situations where there were
  9  adverse effects that were clearly going to be
 10  incurred and could be clearly demonstrated.  This
 11  would include any kind of work, just because it had
 12  to be embodied in a copy which has been lawfully
 13  acquired by users.  That's every work.
 14              I'm also wondering what would be the
 15  basis for demonstrating that there was really good
 16  cause to believe that there was going to be an
 17  adverse effect on those non-infringing uses.  Take,
 18  for example, sound recordings.  If somebody were to
 19  download a protected file of music that didn't
 20  enable that person to make copies -- which, by the
 21  way, is not a foregone conclusion at all because
 22  SDMI and our member companies have been extremely
 23  focused on consumer expectations and what consumers
 24  want to do with their music.  SDMI specifically
 25  allows the making of an unlimited number of copies
 26  from an original disk.  We can't assume that there

                                                   PAGE 42
  1  would be any inhibition.
  2              But assume that there was.  Assume that
  3  a particular downloaded file could not be copied.
  4  What about the fact that that same thing is
  5  available at the corner store in CD form?  Does this
  6  mean that there would be now a circumvention right
  7  with respect to the downloaded copy when the person
  8  could have gone to the corner store and gotten an
  9  unprotected copy from which fair use would be able
 10  to be exercised?  What about the fact that you might
 11  just ask permission?  I want to make a fair use.
 12  I'm writing a review.  I'm doing a multimedia
 13  project.  What about asking?
 14              I mean all of those things seem to be
 15  prerequisites before finding that there is such a
 16  certainty that there's going to be an adverse effect
 17  that we should exempt the application of the anti-
 18  circumvention rule to all works.  So I guess I come
 19  to the conclusion that this is over-broad,
 20  premature, and probably not supported by the
 21  evidence.
 22              MR. CARSON:  To be fair, of course,
 23  you've just read an excerpt and you might want to
 24  take a look at the rest of his testimony and, if
 25  appropriate, you can comment later.  But I gather
 26  your first impression is not necessarily favorable.

                                                   PAGE 43
  1              We received comments from the Public
  2  Broadcasting System I'd like to get your reaction
  3  to.  They point out that under Section 114(b) of
  4  Title 17 the reproduction, distribution and
  5  derivative work rights in Section 106 do not apply
  6  to sound recordings included in educational
  7  television and radio programs, and they express a
  8  concern, and I think that's probably as far as it
  9  goes, but a concern at the very least that their
 10  ability to make non-infringing uses of published
 11  non-dramatic musical works, which they say depends
 12  in part on access to sound recordings, that might be
 13  endangered by technological protection devices.
 14              What can you tell them to allay their
 15  fears and what can you tell us to deter us from
 16  deciding that there's anything we need to do in the
 17  context of this rulemaking?
 18              MR. SHERMAN:  CDs in unprotected form
 19  are going to be available for a very long time to
 20  come and, therefore, the traditional mechanism by
 21  which they've gained that kind of access is going to
 22  continue.  Furthermore, record companies are in the
 23  business of promoting their works in every work
 24  possible.  That includes on public broadcasting as
 25  well as commercial radio.  Record companies have
 26  been accused of being too generous in terms of

                                                   PAGE 44
  1  providing their music to radio stations and the
  2  like, and there doesn't seem to be any cause for
  3  anybody to be alarmed that this commercial
  4  imperative is going to change just because
  5  technology enables protection measures to exist.
  6              MS. PETERS:  I just want to follow up on
  7  one of the questions that David had which had to do
  8  with Peter Jaszi's proposal and your answer that CDs
  9  are available maybe at the corner store and they're
 10  going to be available for a long time.  In the DVD
 11  context, what we heard is that that's not an answer
 12  with regard to videos and getting videotapes because
 13  the DVD always has more stuff.  It's got out-takes,
 14  it's got multiple languages.
 15              With regard to the product that's going
 16  to be delivered with regard to sound recordings, if
 17  there's a distinction between the product and only
 18  the encrypted product has the extra stuff, what
 19  would your response be?  In other words, it's not
 20  the equivalent product that you can go out and buy
 21  on the market.  There's more in the access
 22  controlled product.
 23              MR. SHERMAN:  I'm sort of mystified by
 24  the proposition.  It seems to start from the
 25  proposition that the Salinger case was all wrong,
 26  that if you write a letter, that it's got to be

                                                   PAGE 45
  1  available to the world because you wrote it and,
  2  therefore, there's an obligation to libraries and
  3  anybody else to have access to it and to be able to
  4  use it for all the beneficent purposes that are
  5  somehow embodied in fair use doctrine and the like.
  6              I don't see it that way.  I mean it
  7  seems to me that there's a balancing between the
  8  right of the copyright owner to create something
  9  that's never published or that's published with
 10  restrictions versus the right of the public to use
 11  that which the public acquires.  And just because
 12  additional content is made available because the
 13  medium allows for it doesn't mean that there should
 14  be a concomitant obligation to never impose
 15  restrictions on that.  So I just don't buy into the
 16  fundamental underpinning of the position.
 17              MS. PETERS:  Thank you.  Does anyone
 18  else here have any other questions?  If not --
 19              MR. HILDEMAN:  I would like to comment
 20  on that, just regarding Mr. Carson's question.  I
 21  would like a class of work that added to -- would be
 22  reverse engineering.  Okay.  That under Section
 23  1201(a)(1) should be copyrighted material which can
 24  be reverse engineered for legitimate interoperable
 25  uses.  Okay.
 26              MR. CARSON:  So that would be

                                                   PAGE 46
  1  copyrighted material of any kind --
  2              MR. HILDEMAN:  Right, for the reverse
  3  engineering.  Yes.
  4              MR. CARSON:  So that suggests that if a
  5  piece of music was available in an intertrust DRM,
  6  it would be okay to reverse engineer that DRM.
  7              MR. HILDEMAN:  I think in order to
  8  develop a compatible DRM system for legitimate
  9  purposes only.
 10              MR. CARSON:  But it's the conduct that
 11  would be allowed by a 1201(a)(1) and how would we
 12  know that that was the legitimate purpose for that
 13  particular use and that this was a legitimate user
 14  action intended to make compatible DRMs or whatever?
 15              MR. HILDEMAN:  As you know, when we talk
 16  about copyright content, in software and the
 17  copyright content all in one.  So in order for a
 18  company to reverse engineer, I think they need to
 19  have full access.
 20              MR. SHERMAN:  I guess I would just
 21  comment broadly that I thought that this was a
 22  debate that had already occurred.  It occurred in
 23  Congress where a great deal of time was spent by a
 24  great many people trying to figure out the right
 25  balance and what this 1201(a)(1) proceeding should
 26  be all about, and the statute speaks pretty clearly

                                                   PAGE 47
  1  to the fact that one is looking at particular
  2  classes of works and, instead, we're hearing that
  3  particular classes of users should be given certain
  4  rights and, when it comes down to works, we're being
  5  told that it's basically all works that somehow fall
  6  into some broad category, whether it's the category
  7  of copies which have been lawfully acquired by users
  8  or whether it's copies that can be reverse
  9  engineered.
 10              I really do not think that that was the
 11  balance that was struck by the Congress, and I think
 12  it would be a dis-service to the law, as well as to
 13  policy, to go in that direction.
 14              MR. CARSON:  Mr. Hildeman, do you have
 15  any response to -- I think part of what Mr. Sherman
 16  was saying was Congress set up the rules with
 17  respect to reverse engineering.  Given that Congress
 18  certainly does have a specific provision on that,
 19  what empowers us to broaden -- in effect, isn't it
 20  fair to say you're asking us to broaden Section
 21  1201(f) and, if that is what you're asking us to do,
 22  why should we think we have the power to do that
 23  when Congress has arguably written the ground rules
 24  on the first engineering?
 25              MR. HILDEMAN:  I guess I'm just pointing
 26  out conditions we would like to see.  I guess I

                                                   PAGE 48
  1  don't have any clear answer for you how --
  2              MS. PETERS:  It is his wish.
  3              MR. CARSON:  Sure.  Putting myself in
  4  your chair, the Copyright Office will do it for you
  5  and the Librarian will do it for you.  Then why not?
  6              MR. HILDEMAN:  Sure.
  7              MS. PETERS:  Rob has one question.
  8              MR. KASUNIC:  I had one more question,
  9  just following up about Marybeth's question about
 10  access and talking about the underpinnings of a
 11  right to access for a work and mention of the
 12  Salinger type situation.  But isn't there a
 13  distinction that we're dealing, as in Salinger, with
 14  an unpublished work where here we're dealing with
 15  works that are distributed and available and we're
 16  also talking about, in that particular example, of a
 17  sole source situation where that is distributed and
 18  it's not something that is kept in a locked box?
 19              MR. SHERMAN:  You're certainly right,
 20  and I was over-stating the proposition when
 21  comparing unpublished with published works.  But the
 22  principle really ought to be the same.  A copyright
 23  owner might want his or her copyrighted work to only
 24  be available in certain forms.  When the Director's
 25  Guild came in and said they hate the reformatting
 26  for TV because it is a disgrace to their work which

                                                   PAGE 49
  1  was designed for a different kind of screen and that
  2  it reflected on their capabilities as directors and
  3  cinematographers and so on, people respected their
  4  right to have some ability to at least let it be
  5  known that this was not their original work or
  6  whatever.
  7              Recording artists might want their music
  8  to be available or seen only in a certain way.
  9  There might be video footage that they only want to
 10  see when it's combined with the music itself because
 11  it makes a certain kind of statement to them, or
 12  they might want it only heard in its entirety, or
 13  they might want the photographs limited in certain
 14  kinds of ways.
 15              Artists feel very strongly when they
 16  create an album that it is a form of their
 17  expression, and they don't like it when a particular
 18  piece is plucked out of context and the album isn't
 19  viewed as a work in its entirety.  They regard the
 20  graphics as an integral part of the music and so on
 21  and so forth, and I think that we have an obligation
 22  to try and respect those kinds of creator's wishes
 23  and, if that means that not every piece of
 24  everything can be taken separate and apart, I think
 25  that's part of the calculus that would go into a
 26  fair use analysis.  But the mere fact that it's out

                                                   PAGE 50
  1  there doesn't mean that there are obligations with
  2  respect it forever being made available in any form
  3  to anybody.
  4              MR. KASUNIC:  1201(a)(1) will then begin
  5  to protect moral rights in terms of that integrity
  6  and respecting the artists' wishes? Whereas with
  7  fair use, you could take a portion of the work,
  8  rather than that particular view that the artist
  9  might have wanted portrayed?
 10              MR. SHERMAN:  That's a discussion that
 11  we can have in three years, six years, nine years,
 12  12 years, at such point as there's even a glimmer of
 13  risk that there would be an adverse effect on users
 14  being able to enjoy fair use.  Thus far, that just
 15  hasn't happened.  It is a good, long-term issue that
 16  we could talk about, and the moral rights component
 17  will be very interesting.  But that certainly isn't
 18  a present day issue.
 19              MS. PETERS:  Thank you very much.
 20              The hearings will resume this afternoon
 21  at 2:00.
 22              (Whereupon, the hearing was recessed at
 23  11:10 a.m. to resume at 2:00 p.m.)
 24              MS. PETERS:  Good afternoon.  Welcome to
 25  the afternoon session of our second day of hearings.
 26  This afternoon, we have actually I guess five

                                                   PAGE 51
  1  separate speakers, although a number of you
  2  represent CCMC.  I'm going to go in the order that
  3  it shows on our witness list, which is to start with
  4  the University of Maryland and then go to the
  5  University of Michigan and then move over CCUMC.  So
  6  why don't we start.
  7              MR. PETERSEN:  Thank you.  Good
  8  afternoon.  My name is Rodney Petersen.  I'm the
  9  Director of Policy and Planning in the Office of
 10  Information Technology at the University of
 11  Maryland, College Park.  Although I hold a law
 12  degree, my role there is as an administrator and
 13  educator.
 14              In my administrative role, I'm
 15  responsible for our polices and practices as they
 16  relate to the legal and ethical uses of information
 17  technology.  In that capacity, I have the
 18  distinction of being the University's registered
 19  agent under Title II of the DMCA, and I also direct
 20  a team called Project NEThics, and attached to the
 21  written testimony is some further information about
 22  that group who responds to allegations of
 23  information technology misuse including copyright
 24  infringement.  So as you can imagine, some very
 25  interesting things come my way on a regular basis.
 26              Similarly, my responsibilities entail an

                                                   PAGE 52
  1  educational and outreach function that include
  2  conducting workshops, lecturing in classes,
  3  consulting and writing for publications on a variety
  4  of topics that concern Internet law and policy.
  5  Issues of intellectual property, especially the
  6  application of copyright law in institutional
  7  policies in the digital environment, are an ever-
  8  increasing part of my portfolio.
  9              In case you're not aware, the University
 10  of Maryland, College Park is the flagship
 11  institution of the university system of Maryland.
 12  The University is a land grant Research I
 13  institution and a member of the Association of
 14  American Universities, the Association of Research
 15  Libraries and the National Association of State
 16  Universities and Land Grant Colleges.
 17              The Office of Information Technology
 18  supports the teaching, research and outreach mission
 19  of the University through the provision of
 20  information technology infrastructure and support
 21  services necessary for the educational enterprise.
 22              While I'm here today principally to
 23  support the concerns that have been raised by the
 24  library community, I'm also here to share some of my
 25  views of how the outcome of the rulemaking process
 26  will impact on higher education information

                                                   PAGE 53
  1  technology community as well as the faculty and
  2  staff and students that we serve at our institution.
  3              It should be exceedingly obvious by now
  4  that each of the people who testify before you or
  5  who have written testimony that you've reviewed
  6  bring a certain set of biases or values that are
  7  shaped by our training, by our experiences or by our
  8  institutional cultures.  So, therefore, I should
  9  disclose in advance of my discussion of the issues
 10  what are perhaps some obvious but important points
 11  of reference.
 12              The higher education IT community, as I
 13  view it in general, is, as you can imagine, very
 14  enthusiastic about the use of technology to enable
 15  intellectual discovery, the use of technology to
 16  support scholarship and the creation of new content,
 17  the use of technology to facilitate the distribution
 18  of copyrighted works, and the use of technology to
 19  manage access and control to information and
 20  services.
 21              On the other hand, I think the IT
 22  community, in general, as I see it, also disapproves
 23  of certain uses of the technology including uses
 24  that engage in illegal activities, technology to
 25  invade personal privacy, technology to interfere
 26  with open access to information, and technology to

                                                   PAGE 54
  1  unduly regulate the free exchange of ideas.
  2              In my conversations with colleagues
  3  about the impact of this Section 1201(a)(1) --
  4  which, by the way, I wouldn't dare call it that to
  5  them, they wouldn't begin to understand what I was
  6  referring to-- but when I talk to people about the
  7  issues of general concern, the discussions center
  8  around three themes, and I recognize, having been
  9  here yesterday and reading a lot of the testimony,
 10  that some of these themes are much broader than the
 11  issue before you, but I feel they're important to
 12  put on the record, particularly from a person who
 13  works in information technology perhaps in addition
 14  to what you've already heard the Librarian say.
 15              The first thing I would emphasize is
 16  that any time any place learning necessitates access
 17  to digital information.  You right away think I'm
 18  probably going to go off into your distance
 19  education study, and I recognize that work has
 20  already been done, but it's a very important issue.
 21  Many colleges and universities are developing online
 22  degree programs, seeking ways to expand their
 23  student base or enhancing their current curriculum
 24  through distributed learning techniques.
 25              At the University of Maryland, for
 26  example, we expect that our primary mission will

                                                   PAGE 55
  1  continue to be fulfilled as a residential campus.
  2  Nonetheless, we are aggressively seeking ways to use
  3  technology to enhance the learning experience for
  4  our residential community, although I must note that
  5  a majority of our students are still commuter
  6  students who don't actually live on campus.  As well
  7  as we're looking at ways we can do outreach to the
  8  citizens of the state that helps us fulfill our land
  9  grant mission.
 10              Other institutions such as our
 11  neighboring university system of Maryland
 12  Institution University College, who I believe
 13  testified before you on the distance education
 14  study, they're already conducting a majority of
 15  their courses online and will continue to move in
 16  that direction.  So the system of distributed
 17  learning that's being anticipated at our university,
 18  the University of Maryland, and several other
 19  research institutions will increasingly depend upon
 20  information that's accessible on the Internet and
 21  through our digital libraries.
 22              Consequently, the legal and public
 23  policy framework that governs access preservation
 24  and the use of digital information is of paramount
 25  interest to the higher education and IT communities.
 26              Secondly, the difference between buying

                                                   PAGE 56
  1  a work and licensing it is significant.  A recent
  2  report of the National Research Council summarizes
  3  this development as follows.  "The sale of a
  4  physical copy of a work has been the dominant model
  5  for transferring intellectual property to the
  6  consumer for more than 200 years.  Sales involve the
  7  complete transfer of ownership rights in the copy.
  8  Copyright law explicitly anticipates the sale of
  9  intellectual property products and, by the first
 10  sale rule, constrains a copyright holder's rights in
 11  copies of the work that have been sold.
 12              So, for example, the purchaser is to
 13  free to lend, rent, or resell the purchased copy.
 14  In that sense, copyright law follow IP products into
 15  the marketplace and promotes the continued
 16  dissemination of information."  And I'm still
 17  quoting from this report where it goes on to say,
 18  "Licensing, however, constitutes a limited transfer
 19  of rights to use an item on stated terms and
 20  conditions.  Licenses are governed by contract law
 21  and, as such, are essentially a private agreement
 22  between two parties.  That agreement can involve a
 23  wide range of terms and conditions and need not
 24  incorporate any public policy considerations beyond
 25  some basic limits on what constitutes an enforceable
 26  contract."  And that ends the quote from that

                                                   PAGE 57
  1  report.
  2              While the higher education community has
  3  become accustomed to the use of sight licenses for
  4  computer software programs, an area that in the
  5  Office of Information Technology we deal with quite
  6  regularly, the concept of licensing books, journals
  7  and databases is a proposition that we have not
  8  fully embraced.  And at the core of our resistance
  9  is that in the fear of the process of shifting from
 10  a paradigm of buying a work to one where we license
 11  its use may also lead to the forfeiture of the
 12  exemptions we presently enjoy under the federal
 13  copyright law.
 14              Accordingly, access control technologies
 15  further erodes our confidence that the balances
 16  contemplated under the copyright law will be
 17  maintained when it comes to access and use of
 18  digital works.
 19              Thirdly and finally, the move to
 20  commercialize information must work for the public
 21  good.  The oft-cited phrase from the United States
 22  Constitution in support of copyright protections
 23  claim that its intended purpose is to, quote, "To
 24  promote the progress of science and the useful
 25  arts."  Unquote.
 26              Yet, the exclusive rights under the

                                                   PAGE 58
  1  Copyright Act or the limited monopoly in vision by
  2  the framers of the Constitution often resides, not
  3  with the original author or creator, but commercial
  4  publishers or information distributors.  The present
  5  effect has been to misappropriate the protections of
  6  copyright law to, quote, "To promote corporate
  7  profits and protect commercial interest."  Unquote.
  8              The higher education community has
  9  fallen victim to this present state of affairs when
 10  its own faculty scholars who generate copyrightable
 11  works assign the rights to for profit publishers who
 12  turn around and resell the publication back, at
 13  considerable cost, I might add, to the same colleges
 14  and universities that generated the intellectual
 15  capital.
 16              Another troubling aspect is the
 17  placement of public domain materials, including
 18  facts and government information into digital
 19  formats that proclaim a form of legal protection not
 20  heretofore acknowledged under federal copyright law.
 21  The exploitation and commercialization of
 22  information accessible by means of a computer
 23  network and information technology is precisely what
 24  the Uniform Computer Information Transactions Act,
 25  or UCITA, that is being proposed to the 50 states as
 26  a uniform state law anticipates.

                                                   PAGE 59
  1              The State of Maryland General Assembly
  2  recently voted to be among the first in the country
  3  to adopt UCITA, with significant amendments, I might
  4  add, and UCITA will establish a new legal framework
  5  centered around state contract law for transaction
  6  in computer information, which would include classes
  7  of works already covered under federal copyright law
  8  and then some.
  9              As I said at the outset, I recognize
 10  that these broader themes are part of other debates
 11  in the states as well as recent studies under the
 12  purview of this office, the Copyright Office.  But
 13  while these themes touch on issues much broader and
 14  more philosophical than the specific purpose for
 15  this rulemaking, it is an important backdrop as to
 16  why the higher education and IT communities seek to
 17  secure an exemption to prohibition and circumvention
 18  of copyright protection systems for access control
 19  technologies.  So I will now comment very briefly on
 20  some of the specific questions identified in your
 21  Notice of Inquiry.
 22              First, a majority of the questions seek
 23  information pertaining to the present effects of
 24  technological measures, and the University of
 25  Maryland has employed technological measures to
 26  limit access to its online resources in an effort to

                                                   PAGE 60
  1  comply with its license agreements.  We have also
  2  devised simple and secure methods to restrict access
  3  to course websites that make fair use of copyrighted
  4  works as well as that contain private information in
  5  the form of student education records.
  6              We are becoming increasingly
  7  sophisticated in our ability to use password
  8  protection, certificate authorities, and proxy
  9  servers for our own purposes of authentication and
 10  authorization.
 11              On the other hand, the technology that
 12  Section 1201(a)(1) anticipates is still in its
 13  infancy, and we expect to see further developments
 14  and ongoing introduction of such measures as the
 15  technology matures.  For example, public key
 16  infrastructure, or PKI, is still a clumsy and not
 17  well understood technology, but there are
 18  experimentations under way that could make it a more
 19  widely used technology in the near future.
 20              Additionally, the rapid adoption in the
 21  states of the Uniform Electronic Transfers Act, UETA
 22  as opposed to UCITA, is likely to further facilitate
 23  commercial Internet transactions, including access
 24  to digital information.  So, in other words, we are
 25  on the verge of seeing an explosion of the uses of
 26  technological measures not realized today.

                                                   PAGE 61
  1              Second, questions 11 and 16 specifically
  2  ask, quote, "Should any classes of works be defined,
  3  in part, based on whether the works are being used
  4  for nonprofit archival, preservation, and/or
  5  educational purposes or purposes of criticism,
  6  comment, news reporting, teaching, scholarship or
  7  research?"  And my obvious reply is, yes.  And the
  8  purpose for my response is that these very types of
  9  uses that are already contemplated and given special
 10  protections under existing sections of the Copyright
 11  Act, including the provisions for fair use.  Digital
 12  materials should be treated the same as their analog
 13  counterparts for purposes of copyright protections
 14  and determining acceptable uses.
 15              It would seem that the, quote, "the
 16  promotion of science and useful arts," unquote, is
 17  most likely to flourish if we ensure an exemption
 18  that fully addresses the teaching, scholarship and
 19  research functions of our nation's research
 20  universities.
 21              And finally, question 17 asks, quote,
 22  "should any classes of works be defined, in part,
 23  based on whether the works are being produced in
 24  ways that do not constitute copyright infringement?
 25  For example, is fair use in a manner permitted by
 26  exemptions prescribed by law?"  Unquote.

                                                   PAGE 62
  1              Again, my answer is yes.  The
  2  Association for Computing Machinery, in their
  3  comments dated February 17, said it best when they
  4  urged you to prohibit the circumvention of
  5  technological measures only when it is done with the
  6  intent to infringe.  Criminal intent has always been
  7  an important foundation for our criminal justice
  8  system and seems to be an essential limiting factor
  9  as you further define the exemption.
 10              The University of Maryland remains
 11  committed to policies and educational efforts that
 12  denounce infringing activities and will continue to
 13  condemn acts of piracy.  On the other hand, we
 14  vigorously defend the right of the members of our
 15  education and research community to take full
 16  advantage of the rights and exemptions ensured under
 17  the Federal Copyright Law.
 18              In conclusion, the February 10th comment
 19  submitted by the National Association of Independent
 20  Schools observes, and I quote, "Copyright law in the
 21  21st century should enhance the ability of schools
 22  to lawfully access information for appropriate
 23  education purposes, not create barriers that will
 24  discourage the use of new technologies in the
 25  classroom."  Unquote.
 26              On some days I feel like  a technology

                                                   PAGE 63
  1  evangelist in my role at the University and, believe
  2  me, encouraging some of our faculty to use
  3  technology in their instruction and research is
  4  likely to require a higher power.  On the other
  5  hand, the faculty and students at our nation's
  6  research universities are both creators and
  7  consumers of copyrighted works.  Therefore, there's
  8  no questioning the interest of research universities
  9  in maintaining the careful balances under federal
 10  copyright law that have developed over time.  And to
 11  keep that balance in check, a broad exemption to the
 12  prohibition on circumvention of copyright protection
 13  systems for access control technologies is therefore
 14  essential to allow access and promote use of
 15  copyrighted works for educational, scholarly, and
 16  research purposes.
 17              MS. PETERS:  Thank you very much.
 18              Aline.
 19              MS. SOULES:  Thank you.  Thank you for
 20  this opportunity to speak.  I am Aline Soules, and
 21  I'm currently the Librarian at the University of
 22  Michigan's Business School.  However, I am not
 23  speaking today on behalf of my employer, but on my
 24  own behalf.
 25              In my summary of intended testimony, I
 26  advocated that we focus on the original intent of

                                                   PAGE 64
  1  copyright law, namely the promotion of learning and
  2  the creation of new knowledge.  We should also
  3  strive to achieve a balance among the needs of
  4  authors, creators, publishers, vendors, educators,
  5  librarians, learners, and others engaged in these
  6  endeavors.  In the digital environment, this balance
  7  should be preserved as well.
  8              I would like to address some of the
  9  activities in which librarians engage to provide
 10  access to digital resources for our users.  One of
 11  the common misconceptions about electronic
 12  information is that everything on the Internet is
 13  free, but libraries across the country are spending
 14  more and more dollars to subscribe legally to
 15  electronic resources that our users demand.
 16              Last fiscal year, our small business
 17  library spent over $230,000 out of an $800,000
 18  materials budget on electronic resources, and this
 19  trend toward electronic access will continue.  This
 20  proportion would increase if vendors did not require
 21  my library to maintain print in addition to
 22  electronic formats.
 23              The digital environment holds great
 24  promise for libraries.  The benefits to our users
 25  are great.  Digital technology allows users greater
 26  ability to seek and to find information.  Obviously,

                                                   PAGE 65
  1  searching the Web or a CD-Rom using a sophisticated
  2  search engine is preferable to the traditional
  3  methods of searching in print indexes.  However,
  4  enhanced digital capabilities should not come at the
  5  cost of a user's legal right to access nor should
  6  fair use protections be dependent on format.
  7              As a business librarian, I work with
  8  vendors regularly to negotiate licenses for access
  9  to electronic resources.  Some vendors are
 10  aggregators of information, some are original
 11  creators, and some are both.  Sometimes they call on
 12  me to help them decide on what information to
 13  include in their databases, which I am glad to do as
 14  a professional courtesy and to further the interests
 15  of my library customers.  Some of them just try to
 16  sell me their products.  All of them, however,
 17  charge me for the end result.
 18              With many of these vendors, we come to
 19  an agreement that we can both live with.  As I work
 20  in a public university, I seek contractual uses for
 21  faculty, students, staff, and walk-ins.  I am,
 22  however, dependent on vendors' accommodations for
 23  some of these access rights, and there have been
 24  some occasions where I have not been successful.
 25              Sometimes restrictions are related to
 26  who can use the database.  Sometimes the database

                                                   PAGE 66
  1  can be used for teaching but not research.  In an
  2  environment where the two are so intertwined, they
  3  should be seamless.  And sometimes the vendor
  4  permits information to be used in class but not for
  5  projects.  Further, we assume fair use rights but
  6  often the original contract explicitly prohibits
  7  such use, and we have to negotiate that, as well.
  8              Within this licensing environment,
  9  negotiation between the interested parties is still
 10  relatively open.  Once contracts are signed,
 11  technological protection measures are cleared by the
 12  vendor to make the product available.  As was
 13  described by David Mirshin, representing
 14  SilverPlatter, librarians and vendors have worked
 15  for years with passwords and other technological
 16  protection measures.  Librarians are concerned that
 17  if Section 1201(a) is implemented without an
 18  exemption, existing problems with negotiations will
 19  be even more difficult to resolve.  Moreover,
 20  vendors will then have the strength of criminal
 21  penalties to enforce their contracts.
 22              For example, we have faced situations
 23  where we pay for the use of a database but, through
 24  the course of the year's contract, information in
 25  the database disappears.  Sometimes we are told,
 26  sometimes we are not.  The vendor will ascribe this

                                                   PAGE 67
  1  to a publisher decision.  Regardless of the reason,
  2  we do not get a refund and we have lost the
  3  information.
  4              There are several problems here.  The
  5  database is paid for with public money, and the
  6  public sometimes gets no access.  We rent this
  7  information because we can't buy it, which means we
  8  pay for it over and over again.  Should we be unable
  9  to pay at some point, we have nothing, not even the
 10  years we paid for.
 11              Content is not guaranteed, even through
 12  the life of the contract.  Vendors are generally
 13  unable to supply or guarantee that information will
 14  be archived.  Vendors, on occasion, choose to
 15  examine our activity and exercise controls without
 16  discussion or question.  What happens when the
 17  vendor can visit simply by examining our computer
 18  activity?
 19              My next example comes from my private
 20  life.  My brother-in-law is co-principal at an inner
 21  city Detroit school.  The budget for the little
 22  library in his school is $500 for the year, money
 23  that comes from Title VI.  His librarian buys a few
 24  magazines, a couple of other items, and relies on
 25  donations of material from other sources.  According
 26  to him, it seems to work.  If he weren't going to

                                                   PAGE 68
  1  retire this year, I would suggest that he's probably
  2  in for a surprise.  I could donate some books or old
  3  journals to his library through the right of first
  4  sale, but what do I do with electronic information?
  5  What do these students do as they fall further
  6  behind the digital divide?   If technological
  7  measures are applied so tightly that libraries can
  8  not exercise first sale rights, smaller libraries
  9  with restricted budgets will suffer
 10  disproportionately.
 11              It is obvious that our environment is
 12  changing rapidly.  Access, use, and content are
 13  integrated in a way they haven't been in the past.
 14  As a result, we have polarization between those
 15  seeking control of their products and those who need
 16  access, and we have growing distrust among these
 17  various groups and the individuals within them.
 18              We are not finished with this
 19  technological revolution.  Until we are farther
 20  along, we can not afford to introduce restrictions
 21  that will damage the abilities of each of us to
 22  access information for the legitimate purposes of
 23  learning and creating new knowledge.  We need to
 24  work together to create the technological means that
 25  will maintain the balance inherent in the original
 26  concept of copyright.  To tip the balance too much

                                                   PAGE 69
  1  in any one direction will deter our efforts to learn
  2  and create new knowledge and will not provide the
  3  incentive for us to work together, nor to continue
  4  developing technology for the best interests of all.
  5              Thank you again for this opportunity to
  6  speak.
  7              MS. PETERS:  Thank you.
  8              Let's turn to CCUMC and whatever order
  9  works for you is fine with us.
 10              MS. VOGELSONG:  The Consortium of
 11  College and University Media Centers appreciates
 12  this opportunity to speak on the rulemaking
 13  regarding Section 1201(a)(1) of the Copyright Act
 14  which was added by the Digital Millennium Copyright
 15  Act.  Our members have important concerns regarding
 16  the question of whether there are classes of works
 17  as to which users are or are likely to be adversely
 18  affected in their ability to make non-infringing
 19  uses if they are prohibited from circumventing
 20  technological measures that control access to
 21  copyrighted work.
 22              Representing our organization today are
 23  three members of CCUMC's Government Regulations and
 24  Public Policy Committee:  Jeff Clark to my right and
 25  your left from James Madison University, Dan Hamby
 26  representing the Public Broadcasting Service, and

                                                   PAGE 70
  1  myself, Diana Vogelsong from American University.
  2  I'm actually substituting here for Lisa Livingston
  3  from the University of Wisconsin.
  4              The Consortium of College and University
  5  Media Centers, or CCUMC as we are known, represents
  6  institutions of higher education primarily in the
  7  United States as well as a number of media producers
  8  and distributors.  In fact, many of our members are
  9  involved in both creation and use of media materials
 10  in the our educational institutions.  Many of the
 11  distributor members work closely with our academic
 12  institutions to support their educational
 13  objectives.
 14              As Dan Hamby, my colleague here, and
 15  representing PBS, has stated, "We're wrestling with
 16  issues from enhanced content to new delivery
 17  systems.  Protecting the copyright but still making
 18  the material available to as wide a base of users as
 19  possible is still a key goal."
 20              CCUMC's educational members acquire and
 21  manage collections of material in a broad range of
 22  formats.  They also provide curriculum support for
 23  faculty and others who wish to make effective use of
 24  these materials in teaching and learning.  Members
 25  play an active role in educating users about respect
 26  for intellectual property.

                                                   PAGE 71
  1              Issues related to use of and access to
  2  materials for educational purpose are at the core of
  3  CCUMC's mission.  Our organization led the
  4  development of the Fair Use Guidelines for
  5  Educational Multimedia in conjunction with a
  6  Conference on Fair Use of the National Information
  7  Infrastructure's Working Group on Intellectual
  8  Property Rights.  These guidelines were published as
  9  part of a non-legislative report of the Subcommittee
 10  on Courts and Intellectual Property of the Committee
 11  of the Judiciary, U.S. House of Representatives on
 12  September 27, 1996.
 13              We would like to preserve the gains that
 14  we made through that document by helping to define
 15  fair uses, as well as other non-infringing uses.
 16              The guidelines meet educators' needs for
 17  better understanding and application of fair use.
 18  They deal with integrated presentations created and
 19  used by faculty and students, composed of their
 20  original materials such as course notes or
 21  commentary, together with various copyrighted,
 22  lawfully acquired media formats, including motion
 23  media, music, text material, graphics,
 24  illustrations, photographs and digital software.
 25              The purposes for which faculty and
 26  students can apply these guidelines cover

                                                   PAGE 72
  1  curriculum, instruction and study, including some
  2  limited distance education application over secure
  3  networks, peer conference presentation for faculty,
  4  and portfolio evidence for both faculty and
  5  students.
  6              I'd like to now turn this over to my
  7  colleague, Jeff Clark, to talk about our particular
  8  concerns.
  9              MR. CLARK:  On the issue of possible
 10  exemptions to the prohibition against circumvention
 11  of technological measures that control access to
 12  copyrighted works, CCUMC testimony will focus on the
 13  following areas.  First, the feasibility of
 14  identifying classes of work to be considered for
 15  exemption under this rulemaking procedure.  Second,
 16  concern about the ability to distinguish access from
 17  use in technological implementation.  Third,
 18  identification of examples where educational
 19  activity is or may be constrained under the anti-
 20  circumvention rule if exemptions are not permitted.
 21  And fourth, a recommendation for an exemption for
 22  instructional media centers.
 23              First, this rulemaking procedure has
 24  been established in part to determine whether
 25  classes of works are likely to be adversely affected
 26  by the prohibition against circumvention of

                                                   PAGE 73
  1  technological controls on access to copyrighted
  2  works.  The CCUMC questions the requirement to
  3  restrict exemptions to only certain classes of work.
  4              When examining this issue in light of
  5  teaching and learning requirements, distinction
  6  between classes of works affected becomes difficult
  7  to determine.  Some works are created expressly for
  8  use in the classroom as dedicated instructional
  9  materials. Some of the materials provided by my
 10  colleagues at PBS fall into that category.  Their
 11  express purpose is to enhance the teaching and
 12  learning process.
 13              Other classes of works represent
 14  cultural expressions which have other primary
 15  purposes in the market but are useful as
 16  instructional resources in two broad ways.  They
 17  provide rich content for teachers to draw upon to
 18  achieve instructional objectives similar to those
 19  achieved by so-called instructional resources and,
 20  again, some of the general audience programs that
 21  are produced by organizations like PBS fall into
 22  that category for educators, as well.  And secondly,
 23  they can be analyzed and studied as cultural,
 24  social, and political artifacts which reveal
 25  important meaning about their human sources and
 26  uses.

                                                   PAGE 74
  1              As front line educators and producers of
  2  educational materials, CCUMC recognizes the valuable
  3  role that anti-circumvention technologies plays in
  4  assuring protection of the rights of creators and
  5  producers.  However, we also recognize the value of
  6  all types of media as educational resources.  When
  7  selecting teaching resources, educators must first
  8  identify their teaching objectives and understand
  9  the varied learning styles of their students.  Only
 10  then is the medium or delivery format effectively
 11  selected.
 12              Indeed, recent theories of multiple
 13  intelligences stress that educators recognize the
 14  importance of using a variety of teaching approaches
 15  to meet student needs.  With this in mind, it is
 16  evident that any attempt to identify classes of
 17  works to be exempted under the anti-circumvention
 18  ruling imposes a burden on the educational process.
 19              Two: the difficulty of distinguishing
 20  access and use in the digital environment places
 21  educators at a disadvantage.  A distinction is made
 22  in the new Section 1201(a)(1) of the copyright title
 23  between access to works, circumvention of whose
 24  security measures is prohibited, and the non-
 25  infringing uses or effectively fair uses that may be
 26  made of them which is not.  This makes sense in

                                                   PAGE 75
  1  terms of controlling circumvention of protective
  2  measures for purposes of illegal access to
  3  copyrighted materials that have not been properly
  4  licensed. Publishers and producers have argued that
  5  fair uses would be permitted, therefore, for those
  6  who have acquired materials lawfully.  In this
  7  scenario, where a broad-based license encompasses or
  8  even goes beyond the fair use criteria to meet
  9  educational needs, few would have concerns about
 10  protection for copyright holders.
 11              The dilemma arises from evolving
 12  technologies where technological measures for
 13  controlling both are blended or even bound
 14  inseparably.  This trend may grow as the market aim
 15  of some copyright holders becomes a pay per use
 16  model that comprimises the ability to educate
 17  freely.  The Committee on Commerce, House of
 18  Representatives, H.R. Report No. 105-551 in 1998
 19  recognized this risk in considering the DMCA when
 20  it, quote, "felt compelled to address the risk that
 21  enactment of the bill could establish the legal
 22  framework that would inexorably create a 'pay per
 23  use' society."  Unquote.
 24              Both of these issues are important
 25  because the rulemaking proceeding will determine
 26  whether classes of work are likely to be adversely

                                                   PAGE 76
  1  affected by encryption, secure envelopes, or other
  2  means of control from the digital realm.
  3  Increasingly, materials are available only in
  4  electronic formats and traditional media can not be
  5  relied upon as back-up resources when educators seek
  6  to exercise fair use options.  Because decisions
  7  made on this matter would hold for three years until
  8  the next review process, educators will be at risk
  9  if projections regarding access measures,
 10  marketplace changes, or even teaching needs and
 11  methodologies do not track as anticipated and pay
 12  per use technologies become the norm.
 13              The rulemaking process, therefore, puts
 14  the counter-balancing operation of fair use as it's
 15  traditionally understood and applied at a clear and
 16  unnecessary disadvantage.  Such an unfortunate legal
 17  restriction may not be immediately quantifiable in
 18  monetary terms but could substantially restrain the
 19  effectiveness of educational efforts over the
 20  intervening period that they may be in effect until
 21  the next Copyright Office review.
 22              Third, to illustrate the above issues,
 23  CCUMC offers the following examples of educational
 24  situations involving protected copyrighted materials
 25  where fair use is or might be compromised if
 26  educational activity is unreasonably constrained

                                                   PAGE 77
  1  under the anti-circumvention rule of the DCMA.
  2              First example.  The in-process legal
  3  action, or I should say actions of several types,
  4  against the DeCSS decryption of DVD software is
  5  relevant to the following teaching method that was
  6  cited by a CCUMC member.  Quote.  "One very popular
  7  method used in visual media studies is the direct
  8  side-by-side comparison of two similar pieces.  In
  9  this instructional style, the two examples are
 10  placed side by side in Quicktime windows and the
 11  clips are played first on one side, then on the
 12  other.  The instructor then has the ability to line
 13  up exact points in the two scenes to demonstrate
 14  visual differences.  With the proposed DMCA's
 15  provisions, we would be unable to do this simple
 16  task because the visual media would be protected."
 17  Unquote.
 18              If the provision under review in these
 19  hearings applies in full force, the DVD, which is
 20  the highest quality video format that's readily
 21  available right now, would be unavailable for use in
 22  the teaching method described here.
 23              Another CCUMC colleague experienced one
 24  of the unexpected effects  that technological
 25  security measures can have on occasion.  The CD-Rom
 26  version of the Oxford English Dictionary, though

                                                   PAGE 78
  1  usable on an individual PC workstation, would not
  2  output to a data projector for group instructional
  3  purposes.  While perhaps unusual, this speaks to the
  4  unpredictability factor that can sometimes be
  5  introduced when software security measures are
  6  implemented.
  7              Another example involves image databases
  8  in general.  They are licensed by many institutions
  9  through their libraries or media centers.
 10  Currently, some may not offer a full range of
 11  manipulation tools for their contents that
 12  accommodate different teaching goals and styles, and
 13  they may not allow extraction of content to achieve
 14  this manipulation, under fair instructional use,
 15  through other software means.
 16              For example, a sophisticated form of
 17  such need for manipulation is offered by another
 18  CCUMC member.  In a pilot project involving an art
 19  image database, images were loaded by students into
 20  Adobe Photoshop software and manipulated to create
 21  new designs for museum posters.  Similarly, students
 22  could combine the images with other materials in
 23  other software to create virtual exhibitions.  The
 24  instructional aim met by this form of working with
 25  the images was to allow students to study their
 26  formal meaning and content in ways that could not be

                                                   PAGE 79
  1  pursued had they been limited to viewing the images
  2  in the original format and database only.
  3              Even should databases used to meet this
  4  sort of teaching and learning purpose not currently
  5  prohibit this method, this manipulation
  6  technologically, this status quo could change
  7  unexpectedly in the future, thereby jeopardizing an
  8  effective instructional method that had become an
  9  integral part of instruction.
 10              Many media, statistical and text
 11  databases used in group instruction are currently
 12  and in future will continue to be subject to
 13  licensing restrictions on the number of simultaneous
 14  users that are implemented technologically and often
 15  rigidly.  This may mean that for instructional
 16  purposes the database may not be dependably
 17  available for display when needed.  When the primary
 18  aim of the class instruction is to demonstrate how
 19  to use the database features and locate or
 20  manipulate its elements, the intellectual content
 21  isn't an issue.  Nonetheless, such a use is being
 22  counted as one of the simultaneous users and subject
 23  to restrictions that may make the teaching process
 24  difficult if restrictions can not be readily
 25  circumvented.
 26              In their submitted remarks, libraries

                                                   PAGE 80
  1  have already identified examples where off-campus
  2  access by enrolled students to legally acquired
  3  databases may pose a problem under the new ruling.
  4  As all formats are migrating to digital and
  5  electronic delivery, these restrictions have the
  6  potential to inhibit access to a full range of
  7  media, including music, speeches, and other recorded
  8  sound, video, and still images.  Circumvention
  9  measures such as proxy servers can provide access to
 10  legitimate users for educational purposes without
 11  violating the rights of the copyright holders.
 12              And finally, fourth, an exemption of
 13  instructional media centers.  Given these
 14  aforementioned concerns,  CCUMC proposes
 15  consideration of an exemption for educational media
 16  centers in the use of materials lawfully acquired by
 17  the institution.  Like libraries, of which many of
 18  our members are organizationally affiliated, medica
 19  centers provide many forms of curricular support
 20  that generally have been acknowledged as appropriate
 21  fair uses.  It seems reasonable to assure that this
 22  activity continue under the DMCA.
 23              MS. PETERS:  Thank you.
 24              MR. CLARK:  Thank you.
 25              MS. PETERS:  Okay.
 26              MR. HAMBY:  I'm just here to provide any

                                                   PAGE 81
  1  answers.
  2              MS. PETERS:  Okay.  We'll start the
  3  questioning.  We'll start with Rachel.
  4              MS. GOSLINS:  First, I'd like to ask
  5  some questions of CCUMC.  I was gratified to see
  6  specific examples in your testimony because that's
  7  something that's very helpful to us as we try and
  8  figure out impact as we go along.  I had some
  9  questions about the specific examples you were
 10  citing to, so if I could just ask you some questions
 11  about those.
 12              The first bullet point in your examples
 13  is the DVD example of needing to play clips
 14  simultaneously in Quicktime windows.  I guess I was
 15  unclear about how access controls are a problem in
 16  doing this.
 17              MR. CLARK:  Well, until the advent of
 18  the decryption, because of a key that was left open
 19  in the DVD encryption and the cases that have
 20  resulted from that, you could not copy DVD either in
 21  an analog format or a digital format into another
 22  piece of software like Quicktime to perform this
 23  kind of teaching purpose.  I guess the access issue
 24  involved in this, was that that broken code is
 25  what's under litigation along with the people who
 26  have disseminated it.

                                                   PAGE 82
  1              MS. GOSLINS:  All right.  Just so I can
  2  clarify, so you needed -- the instructor in this
  3  case needed to use the DeCSS in order to copy the --
  4              MR. CLARK:  I'm sorry.  Yes, that's
  5  right.  In the case a teacher could use it for the
  6  purpose that was cited in the example \226 to copy into
  7  another software application \226 not the purpose that
  8  was given by the people who had found the decryption
  9  and publicized it, which was so they could play it
 10  on their Linux-based computers.
 11              MS. GOSLINS:  Yes, we've heard of that
 12  issue.  So the issue there was that --
 13              MR. CLARK: The mechanism that would
 14  allow this purpose, teaching purpose, as well as the
 15  Linux playback.  Yes.
 16              MR. CARSON:  Let me just get some
 17  further clarification.  Was the problem there -- the
 18  problem there wasn't one of access but of the
 19  inability to copy to another medium.  Is that the
 20  problem?
 21              MR. CLARK:  Well, it has to be accessed
 22  before it can be copied.  In this case, clips for
 23  comparative purposes into a different piece of
 24  software.  But do to that, you have to get into the
 25  DVD which, until this DeCSS came along, was not
 26  possible.

                                                   PAGE 83
  1              MR. CARSON:  Okay.  We're going to be
  2  talking about that issue with some other people
  3  who'll be testifying specifically on that later, but
  4  let me see if I can get some clarification so I can
  5  understand the nature of the problem here.  Had this
  6  instructor been using Windows 98 operating system
  7  rather than Linux, would that instructor have been
  8  able to accomplish what he or she wanted to do or
  9  would he or she still have had to circumvent
 10  something somehow?
 11              MR. CLARK:  Right.  No, they would not
 12  be able to do that because this involved focusing on
 13  simultaneous comparative playback of just specific
 14  instances that had to be lined up.  It's not, to my
 15  knowledge -- and I'm the only one here currently
 16  who's at a media center that offers some technology
 17  support for these things in classroom.  I don't even
 18  know of a cumbersome way yet to do exactly what's
 19  done in this teaching method without recopying and
 20  manipulating by virtue of another piece of software
 21  the clips that are needed.
 22              MR. CARSON:  So someone using a Windows
 23  98 machine, for example, would not have been able to
 24  accomplish that without in some way circumventing
 25  some form of technological protection?
 26              MR. CLARK:  Well, what they would be

                                                   PAGE 84
  1  able to do is, if they had Windows 98 and a DVD Rom
  2  drive in their computer, they could play back the
  3  DVD as they would in a normal DVD video player and
  4  not have the problem that people who had a computer
  5  with Linux do.  But basically they'd be playing it
  6  back like you'd play back two videotapes, too,
  7  trying to jockey them around when the purpose of the
  8  lesson is more exact -- and it may be embedded in a
  9  larger presentational context, the kind of thing
 10  that these fair use guidelines have outlined for
 11  educational media.  They'd be putting it in another
 12  piece of software and having just clips of what they
 13  needed lined up and replayable at certain points,
 14  calibrated and set up -- rather than just
 15  simultaneously spinning two disks, which is less
 16  exact.
 17              MS. GOSLINS:  Okay.  The second bullet
 18  point talks about problems working the Oxford
 19  English Dictionary on a data projector.  And while
 20  I'm entirely sympathetic to the problems of trying
 21  to get technologies to work together, I guess I'm a
 22  little unclear on how that's an access control
 23  problem.  Was it that they couldn't access -- there
 24  was access controls that were preventing them from
 25  projecting?
 26              MR. CLARK:  It was an unidentified

                                                   PAGE 85
  1  problem \226 perhaps should be limited and not
  2  generalized too much as an example.  It's an
  3  unidentified control problem of some kind in the
  4  set-up they use repeatedly for other CD-Roms that
  5  worked fine, but it would not play back this
  6  particular title.
  7              MS. GOSLINS:  So it's not clear whether
  8  that was a problem of access controls or inability.
  9              MR. CLARK:  It's not clear entirely, or
 10  could be another anomaly in the software encoding.
 11              MS. VOGELSONG:  I think one of the
 12  things that media centers are constantly dealing
 13  with is trying to anticipate all the needs at your
 14  educational institution and buy a range of software
 15  that's going to fit the classroom, but you find
 16  yourself in unusual situations where there is a
 17  disabled student in a class and suddenly the class
 18  gets shifted to another classroom and it's coming up
 19  in the next afternoon and you have to prepare the
 20  material that the faculty member is anticipating so
 21  you might not be using the equipment you thought you
 22  were using and you need to exercise fair use to be
 23  able to make it accessible. Those are the kinds of
 24  unexpected situations that come up where if you're
 25  dealing with encrypted information, you can't have
 26  any flexibility in having access to it.  You're

                                                   PAGE 86
  1  really limited in what you can do for that class.
  2              MS. GOSLINS:  The third bullet point
  3  talks about the Adobe Photoshop software and, as far
  4  as I can tell, students were copying images out of a
  5  database to which they had licensed access into
  6  another program and then manipulating the images in
  7  that program.  Is that correct?
  8              MS. VOGELSONG:  In that particular case,
  9  yes.
 10              MS. GOSLINS:  So again -- I'm sorry to
 11  keep harping on the same thing but again, my
 12  question is how is access control at issue there?
 13  Assuming you had licensed access to the database, if
 14  you're copying the images into another program, that
 15  would seem to be an issue about copy controls.
 16              MS. VOGELSONG:  Actually, in that
 17  particular case, it wasn't but the person who
 18  brought this example forward was saying for some
 19  other image databases, if there were encryptions or
 20  limits on their ability to put it in other software,
 21  then that would preclude that kind of study.
 22              MS. GOSLINS:  But that would be a
 23  copying issue.  Right?  I mean controls that
 24  precluded you from taking an image out of one
 25  database and putting it somewhere else would be a
 26  control that affected your ability to copy it and

                                                   PAGE 87
  1  not your ability to access it.  Right?
  2              MS. VOGELSONG:  I suppose to some
  3  degree.  I have problems sorting that out as a media
  4  facilitator.
  5              MS. GOSLINS:  On the fourth bullet
  6  point, which is the restrictions on number of
  7  simultaneous users, you describe these as licensing
  8  restrictions and I just want to make sure that I
  9  understand whether these are restrictions operating
 10  through contract or whether these are actually
 11  technological restrictions, you know, after 20 users
 12  are on the server, it refuses access.
 13              MR. CLARK:  They can be both kinds of
 14  restrictions, both technological and licensing.
 15              MR. CARSON:  To clarify, I assume that
 16  the technological restriction, if it's there, is
 17  there because you had a license which said you can
 18  use up to X users and a technological restriction
 19  was placed on that saying, after X users, nobody
 20  else gets on.
 21              MR. CLARK:  Right.
 22              MR. CARSON:  And, therefore, I assume
 23  there would have been freedom to contract for more
 24  users had you determined it was necessary.  Is that
 25  accurate or not?
 26              MR. CLARK:  That would be accurate, but

                                                   PAGE 88
  1  the example we were trying to point up is that the
  2  in-class instruction on how to use the database is
  3  more comparable to a fair use of it.  It is not
  4  using its intellectual property for the content but
  5  showing the students how to use it -- now, when you
  6  go to the reference area, this is how you do it.
  7  But if they can't access it while they're in class,
  8  they're losing real time because there are already
  9  too many users in the reference area on the
 10  database.
 11              MS. GOSLINS:  And then my last point is
 12  actually a different question but it's based on the
 13  last bullet point.  The suggestion was interesting
 14  to me of using circumvention measures such as proxy
 15  servers to gain access for remote students who would
 16  not otherwise have access, and it's great to hear
 17  that because I asked the question to another panel
 18  about in what instances now under the state of the
 19  laws that exist now in which it's not criminal to
 20  circumvent access control protections are libraries
 21  being forced to either circumvent these access
 22  controls or forego what they consider a fair use.
 23  And I think I phrased the question wrong because
 24  nobody wanted to admit to circumventing anything
 25  because I was going to make a citizen's arrest or
 26  something.

                                                   PAGE 89
  1              But putting it on the table that you're
  2  not confessing to anything, it would be very helpful
  3  for me to know from the functioning librarians in
  4  the group what situations you currently find, given
  5  that access controls are around and have been around
  6  already for a little while, you find it necessary to
  7  circumvent these kind of controls in order to make
  8  what you consider fair uses of the work.
  9              MR. CARSON:  And we know you won't be
 10  doing it after October -- don't worry about it.
 11              MS. VOGELSONG:  Clearly, it's the same
 12  situation.  Most of the databases that we acquire
 13  are run off a campus server and are identified by IP
 14  address or it could be password, and the only way
 15  our users, who increasingly work from home or even
 16  campuses that are not adjacent to our main campus,
 17  even though we've licensed for that number of users
 18  or to accommodate them, can reach those databases
 19  and is to resort (in my particular case, on a
 20  consortium-wide university basis) to using proxy
 21  servers to help provide access to those materials.
 22  I don't think any of the people we're licensing
 23  products from have any problem with that, but it, as
 24  I read the provision, would technically be a
 25  circumvention.
 26              MS. SOULES:  You're looking to me now, I

                                                   PAGE 90
  1  can see.  I think the difficulty here is -- well, in
  2  one of my examples, when I'm talking about vendors
  3  who say, well, you can use this for teaching but you
  4  can't use it for research.  How is a faculty member
  5  or a Ph.D. student or an MBA or even a BBA student
  6  supposed to make such a distinction?  It gets
  7  tougher and tougher as you get up through the higher
  8  education ladder, you know, once you get to Ph.D.
  9  And if you're a faculty member and you're in an
 10  institution like the University of Michigan, whose
 11  primary mandate is research and secondary mandate is
 12  teaching, how do you  make the distinction?
 13  Besides, the one feeds on the other.  You're sitting
 14  there and you're saying, well, I'm preparing this
 15  class but, you know, I was doing this research and I
 16  need to find out XYZ, and then they find that out
 17  and think, hey, I can put that in my class.
 18              I mean life is synergistic, seems to me,
 19  and I'm sure that all of us do that.  I mean I learn
 20  things from reading the New Yorker, for example,
 21  that I bring to work as a librarian in a business
 22  library, which you wouldn't necessarily think would
 23  happen.  I mean there are synergies taking place
 24  and, in deed, your life is seamless.  You don't
 25  compartmentalize it to the extent that you make
 26  decisions that this is for a class, this is for a

                                                   PAGE 91
  1  project, this is for research, this is for teaching.
  2              And some of it comes from the fact that
  3  vendors, some of the vendors I deal with have not
  4  perhaps dealt with the academic market before and
  5  don't understand how it works and, of course, it
  6  becomes part of my job, at any rate, to try to
  7  educate them about that.  But there have been
  8  occasions where vendors have been quite recalcitrant
  9  about these things and have been extremely insistent
 10  that it's only to be used for this narrow purpose.
 11              How am I going to help anybody, my
 12  students, my faculty, to understand when they can
 13  use it, when they can not, and how are they going to
 14  continue to do their work and really learn from this
 15  synergistic environment when those kind of
 16  restrictions are put on?
 17              MS. GOSLINS:  And in those situations,
 18  do you find yourself in a situation where you have
 19  to actually circumvent the access control
 20  protections that these database owners or publishers
 21  put on their works or do you try and forego those
 22  uses?
 23              MS. SOULES:  It's always been an ad hoc
 24  case-by-case basis.  Okay.  I'm thinking of one
 25  example in the past where we had a vendor who was
 26  quite insistent on a database being used only for

                                                   PAGE 92
  1  certain purpose and, as a result, a library in
  2  California actually put up a posted sign.  I'm
  3  talking about posterboard right next to the
  4  computer.  I'm not talking about anything
  5  electronic. It explained this in their choice of
  6  words to their patrons walking in the door.  We
  7  didn't have remote access in those days.  And the
  8  vendor representative happened to be visiting the
  9  library, saw the sign, didn't like it.  Next thing
 10  you knew, the contract was canceled and they were
 11  not allowed to use the database at all.  It was
 12  taken away.  And the end result was they had to get
 13  their own institutional lawyers to go to bat for
 14  them in order to have it restored.
 15              MS. PETERS:  That sounds more like a
 16  contract issue than an issue of a technological
 17  protection measure that a content provider adds to
 18  his work in order to restrict access, like
 19  passwords.  So I guess this really runs through a
 20  lot of when I hear you can't separate access from
 21  use in a lot of the comments.
 22              MS. SOULES:  That's right.
 23              MS. PETERS:  But I guess my question has
 24  to do with in many ways, isn't it really the terms
 25  of the contract that you're having great difficulty
 26  with as opposed to an access control?  I mean there

                                                   PAGE 93
  1  isn't access control #1 for teaching, access control
  2  #2 for research, and when I go into the database, I
  3  hit teaching and then when I go to do research, I
  4  hit a different one.  Isn't it really the contract
  5  itself that has the restrictions?
  6              MS. SOULES:  May I ask a question back?
  7              MS. PETERS:  Oh, sure.
  8              MS. SOULES:  I guess my question back is
  9  technically I think you're quite right.  It is a
 10  contract issue.  There's no doubt about that.  But
 11  what I'm concerned about here is -- well, I guess
 12  I'm concerned about two things.  First of all, I
 13  don't know how to separate them out any more.  I get
 14  a contract that tells me I don't have fair use
 15  rights.  The vendor says, well, tough petuties, you
 16  don't get them.  That vendor perhaps is the sole
 17  source provider of information that my faculty and
 18  students need.  I don't think I should have to go
 19  back time and time again and argue for my fair use
 20  rights.  So I feel that I would have to circumvent
 21  technologically in order to exercise that fair use
 22  right to allow a student or a faculty member to cite
 23  from that work in order to do what he or she is
 24  doing.
 25              MS. PETERS:  Okay.  Take your example.
 26              MS. SOULES:  Okay.

                                                   PAGE 94
  1              MS. PETERS:  You wanted access to the
  2  work, you resent tremendously that it says you can't
  3  do what you believe to be fair use.  If you sign the
  4  contract, you then have, quote, "access to the
  5  work."  Isn't it separate from the gaining of that
  6  access how you use that work and whether or not that
  7  use violates your contract?
  8              MS. SOULES:  Well, the truth is if the
  9  vendor has total control over the content and will
 10  only give you use of that content under restrictions
 11  entirely controlled by the vendor -- I'm back to my
 12  balance issue again -- and that's all the vendor
 13  will give you, then you have two choices.  You can
 14  sign the contract and completely give up all your
 15  rights to fair use and everything else, or you have
 16  to go without that information.
 17              MR. CARSON:  Here's the problem I think
 18  we're having though.  I could agree with everything
 19  you've said up until now, and I agree with a good
 20  deal of what I've heard, but I don't think
 21  technological protection measures are so
 22  sophisticated that they can detect the nature of the
 23  use you're engaging in and shut you out when it's
 24  for teaching and not when it's for research or vice
 25  versa.  You may have a very valid point about the
 26  contractual restrictions that are being imposed upon

                                                   PAGE 95
  1  you.  It doesn't sound to me like it has anything to
  2  do with technological measures that restrict access.
  3  You either have access or you don't in terms of the
  4  technology.  You've got contractual restrictions
  5  that say you don't.  What am I missing?
  6              MS. SOULES:  I listened to testimony
  7  this morning where a gentleman was talking
  8  futuristically at your request about the things that
  9  they're going to put into place.  I can assure you
 10  those technological capabilities are going to be
 11  here long before three years is up.
 12              MR. CARSON:  Sounds like science fiction
 13  to me, but I need more than your word for it, I
 14  think, to take it seriously.
 15              MS. SOULES:  Okay.  What do you think?
 16  You're the IT guy here.  I'm really being mean now.
 17              MR. PETERSEN:  I was waiting for that
 18  question, IT guy, because that's the danger of being
 19  with the Office of Information Technology, even
 20  though I'm really a lawyer by training and the like.
 21  One of the things that occurs to me -- and again, I
 22  hate to keep harping on this relationship with the
 23  UCITA experience and the contract issue, but we had
 24  grave concerns during those debates about the issue
 25  of self help and the ability, and I think a lot of
 26  the focus here is on these negotiated licenses that

                                                   PAGE 96
  1  are going to kind of be centrally controlled and
  2  turning them on or off is going to be kind of
  3  centrally managed whereas I think the reality is in
  4  the very near future we're not going to have central
  5  access to everything, that we're going to have
  6  individuals buying their e-books or their textbooks
  7  or their computer software, and so those
  8  technological measures are going to be on the
  9  computer, on the work station.
 10              And so I think there's a very fine line
 11  and I anticipate there'll be a relationship of how
 12  technological measures are used, A) to enforce the
 13  contract and, B) to possibly eliminate the access
 14  altogether.  And that's an issue I think that can --
 15  and by the way, in Maryland, the self help
 16  provisions, that was one of the significant
 17  amendments wherefore those mass market purchases,
 18  which would be the individual faculty, staff member,
 19  student, self help was not an option, and so we're
 20  happy to know that hopefully won't affect us.  It
 21  may affect other people.  So it's a fuzzy
 22  relationship and I think we will begin to see that
 23  as a management control, not necessarily just at the
 24  digital library level, but at the individual work
 25  station information access level.
 26              MS. GOSLINS:  I just have another brief

                                                   PAGE 97
  1  question for Ms. Soules.  I just wanted to clarify.
  2  You mentioned in your testimony that vendors require
  3  your library to maintain print in addition to
  4  electronic formats, and I'm just curious as to why.
  5  Do you know why that is?
  6              MS. SOULES:  Well, I can speculate,
  7  although I suspect you should ask publishers about
  8  that.  But I suppose my speculation would be along
  9  the following order.  First of all, I think some of
 10  it is fear.  They're afraid that they will lose
 11  their revenue stream.  I think that's one reason.
 12              MS. GOSLINS:  Wouldn't it just be
 13  substituted?  You're paying for the electronic
 14  version instead of the print version?  The reason
 15  that I'm focusing on this is we've heard the
 16  opposite.  We've heard there's strong fear that all
 17  media formats are going to move to electronic and
 18  then people will not have any print backups from
 19  which they can make fair uses or which they can
 20  archive and preserve.  So it was just interesting to
 21  me to see the opposite, to see a publisher-initiated
 22  opposite result occurring in your library.  So I
 23  just wanted to know a little more about that.
 24              MS. SOULES:  Well, first of all, I think
 25  there is a fear that eventually there will be
 26  electronic -- first of all, I should say there

                                                   PAGE 98
  1  really are three categories of journals now.  There
  2  are print ones, there are electronic ones, and then
  3  there are ones where it's available in both formats.
  4  But in cases where the campus at large has
  5  negotiated licenses with -- I can think of three
  6  publishers now, they have required us not only to
  7  maintain print, they have also required us to
  8  guarantee that over a certain length of time of the
  9  contract -- two years, three years -- we will not,
 10  we will agree not to cancel journals if we find that
 11  they are not -- let's say I decide I don't need
 12  journal X any more.  It's not being used or whatever
 13  reason.  I'm not going to be able to cancel it.
 14  Usually, what happens is you find that the way they
 15  price it, and pricing models, as the gentleman
 16  mentioned this morning, there are going to be
 17  experimentations of the pricing models all over the
 18  place. But the reality is that when you get a
 19  pricing model, generally what they do is they'll
 20  charge you so much for one format and then you get a
 21  discount on the other format.  But the reality is if
 22  you just want the electronic format and not the
 23  print format, the price is out of reach.  So you end
 24  up signing a contract where you guarantee you will
 25  keep the print.
 26              I have always thought that some of it

                                                   PAGE 99
  1  was based on fear of loss of revenue stream.  Also,
  2  I think some of it has to do with the fact that
  3  there are some environments where print is really
  4  what the customer wants and they can only make that
  5  print fiscally viable if there are sufficient copies
  6  sold, and I think that's perhaps another driver.
  7  But I'm saying that with the caveat that it's a
  8  question the publisher preferably should be
  9  answering for you.
 10              MS. GOSLINS:  And does that not allay
 11  any of your fair use fears?
 12              MS. SOULES:  Not in the slightest
 13  because I can't --
 14              MS. GOSLINS:  Even though you will
 15  always have the physical version.
 16              MS. SOULES:  Well, first of all, I don't
 17  think I always will have the physical volume.  And
 18  secondly, don't forget in one sense, strange as this
 19  may seem, part of these package deals force me to
 20  aggregate my selection rights.  Let's say I have a
 21  publisher and the publisher has 50 journals and he
 22  makes available an electronic version in a package
 23  deal.  The truth is I may only carry certain ones of
 24  those in print form, but I'm required to keep those
 25  on.  I have to take on the rest of the other 50, but
 26  I have to keep the others on.  I may not need all 50

                                                   PAGE 100
  1  of them in my particular library setting.  So I
  2  usually have to take them all though, and then I
  3  have to guarantee that I won't cancel the print.
  4              Well, let's say I have 20 of them in
  5  print form.  So I get 30 that would only be in
  6  electronic form because I never carried them in
  7  print before, and I have the remaining 20 in both
  8  electronic and print form.  But the truth is I need
  9  maybe three or four of them, those core ones, in
 10  both print and electronic form but I really don't
 11  need the other ones in both print and electronic
 12  form and, in my ideal world, I would choose which
 13  format I wanted.  But I aggregate that in order to
 14  get the contract for the electronic.  It sounds a
 15  little confusing.
 16              MS. GOSLINS:  I think I understand.
 17              MS. SOULES:  Thank goodness I've made
 18  something clear to you.
 19              MS. GOSLINS:  I'm done with my
 20  questions.
 21              MS. PETERS:  Okay.  Charlotte.
 22              MS. DOUGLASS:  I just have a couple of
 23  general questions.  Yesterday we heard about -- on
 24  applicability of fair use to 1201(a)(1) in terms of
 25  there being a distinction between non-infringing
 26  uses and fair uses, and on a certain level you can

                                                   PAGE 101
  1  see that because there are specific non-infringing
  2  uses in 108, 109, specific narrow fair uses --
  3  narrow non-infringing uses rather -- and then fair
  4  use is a different kind of quantity because the
  5  determination might be made after the fact that
  6  something is or is not infringing.
  7              So my question is, how do you respond to
  8  the statement that fair use does not apply to the
  9  anti-circumvention part of our deliberations, that
 10  we're really talking about non-infringing uses and
 11  perhaps licensed use?
 12              MS. SOULES:  Can I ask a question and
 13  ask how are those distinctions made between fair use
 14  and non-infringing use?
 15              MS. DOUGLASS:  Fair use, some people
 16  say, is something that a court has to decide.  First
 17  of all, you have to decide it's infringing and then
 18  the court has to decide, based on applying the
 19  factors.  So I'm just asking whether you agree that
 20  fair use is not at issue but we're really talking
 21  about non-infringing uses and we're talking about
 22  perhaps licensed use.
 23              MR. PETERSON:  The reaction I have to
 24  that statement is that perhaps the way it's -- and I
 25  think it's referred to in the notice as non-
 26  infringing uses comma including fair use, because --

                                                   PAGE 102
  1  and I see this in my education and discussion of
  2  what fair use is.  I used the word exemptions
  3  because in education we have many exemptions above
  4  and beyond fair use.  So I guess that would be the
  5  distinction I would make is that fair use is
  6  probably the preeminent issue, but there are many
  7  more non-infringing uses like the face-to-face
  8  teaching, etcetera, that we would want to equally
  9  preserve.
 10              MS. VOGELSONG:  I would also say that,
 11  although fair use is technically a defense, that
 12  very few educators understand it as such and, in
 13  fact, that the way it is taught at our institutions
 14  is that we teach people - or try to teach people -
 15  to make that analysis before they make the use, so
 16  it seems appropriate.
 17              MS. DOUGLASS:  I guess another question
 18  that I have is I know you have given some specific
 19  examples of where you feel there has been an adverse
 20  effect.  Do you feel that those adverse effects are
 21  because of the anti-circumvention provisions or
 22  could those adverse effects be for some other
 23  reason?  The adverse effects that you mentioned.
 24              MR. CLARK:  I think we feel that most of
 25  them are.  I've been thinking about this since we
 26  were talking about access and use and trying to

                                                   PAGE 103
  1  think of the problem a little differently, and this
  2  may have a bearing on the examples, too.  There were
  3  a couple of key sentences when we got to that point
  4  related to sometimes access and use provisions or
  5  security measures being inextricably bound together
  6  sometimes.
  7              There's a question, and I think a real
  8  concern, among educators here.  I know I have a
  9  concern that there may be semantic differences which
 10  will reach the stage of legal actions when some
 11  things are done in the name of fair use.  When we're
 12  talking about access, for example.  My institution
 13  buys an image database, to go back to that one.  We
 14  have access to it in the form it's in.  Now, if we
 15  want to do some of the manipulations that we
 16  mentioned in the example of taking the images out
 17  for using them as source material and designs or
 18  comparative side-by-side, that sort of thing, yes,
 19  that's copying if they're removed from the database.
 20  That could also be considered another level of
 21  access.  Oh, your license didn't provide that sort
 22  of access.  Your access is the database.  Why are
 23  you removing them from the database?   That involves
 24  at least semantically what could be called access
 25  before you get to copy it.  And it's sort of, I
 26  guess, along the lines of the problem that we've had

                                                   PAGE 104
  1  to sort out with computer software and making a
  2  transient copy to be able to read it, whether it's
  3  off the Internet or somewhere else on the network,
  4  whether that qualifies as an actual copy or not.
  5  Even though that may not be completely an access
  6  issue, there's a semantic issue in there that had to
  7  be cleared up.
  8              MS. VOGELSONG:  Just to elaborate on a
  9  different example, I was concerned this morning to
 10  hear the gentleman from the recording industry talk
 11  about a Phase 2 technology which would require
 12  different equipment to operate.  Well, if you are an
 13  educational media center and you invest in Phase 1
 14  technology and the accompanying software, what do
 15  you do when Phase 2 comes in the door and you're
 16  expected to deliver it to a class and you have a
 17  lawfully acquired copy of that content?
 18              MS. DOUGLASS:  So you consider access or
 19  do you consider access to be more than initial
 20  access, maybe access --
 21              MS. VOGELSONG:  Subsequent access, as
 22  well.
 23              MS. DOUGLASS:  -- re-access.
 24              MR. PETERSON:  And one of the topics
 25  that's come up a lot here that troubles me, and I'm
 26  trying to think it through, is this notion that,

                                                   PAGE 105
  1  again, it's hard to separate when it's an access
  2  control issue versus a licensing issue.  But in the
  3  absence of a contract term dealing with this, what
  4  happens when you don't renew a subscription and what
  5  about the access to past issues?
  6              I mean I can think of many examples.  In
  7  fact, when I came to the University of Maryland in
  8  1992, we were going through severe state budget
  9  crises and so our library discontinued subscriptions
 10  to certain journals and one that some of us might
 11  have interest in is the Journal of College and
 12  University Law.  I guess I was probably one of six
 13  people on the campus that looked at it, and they
 14  said let's stop the subscription.  Well, that 1992
 15  and in my research over the past 10 years, I've many
 16  times had to go back to that area of the stacks and
 17  access those old editions of the Journal of College
 18  and University Law because they're there and I can
 19  do that.
 20              What concerns me is that if those were
 21  licensed or available only online and in 1992 we
 22  couldn't afford to pay the subscription, the adverse
 23  impact is I don't have access to those prior issues.
 24              MS. PETERS:  Isn't that an issue for
 25  every library, I mean, in the world?
 26              MS. SOULES:  Probably.

                                                   PAGE 106
  1              MS. PETERS:  And the question s, how do
  2  you make sure that at least someone preserves it or
  3  someone is going to be able to provide access, and
  4  that would be true whether or not there ever was a
  5  1201 or an issue with regard to access.
  6              MR. PETERSON:  Well, the other
  7  observation I have, and this is probably where I'm
  8  an outsider as a non-librarian, but this whole
  9  preservation access issue, which I know there was a
 10  lot of discussion about yesterday and may not be
 11  directly  relevant to the rulemaking, is a
 12  fundamental issue.  And I think it goes to my
 13  concern about what I called the commercialization of
 14  information or maybe even the privatization.  The
 15  one thing I do value about the libraries is that
 16  preservation and access role, that I know I can go
 17  to our library on campus and find that prior
 18  edition.
 19              But when that process is taken over and
 20  controlled through technological means by some third
 21  party who may or may not be around or may or may not
 22  have the incentive to preserve every single edition,
 23  only the ones that have some economic value, that
 24  concerns me a lot.
 25              MR. KASUNIC:  I have a couple of
 26  questions, and I guess mostly just in general to

                                                   PAGE 107
  1  anybody or everybody.  But we have some fairly
  2  specific requirements in terms of what evidence that
  3  we have to find here and there are some specific
  4  statements in the legislative history that evidence
  5  that is speculation or conjecture is just not
  6  sufficient for findings in this area.  I noticed as
  7  I was going through some of the examples that were
  8  cited in the statements as we went along and the
  9  words being used in many instances are "could" and
 10  "may" and I'm just trying to find out: are there
 11  some specific instances of some of these different
 12  areas -- I guess there's a couple -- where there are
 13  specific classes.  I know there's some carryover and
 14  it's sometimes difficult to, that this could affect
 15  and may affect a lot of different works -- but are
 16  there specific classes of works? And, if you'd help
 17  define what that term is, that would be helpful as
 18  well. One thing that was mentioned was where access
 19  measures blend and bind inseparably access and use
 20  controls.  Let's, I guess, start with that.  Are
 21  there any specific works or specific classes of
 22  works where these access and use controls are being
 23  bound inseparably where it's having an adverse
 24  effect?
 25              MR. CLARK:  I don't know, apart from
 26  getting to at least the substantially arguable case

                                                   PAGE 108
  1  of the DVDs again.  I haven't got wide enough
  2  experience to know if there are.  I think part of
  3  our concern though is that because if these things
  4  develop in the intervening period between reviews,
  5  that sort of puts educators at a disadvantage until
  6  they're next brought up because the market is
  7  changing, the technology is changing so rapidly that
  8  these things can come up.
  9              MS. VOGELSONG:  When we first started
 10  using digital image databases like Corbis we had
 11  very restrictive access to them and then it changed.
 12  We started out talking about AMICO and we were going
 13  to use a particular example from that database and
 14  we realized that they had readjusted their format
 15  since we had started writing this testimony, and so
 16  it's just a constantly changing picture for
 17  educators, and I think that's some of our concern.
 18  To name a class of works when the structure, the
 19  composition, the range of these databases and
 20  conglomerate formats is changing month to month.
 21  And so it's hard to pin something on a particular
 22  class, and I think that is part of our concern here.
 23  Given what we've seen in recent history, we have
 24  great concern that the access can change
 25  substantially over a short period of time.
 26              MS. SOULES:  It can also change -- it

                                                   PAGE 109
  1  was interesting listening to the gentleman this
  2  morning talking about CDs, and I realize he was
  3  talking about music, but I have banks of CDs in my
  4  library.  He said, well, they were a few years old.
  5  But the reality is I had some CDs that were close to
  6  25 years old and he was quite right in saying that
  7  they weren't all that reliable.  The truth is, you
  8  want to talk about technological measures, they're
  9  totally unreadable today.  There isn't a piece of
 10  equipment that will allow them to be read.  You just
 11  take them out to the trash dump.  That's it.
 12              And I think that's one of the issues
 13  that takes us back to archiving.  You're talking
 14  about classes of works, and I realize I'm talking
 15  about formats, so I know that.  But the reality is a
 16  technological measure is actually a format in
 17  itself.  If you issue it in a book, a printed book,
 18  that is a form of technology and I'm sure in days of
 19  -- scrolls they looked at books and thought, oh,
 20  what is this new thing?  A CD is a technological
 21  measure.  A 16 BPI tape is a technological measure
 22  in itself, and maybe we not only have a linking of
 23  access and use and content, we also have embedded in
 24  there format in itself because they turn over so
 25  rapidly.
 26              I certainly agreed with the gentleman

                                                   PAGE 110
  1  this morning when he said CDs would be around in
  2  three years.  I don't know how readable they'll be,
  3  but they'll be around in three years.  But also
  4  there will be new formats and we'll need to be able
  5  to read them.  And I think that's why we haven't
  6  really relied on CDs and various other types of
  7  electronic formats at this point as an archiving
  8  medium.  We still use the microform and so on and so
  9  forth because we know it's going to last.  So in a
 10  sense, I look at format as a form of technological
 11  measure in itself.
 12              So when you're talking about classes of
 13  works, you asked about how to define it, but that
 14  adds a new spin to me.  I realize that isn't the
 15  traditional sense of a class of work, nonfiction or
 16  fiction or whatever it is, but I think unfortunately
 17  we've also got this blending of format that's rather
 18  determining a class of work.  So I'm sitting around
 19  saying, well, are CD-Roms a form of class of work
 20  and how am I going to have access to the information
 21  on it having, of course, already had to throw out
 22  some because they're unreadable.  I don't know if
 23  that helps any or makes it just worse.
 24              MR. KASUNIC:  I do understand the
 25  argument, although the specific example is of a past
 26  specific case and where, at the time, there wasn't

                                                   PAGE 111
  1  any access control measure. And that work could have
  2  been archived because he did have access to that
  3  work. He could have made at tape at that time.  So
  4  we're concerned with right now -- and we certainly
  5  understand the concerns of not knowing what's going
  6  to come up, but Congress did anticipate that and
  7  that's why we'll be back in three years.
  8              MS. SOULES:  I can't wait to see you
  9  again.
 10              MR. KASUNIC:  But different things can
 11  occur in that the market will change.  But aside
 12  from this inseparable binding, what specific works
 13  have been adversely affected? There was also some
 14  mention that there were specific works that were
 15  sole sources and only available in electronic format
 16  and with these access control measures.  So if you
 17  could cite some specific examples of these sole
 18  source works in which there's no other source and,
 19  again, inconvenience is not --
 20              MS. SOULES:  Understood.
 21              MR. KASUNIC:  -- an issue, but whether
 22  it's just available in some other source.
 23              MS. SOULES:  Well, the kind of
 24  electronic information I buy for a business library
 25  comes, as I tried to say in my testimony, vendors do
 26  different things.  Some are aggregators.  They put

                                                   PAGE 112
  1  information together and I have, for example,
  2  financial databases where they get raw data from
  3  various places all over the world and it comes in
  4  and it's fed in and they're the only ones who get
  5  that.
  6              I have a database, for example, that
  7  presents information country-to-country-to-country,
  8  and they have people out there and they're not just
  9  an aggregator.  They are a creator of information.
 10  They have people in those countries gathering data
 11  and they have people in those countries actually
 12  translating some of it into the English language so
 13  that when you get the database, on that database you
 14  have aggregated information, original research
 15  information, you have translated information.  I'm
 16  not going to be able to get that information for my
 17  customer from anyone other than that particular
 18  source.
 19              I have databases where, as we've talked
 20  earlier, they're essentially a compilation of
 21  journals that are in electronic format, some only,
 22  some also in print.  So again, I'm not sure if I'm
 23  helping here or making things worse, but I have a
 24  lot of sole source vendors and they can dictate
 25  whatever terms they like.  So from that point of
 26  view, I do get concerned about balance.  What you've

                                                   PAGE 113
  1  come back and told me earlier is that you don't see
  2  contractual issues as inextricably linked with these
  3  anti-circumvention regulations as I do is
  4  essentially where we're at, I think.
  5              But from my day to day experience, I can
  6  only tell you that I find myself functioning in a
  7  world where I have fewer and fewer controls, fewer
  8  and fewer abilities for fair use rights and things
  9  of that sort.  But if that is not your purview, then
 10  that is not your purview but in terms of classes of
 11  works, I mean databases are not all the same.  And
 12  I'm guilty of this, too.  I come and I talk to you.
 13  I say database this and database that and database,
 14  database.  But they're not all the same and, in
 15  terms of a class of work, there's original work,
 16  there's aggregated work, there's translation work,
 17  and it's all muddled together which is, of course,
 18  the heart of our problem, I think, generally.
 19              Is this helpful or problematic?
 20              MR. KASUNIC:  Yes.  And the access
 21  controls there are limiting your ability to make the
 22  non-infringing use? Because you mentioned that
 23  licenses are dictating the terms.  Is it the
 24  technology that's dictating the terms or the
 25  licensing agreement?
 26              MS. SOULES:  Well, you see, I don't see

                                                   PAGE 114
  1  them as separate.  That's the difference between us,
  2  because in my day to day world, if my customers can
  3  not get the information and I am no longer able to
  4  provide it in such a way that they can have fair use
  5  rights, as far as I'm concerned, some right has been
  6  abrogated somewhere.
  7              MR. KASUNIC:  Maybe if I put it this
  8  way.  If you were to breach the licensing agreement,
  9  is there then some measure that, technologically, is
 10  stopping you from accessing the work?  I'm just
 11  trying to understand --
 12              MS. SOULES:  If you're talking
 13  technologically today, probably not.  I don't expect
 14  that to be true for much longer, as I said earlier.
 15  Then I went and deferred to Rodney, like the coward
 16  I am.
 17              MR. PETERSON:  The only thing to add,
 18  and I understand this problem of dealing with a
 19  specific notice of rulemaking issue versus the
 20  broader issues, but I see it, I think, similarly.
 21  It's part of an arsenal, and I hate to put it in war
 22  type terms, but access control measures, just like
 23  self-help provisions and negotiated agreements,
 24  limiting fair use, all of those things build up in
 25  ways that can limit access and really make it
 26  difficult in the process of negotiations.  So this

                                                   PAGE 115
  1  is just one more means.
  2              MR. KASUNIC:  Are there any other
  3  instances?
  4              MR. CARSON:  I think just about everyone
  5  who's testifying right now, either in your prepared
  6  statements or your responses to questions, has
  7  expressed some frustration with and perhaps even
  8  objections to the requirement that we restrict
  9  exemptions only to certain classes of works.  Let me
 10  suggest that at least the frustration is shared by
 11  some people on this side of the table.
 12              Nevertheless, I guess my view is that is
 13  what the statute says and, starting from that point,
 14  is there anyone here who is asking us to ignore that
 15  pre-requirement and, if you're not asking us to
 16  ignore it, elaborate on how you expect us to deal
 17  with it.
 18              MS. SOULES:  Is it possible for you to
 19  suggest an exemption to all classes of works?
 20              MR. CARSON:  I wouldn't be the first to
 21  suggest it, but I would suggest --
 22              MS. SOULES:  Well, there are political
 23  realities that we all face, I guess, but from my
 24  point of view, perhaps the question is being -- I
 25  understand the question, unfortunately, but I think
 26  that's where I am, that it really needs to be all

                                                   PAGE 116
  1  classes of works.
  2              I understand that testimony was given
  3  earlier by Peter Jaszi and that testimony will be
  4  given tomorrow by Arnie Lutzker, and I think they're
  5  the people who may well be able to address this
  6  question more effectively for you than those of us
  7  sitting here because they're the ones who framed
  8  some of this in the first place, as I understand it.
  9  So I'm suggesting you go to the sole source.
 10              MR. CARSON:  If I can translate, perhaps
 11  what I'm hearing is you're the folks who are telling
 12  me what the problem is and the solutions you'd like
 13  to see and perhaps people like Peter and Arnie are
 14  the people who can try to give me the legal
 15  framework to do what you're asking.
 16              MS. SOULES:  I'm certainly hoping so
 17  because -- well, he's a lawyer, but I'm not a
 18  lawyer.
 19              MR. PETERSON:  Two arguments I would
 20  make.  One is echoing what was said yesterday, is
 21  that the extent to which the focus can be upon the
 22  use of the work is certainly my preference and my
 23  comments today tried to emphasize those two
 24  questions because those are what are important to us
 25  in terms of who we are and how we use them.
 26              The second issue, however, though that

                                                   PAGE 117
  1  goes more to this class of works issue.  One of the
  2  reasons it frustrates me, too, to have that in the
  3  legislation is it's the kind of complexity that's
  4  been brought to some of the distance education
  5  issues where they've tried to slice up what kinds or
  6  classifications of work you can and can not use, and
  7  it creates mass confusion, quite frankly.  And so
  8  the extent to which we could focus less on classes
  9  of use and make all of them game and focus on how
 10  they're used, that is the framework within which I
 11  think it's easier for me to educate my faculty and
 12  my students and for me to understand what the rules
 13  are.
 14              MS. PETERS:  Distance education was much
 15  easier because they use the statutory
 16  classification, and then the question is why?  Why
 17  are some in and why are some out?  This is a much
 18  more difficult exercise.
 19              MS. SOULES:  You know as well as I do,
 20  you go back through the law and what happened was
 21  you started with something very simple and, as new
 22  formats of work were created, they kept being added
 23  to the copyright law, and I suppose I'm having
 24  difficulty understanding why we now want to separate
 25  them all out again.
 26              MS. PETERS:  Because it's an exemption.

                                                   PAGE 118
  1  Because you craft an exemption as narrowly as is
  2  needed.  What you're all saying is where we sit,
  3  it's all classes of works and you should be focusing
  4  on the use.  Unfortunately, that's not the way the
  5  task was crafted.  But I guess we hear where you
  6  are.
  7              MS. VOGELSONG:  We liked Peter Jaszi's
  8  definition, incidentally.  I think ``lawfully
  9  acquired'' elements are certainly reasonable. It
 10  seems to me, if that can be considered part of a
 11  class component, it is a reasonable thing.
 12              MS. PETERS:  Are you saying that his
 13  definition works for you?
 14              MS. VOGELSONG:  Yes.
 15              MR. PETERSON:  Well, but one of the
 16  concerns I had in reading that -- it's back to this
 17  ownership versus licensing issue, and I think his
 18  language that was used was something about lawfully
 19  acquired.
 20              MS. PETERS:  His is lawfully acquired.
 21              MR. PETERSON:  Lawfully acquired copies,
 22  I think is the language he uses.  And I'm very
 23  concerned, having been through the UCITA experience,
 24  that that may be meaningless in a world where you
 25  don't own a copy.  You license the use.
 26              MS. VOGELSONG:  I guess I was assuming

                                                   PAGE 119
  1  that if you were licensing, it was lawfully
  2  acquired.
  3              MS. SOULES:  I don't feel I'm acquiring
  4  very much these days.  I think I'm just in my
  5  apartment now instead of in my house.
  6              MR. PETERSON:  Sounds like Peter's
  7  answer raises as many questions as it answers.
  8              MS. PETERS:  May be.  Almost everybody -
  9  - and some of us have jumped in.  On the CCUMC side,
 10  you expressed concern about paper use and that that
 11  would become a model, and I guess my question is do
 12  you perceive that as inherently unfair and, if so,
 13  why?
 14              MR. CLARK:  Well, inherently unfair
 15  because if the entire copyright law still applies,
 16  there are uses which are fair for which you don't
 17  have to ask permission and payment is a form of
 18  permission in the process.  I think there are some -
 19  - you know, I can only speak for myself and probably
 20  some of my colleagues and there are probably some
 21  larger issues, too, that I've been thinking about
 22  recently.  But it relates to restrictions that can
 23  be put within that framework of how things can be
 24  used once they're at
 25  -- that affect how, for example, these things which
 26  we refer to as cultural expressions that might be

                                                   PAGE 120
  1  used in teaching can be used in context and whether
  2  they can be put in contexts that are analytically
  3  unfavorable to them or whether they're going to be
  4  restricted in certain ways if there isn't this
  5  latitude for fair uses for teaching, research, and
  6  so on that are outside of the control of any
  7  individual vendor who holds copyright.  And we think
  8  that's important, too, at least I do and I know a
  9  lot of my colleagues do.
 10              And I think the other concern is not
 11  directly related \226 the one where we've been thinking
 12  about access and use and where the two may be
 13  confused and where licensing issues may be involved.
 14  To sort of reiterate, if I feel confident in the
 15  interpretation of this section that access, what
 16  access meant and that it didn't mean the things we
 17  could do with fair use that involve forms of
 18  playback or copying \226 that it  did not involve
 19  access in it at all -- I don't think we'd have a
 20  beef at all.  But there is a concern that it will be
 21  defined that way legally, by legal action, and also
 22  in terms of the way the software is constructed, as
 23  a basis for a legal argument.
 24              We might even go over -- I was following
 25  for a while, I think it was in the early stages, the
 26  Microsoft case.  One of the arguments talked about,

                                                   PAGE 121
  1  you can look at this philosophically, Internet
  2  Explorer, is it or is it not a part of the operating
  3  system?  The way it's been constructed recently,
  4  yes, it is.  It's inextricably bound and it's part
  5  of it and you separate the two and there may be
  6  functional problems.  Of course, on the other side
  7  of the brain, another part of you says that, yes,
  8  but there are two different functions there.  I get
  9  the operating system and get the one I choose so
 10  that I can exchange as many applications with
 11  colleagues as possible and get as many as I want,
 12  but the application is what I really want.  And I
 13  recognize there's an application bound in that base
 14  which is technically part of it and you can look at
 15  one way philosophically, but I know also that they
 16  don't have to be part of each other.  They're two
 17  different things.  And there's some fear that this
 18  same thing will occur with the interpretation of
 19  access versus use.
 20              MS. PETERS:  One last question.  I'm
 21  going to follow up on something that Rachel asked to
 22  make sure I've got it right.  Today the prohibition
 23  on breaking access controls by individuals is not in
 24  effect, yet there are access controls on many
 25  different products.  What I think I heard you say is
 26  you're not aware of anyone breaking access controls

                                                   PAGE 122
  1  at this point.  Is that right?
  2              MR. CLARK:  Except for DVD, because
  3  there wouldn't be a case in court if it weren't
  4  considered that, or they wouldn't have a good case
  5  if it weren't considered that.  And I guess this has
  6  to do with the DVD being encrypted and designed to
  7  be played on certain players.  Playing it on Linux
  8  meant that wasn't authorized.  That's an access
  9  issue.
 10              MR. PETERSON:  So if there were an
 11  exemption, it would basically allow you to do what
 12  you are authorized to do today.  I mean it's the
 13  same kind of thing.  So what you're saying is things
 14  like the DVD would be the things that you would be
 15  interested in.  Is that right?  Or there's new
 16  things coming on the market that are going to cause
 17  you to have similar types of problems?  Anyone?  I
 18  see shaking heads.
 19              MS. VOGELSONG:  I think generally what
 20  we found is in the case of image databases that they
 21  were causing problems.  We've been able to negotiate
 22  or the market has sort of driven some of the
 23  producers to alter their formats or people just
 24  aren't attempting
 25  to do it.  They're just not making those uses of
 26  those materials.

                                                   PAGE 123
  1              MS. PETERS:  Anyone else?  If not, thank
  2  you very much.  And for those who are in the
  3  audience, we'll be back tomorrow at 10:00.
  4              (Whereupon, the afore-mentioned
  5  proceedings were concluded at 3:40 p.m.)