[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 
               PEER-TO-PEER PIRACY ON UNIVERSITY CAMPUSES
=======================================================================

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON COURTS, THE INTERNET,
                       AND INTELLECTUAL PROPERTY

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 26, 2003

                               __________

                              Serial No. 2

                               __________

         Printed for the use of the Committee on the Judiciary


    Available via the World Wide Web: http://www.house.gov/judiciary



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85-286                       WASHINGTON : 2003
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                       COMMITTEE ON THE JUDICIARY

            F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois              JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina         HOWARD L. BERMAN, California
LAMAR SMITH, Texas                   RICK BOUCHER, Virginia
ELTON GALLEGLY, California           JERROLD NADLER, New York
BOB GOODLATTE, Virginia              ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio                   MELVIN L. WATT, North Carolina
WILLIAM L. JENKINS, Tennessee        ZOE LOFGREN, California
CHRIS CANNON, Utah                   SHEILA JACKSON LEE, Texas
SPENCER BACHUS, Alabama              MAXINE WATERS, California
JOHN N. HOSTETTLER, Indiana          MARTIN T. MEEHAN, Massachusetts
MARK GREEN, Wisconsin                WILLIAM D. DELAHUNT, Massachusetts
RIC KELLER, Florida                  ROBERT WEXLER, Florida
MELISSA A. HART, Pennsylvania        TAMMY BALDWIN, Wisconsin
JEFF FLAKE, Arizona                  ANTHONY D. WEINER, New York
MIKE PENCE, Indiana                  ADAM B. SCHIFF, California
J. RANDY FORBES, Virginia            LINDA T. SANCHEZ, California
STEVE KING, Iowa
JOHN R. CARTER, Texas
TOM FEENEY, Florida
MARSHA BLACKBURN, Tennessee

             Philip G. Kiko, Chief of Staff-General Counsel
               Perry H. Apelbaum, Minority Chief Counsel
                                 ------                                

    Subcommittee on Courts, the Internet, and Intellectual Property

                      LAMAR SMITH, Texas, Chairman

HENRY J. HYDE, Illinois              HOWARD L. BERMAN, California
ELTON GALLEGLY, California           JOHN CONYERS, Jr., Michigan
BOB GOODLATTE, Virginia              RICK BOUCHER, Virginia
WILLIAM L. JENKINS, Tennessee        ZOE LOFGREN, California
SPENCER BACHUS, Alabama              MAXINE WATERS, California
MARK GREEN, Wisconsin                MARTIN T. MEEHAN, Massachusetts
RIC KELLER, Florida                  WILLIAM D. DELAHUNT, Massachusetts
MELISSA A. HART, Pennsylvania        ROBERT WEXLER, Florida
MIKE PENCE, Indiana                  TAMMY BALDWIN, Wisconsin
J. RANDY FORBES, Virginia            ANTHONY D. WEINER, New York
JOHN R. CARTER, Texas

                     Blaine Merritt, Chief Counsel
                          Debra Rose, Counsel
              Melissa L. McDonald, Full Committee Counsel
                     Alec French, Minority Counsel
























                            C O N T E N T S

                              ----------                              

                           FEBRUARY 26, 2003

                           OPENING STATEMENT

                                                                   Page
The Honorable Lamar Smith, a Representative in Congress From the 
  State of Texas, and Chairman, Subcommittee on Courts, the 
  Internet, and Intellectual Property............................     1
The Honorable Howard L. Berman, a Representative in Congress From 
  the State of California, and Ranking Member, Subcommittee on 
  Courts, the Internet, and Intellectual Property................     2
The Honorable Ric Keller, a Representative in Congress From the 
  State of Florida...............................................     6
The Honorable Zoe Lofgren, a Representative in Congress From the 
  State of California............................................     7
The Honorable Robert Wexler, a Representative in Congress From 
  the State of Florida...........................................     7
The Honorable Anthony D. Weiner, a Representative in Congress 
  From the State of New York.....................................     9

                               WITNESSES

Ms. Hilary Rosen, Chairman and CEO, Recording Industry 
  Association of America
  Oral Testimony.................................................    10
  Prepared Statement.............................................    12
Mr. Graham Spanier, President, the Pennsylvania State University, 
  Co-Chair of the Joint Committee of Higher Education and Content 
  Communities
  Oral Testimony.................................................    19
  Prepared Statement.............................................    20
Ms. Robyn Render, Vice President for Information Resources and 
  CIO, University of North Carolina
  Oral Testimony.................................................    24
Mr. John Hale, Assistant Professor of Computer Science and 
  Director, Center for Information Security, University of Tulsa
  Oral Testimony.................................................    27
  Prepared Statement.............................................    29

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable Howard L. Berman, a 
  Representative in Congress From the State of California, and 
  Ranking Member, Subcommittee on Courts, the Internet, and 
  Intellectual Property..........................................     4
Prepared Statement of Molly Corbett Broad, President, University 
  of North Carolina, and Co-Chair of the Legislative Task Force 
  of the Joint Committee of the Higher Education and 
  Entertainment Communities delivered by Robyn Render, Vice 
  President for Information Resources and CIO, University of 
  North Carolina.................................................    25
Prepared Statement of the Honorable Bob Goodlatte, a 
  Representative in Congress From the State of Virginia..........    53
Speech of Jack Valenti, President & CEO, Motion Picture 
  Association of America at Duke University, Durham, NC on 
  February 4, 2003...............................................    57
Letter From Marc Rotenberg, Executive Director, and Chris 
  Hoofnagle, Deputy Counsel, Electronic Piracy Information Center    60

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of the Honorable John Conyers, Jr., a 
  Representative in Congress From the State of Michigan..........    65
Letter From Jamie E. Brown, Acting Assistant Attorney General of 
  the U.S. Department of Justice.................................    67



















                        PEER-TO-PEER PIRACY ON 
                          UNIVERSITY CAMPUSES

                              ----------                              


                      WEDNESDAY, FEBRUARY 26, 2003

                  House of Representatives,
              Subcommittee on Courts, the Internet,
                         and Intellectual Property,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:05 a.m., in 
Room 2141, Rayburn House Office Building, Hon. Lamar Smith 
[Chairman of the Subcommittee] presiding.
    Mr. Smith. The Subcommittee on Courts, the Internet, and 
Intellectual Property will come to order.
    I am going to recognize Members for opening statements, and 
then we will proceed as quickly as we can to hear from our 
witnesses. And I will recognize myself first for an opening 
statement.
    ``The Congress shall have power to promote the progress of 
science and useful arts by securing for limited times to 
authors and inventors the exclusive right to their respective 
writings and discoveries.'' Those words, of course, are from 
the United States Constitution, Article 1, Section 8.
    The wisdom of our Country's Founders still rings true 
today. The authors of the Constitution understood that the 
incentive to create would greatly benefit the public. And more 
than two centuries after the fact, our lives have been enriched 
as a result--with inventions and products to make our lives 
easier, and music and movies to lift our spirits.
    Following in the steps of the previous Chairman of the 
Subcommittee, Howard Coble, it is my hope that our work over 
the course of this Congress will help boost the economy, 
increase productivity, and improve the quality of life for all 
Americans.
    At the outset, let me say that I am pleased to be 
associated with the Ranking Member, Howard Berman. We have 
served as Chairman and Ranking Member before on another 
Committee, and I like that particular configuration. Mr. Berman 
is thoughtful, knowledgeable, and an effective Member of 
Congress. And I look forward to his contributions as we tackle 
the difficult and complex issues surrounding intellectual 
property law.
    Let me also welcome the other Members of the Subcommittee. 
I know this Subcommittee is a priority to you all, and I look 
forward to your involvement as well.
    Today, the Subcommittee will conduct an oversight hearing 
on peer-to-peer piracy on university campuses. The rise of the 
Internet and new digital media have changed the way the public 
enjoys entertainment products. One of the advantages of digital 
formats is that they offer extremely high-quality reproduction 
of audio and video. A major disadvantage is that digital 
formats make the works very susceptible to piracy since every 
digital copy offers a perfect reproduction.
    The problem is only exacerbated by peer-to-peer file-
sharing networks. While P2P technology has many benefits, it 
also permits the widespread and massive distribution of digital 
music, movies, and software files, which often results in 
copyright infringement. Industry officials estimate that there 
are billions of illegal files downloaded every week. The result 
is lost sales to businesses and lost royalties to artists and 
copyright owners.
    The ready access to the file-sharing sites and the ease 
with which files can be downloaded by broadband connections has 
emboldened American university students to engage in piracy. 
This is a serious problem that undermines the protections 
provided by the Constitution.
    Some staggering statistics illustrate the magnitude of the 
problem. Research of FastTrack, a peer-to-peer file-sharing 
service, showed that 16 percent of all the files available at 
any given moment are located at IP addresses managed by U.S. 
educational institutions. In addition, FastTrack users trading 
from networks managed by U.S. educational institutions account 
for 10 percent of all users on FastTrack at any given moment. 
It's very unlikely that this amount of file-sharing activity is 
in furtherance of class assignments.
    In an effort to curb university-based piracy, content 
owners and educational associations formed the Joint Committee 
of Higher Education and Content Communities, which will meet 
periodically to address student piracy issues.
    This hearing will focus on the extent of peer-to-peer 
piracy on university campuses and what measures content owners 
and universities are taking to address the problem.
    Mr. Smith. We look forward to hearing from the witnesses 
today, and the Ranking Member, Mr. Berman of California, is 
recognized for his opening statement.
    Mr. Berman. Well, thank you very much, Mr. Chairman.
    I have real enthusiasm for working with you in your new 
chairmanship of this Subcommittee. You mentioned you liked the 
configuration of Chair and Ranking Member. My recollection of 
the last time we were Chair and Ranking Member, we had equal 
numbers of each party on the Committee on which we were Chair 
and Ranking Member, and I liked that configuration. [Laughter.]
    Mr. Smith. That was the Ethics Committee, as I recall, is 
that right?
    Mr. Berman. I liked the configuration. I didn't say I liked 
the Committee. [Laughter.]
    In any event, you have chosen for this hearing an important 
issue for your first hearing as Chairman of this Subcommittee, 
and I think it is a good sign that you will focus the 
Subcommittee on both interesting and relevant issues during 
your tenure.
    Copyright piracy on P2P networks like KaZaA and Morpheus is 
a huge problem. P2P networks are responsible for approximately 
2.5 billion downloads per month. On FastTrack-based P2P 
networks alone, an estimated 3 million to 5 million computers 
are making between 700 million and 900 million files available 
for download at any given moment.
    There is no doubt that the vast majority of these P2P 
uploads and downloads constitutes copyright infringement. 
Music, movie, and television programs constitute an estimated 
89 percent of the files on P2P networks. As the 9th Circuit 
clearly held in the Napster case, the unauthorized distribution 
and reproduction of copyrighted works by total strangers 
through a public P2P network is copyright infringement, pure 
and simple.
    As the 9th Circuit also held, no colorable claim of fair 
use excuses these infringements. The attempt to make such an 
excuse not only ignores the reality of the theft but is an 
insult to creators. It is the copyright owner's right, not a 
pirate's, to choose whether to distribute a copyrighted work 
through a P2P system. If the copyright owner wants to use P2P 
to distribute his work, that's great. If not, the owner has a 
right to refuse.
    The argument about the propriety of illegal P2P file 
trafficking should end there. But some try to further excuse 
this theft. They make patronizing assertions that copyright 
owners actually benefit from this massive theft and thus should 
welcome the usurpation of their property rights.
    The truth, of course, is that the P2P file trafficking 
causes great harm to copyright owners. General economic 
indicators show the extent of harm. Revenues from sales of 
music CDs plummeted 20 percent over 2001 and 2002, and the 
sales numbers for January 2003 indicate more of the same. These 
sales declines cannot be explained away as reflections of the 
general economic downturn from 2000 to the present.
    Economist Harold Vogel has charted a rapid decline in unit 
sales of CDs since 1999, well before the economic turndown, and 
notes that this decline corresponds directly with the 
introduction of Napster.
    The impact on individual creators is also great. Each 
illegal P2P download of a copyrighted song robs a songwriter of 
8 cents. Those 8 cents multiplied by the billions of P2P 
downloads would mean a new life for the vast majority of 
songwriters who earn less than $20,000 in royalties per year. 
Similarly, illegal P2P downloads of television programs destroy 
the syndication market upon which the hopes of many directors, 
writers, and actors hinge.
    Unfortunately, colleges play a prominent role in 
contributing to P2P piracy. A recent study showed that 16 
percent of all the files available at any given moment on the 
FastTrack network are located at IP addresses managed by U.S. 
educational institutions. This means that educational 
institutions are offering between 111 million and 142 million 
mostly infringing files to the universe of P2P users at any 
given time.
    It is imperative that colleges work with copyright owners 
to stem the flood of P2P piracy through their computer 
networks. As Jack Valenti pointed out in a recent speech at 
Duke University, colleges are in the business of creating 
upstanding citizens who will respect the American moral 
compact. To create such citizens, colleges must teach by 
example, and that example can't be adherence to the credo of 
``Do it, if you can get away with it.''
    Furthermore, colleges can't expect Congress to continuously 
help them on intellectual property issues if they do not act as 
responsible members of the intellectual property system. From 
laws facilitating technology transfer to those enabling 
distance education, Congress has willingly helped colleges 
protect or use intellectual property.
    As with the collaborative research legislation we may take 
up later this year, I expect that Congress will continue to 
provide such assistance. But the willingness of Congress to 
address these issues will wane if colleges ignore the massive 
P2P piracy occurring on their systems.
    Moreover, their own self-interest dictates that colleges 
take action to deal with P2P piracy. Bandwidth, security, and 
privacy concerns really require colleges to get the problem in 
hand. It consumes an enormous amount of college bandwidth, P2P 
piracy, and as a result, increases bandwidth cost while 
draining the resources available for research and academic 
pursuits.
    Security concerns should also lead colleges to stop P2P 
piracy through their networks. As Professor John Hale will 
testify, FastTrack and Gnutella, the two most popular P2P 
protocols, enable the transfers of viruses, the implanting of 
malicious computer programs like spyware, and tunneling through 
network firewalls and filters.
    Concerns regarding the privacy implications of P2P networks 
are also quite real. As documented in the white paper submitted 
by Professor Hale and in a separate study by Hewlett-Packard, 
P2P network users often expose their most private information 
and correspondences to the whole P2P network. Unwittingly, P2P 
users frequently allow their credit card numbers, e-mail 
inboxes, and even tax information to be shared with other P2P 
users.
    Mr. Chairman, I have a few more points to make, but I think 
I will shorten my opening statement, which has not been so 
short, and ask for permission to put the whole statement into 
the record.
    Mr. Smith. Thank you, Mr. Berman. Without objection, your 
entire statement will be made a part of the record.
    [The prepared statement of Mr. Berman follows:]
Prepared Statement of the Honorable Howard L. Berman, a Representative 
                in Congress From the State of California
    Chairman Smith:
    You have chosen an important issue for your first hearing as 
Chairman of the Subcommittee. It is a good sign that you will focus the 
Subcommittee on interesting and relevant issues during your tenure.
    Copyright piracy on P2P networks like Kazaa and Morpheus is a huge 
problem. P2P networks are responsible for approximately 2.5 billion 
downloads per month. On FastTrack-based P2P networks alone, an 
estimated 3 to 5 million computers are making between 700 and 900 
million files available for download at any given moment.
    There is no doubt that the vast majority of these P2P uploads and 
downloads constitute copyright infringement. Music, movie, and 
television programs constitute an estimated 89% of the files on P2P 
networks. As the 9th Circuit clearly held in the Napster case, the 
unauthorized distribution and reproduction of copyrighted works by 
total strangers through a public P2P network is copyright infringement 
pure and simple.
    As the 9th Circuit also held, no colorable claim of fair use 
excuses these infringements. The attempt to make such an excuse not 
only ignores the reality of the theft, but is an insult to creators. It 
is the copyright owner's right, not a pirate's, to choose whether to 
distribute a copyrighted work through a P2P system. If the copyright 
owner wants to use P2P to distribute his work, that's great. If not, 
the owner has the right to refuse.
    The argument about the propriety of illegal P2P file trafficking 
should end there, but some try to further excuse this theft. They make 
patronizing assertions that copyright owners actually benefit from this 
massive theft, and thus should welcome the usurpation of their property 
rights.
    The truth, of course, is that P2P file trafficking causes great 
harm to copyright owners. General economic indicators show the extent 
of harm. Revenues from sales of music CDs plummeted 20% over 2001 and 
2002, and the sales numbers for January 2003 indicate more of the same. 
These sales declines cannot be explained away as reflections of the 
general economic downturn from 2000 to present. Economist Harold Vogel 
has charted a rapid decline in unit sales of CDs since 1999--well 
before the economic downturn--and notes that this decline corresponds 
directly with the introduction of Napster.
    The impact on individual creators is also real. As I have noted 
before, each illegal P2P download of a copyrighted song robs a 
songwriter of 8 cents. Those 8 cents multiplied by the billions of P2P 
downloads would mean a new life for the vast majority of songwriters 
who earn less than $20,000 in royalties. Similarly, illegal P2P 
downloads of television programs destroy the syndication market upon 
which the hopes of so many directors, writers, and actors hinge.
    Unfortunately, colleges play a prominent role in contributing to 
P2P piracy. A recent study showed that ``sixteen percent of all the 
files available at any given moment on the FastTrack network are 
located at IP addresses managed by U.S. educational institutions.'' 
This means that educational institutions are offering between 111 and 
142 million mostly-infringing files to the universe of P2P users at any 
given time.
    It is imperative that colleges work with copyright owners to stem 
the flood of P2P piracy through their computer networks.
    As Jack Valenti pointed out in a recent speech at Duke University, 
colleges are in the business of creating upstanding citizens who will 
respect the American moral compact. To create such citizens, colleges 
must teach by example, and that example can't be adherence to the credo 
of ``Do it if you can get away with it.''
    Furthermore, colleges cannot expect Congress to continuously help 
them on intellectual property issues if they do not act as responsible 
members of the intellectual property system. From laws facilitating 
technology transfer to those enabling distance education, Congress has 
willingly helped colleges protect or use intellectual property. As with 
the collaborative research legislation we may take up later this year, 
I expect that Congress will continue to provide such assistance. 
However, the willingness of Congress to address these issues will wane 
if colleges ignore the massive P2P piracy occurring on their systems.
    Furthermore, their own self-interest dictates that colleges take 
action to deal with P2P piracy. Bandwidth, security, and privacy 
concerns require colleges to get the problem in hand.
    P2P piracy consumes an enormous amount of college bandwidth, and as 
a result, increases bandwidth costs while draining the resources 
available for research and academic pursuits. 88% of Residence Hall 
networks at the University of Indiana were at one time consumed with 
P2P file-trafficking. When Texas Christian University blocked Napster, 
it freed up 70% of its bandwidth.
    Freeing up network bandwidth by blocking illegal P2P file-
trafficking has saved colleges significant sums. Kansas State estimated 
that it saved more than $100,000, or a quarter of its bandwidth costs. 
In a time of shrinking school budgets, these savings are significant.
    Security concerns should also lead colleges to stop P2P piracy 
through their networks. As Professor John Hale will testify, FastTrack 
and Gnutella, the two most popular P2P protocols, enable the transfer 
of viruses, the implanting of malicious computer programs like spyware, 
and ``tunneling'' through network firewalls and filters. Once the 
networks have been breached, sensitive information can be stolen or 
corrupted, critical university computer systems can be crashed, and 
university computers can be ``enslaved'' to carry out Denial of Service 
attacks. It is these very security concerns that led the House, Senate, 
and U.S. Courts to disable the use of popular P2P networks on their 
respective computer systems.
    Concerns regarding the privacy implications of P2P networks are 
also quite real. As documented in the White Paper submitted by 
Professor Hale and in a separate study by Hewlett-Packard, P2P network 
users often expose their most private information and correspondences 
to the whole P2P network. Unwittingly, P2P users frequently allow their 
credit card numbers, email inboxes, and even tax information to be 
shared with other P2P users.
    Piracy apologists like to argue that stopping P2P piracy somehow 
impinges on the privacy of file-traffickers. As the Hale and H-P 
studies show, it is participation in file-trafficking itself threatens 
the privacy of file-traffickers. Thus, colleges concerned with the 
privacy of their students and other members of the college community 
should act to stop P2P piracy, not allow it to flourish.
    I understand that I may be preaching to the choir here. The schools 
represented by our witnesses today have all taken dramatic steps to 
stop P2P piracy from occurring on their networks. Your schools, and you 
yourselves, are to be commended for acting in enlightened self-
interest. Rather than preaching to you, I mean to encourage other 
colleges to follow your lead.
    I am heartened to hear that a group of colleges are meeting with 
copyright owners to discuss ways to address P2P piracy on campus. In 
particular, I am most interested in your efforts to craft a model 
policy for best practices that colleges should adopt to address P2P 
piracy. Widespread adoption of such best practices, and the self-
regulation model they represent, is far preferable to a legislative 
mandate of such standards.
    It seems critical that you develop this best practices model with 
all speed, so that colleges across the country can implement them 
before the P2P piracy problem spirals further out of control. I hope 
you will keep this Subcommittee appraised of your progress in this 
area, and of subsequent progress with implementation.
    Thank you, Mr. Chairman, and I yield back the balance of my time.

    Mr. Smith. And let me say to the other Members, normally 
I'd encourage you to make opening statements a part of the 
record. But this being our first hearing, and I know several 
Members have constituents in the office, I'll be happy to 
recognize Members for brief opening statements, if they have 
them.
    I know the gentleman from Florida, Mr. Keller, has an 
opening statement, and he'll be recognized now.
    Mr. Keller. Thank you, Mr. Chairman.
    Mr. Chairman, if a student walks into a campus bookstore 
and puts a sweatshirt in his backpack, everybody knows what to 
call it. It's shoplifting. If that same student goes into the 
same store and sticks a CD or a DVD in the same backpack and 
walks out, it, too, is shoplifting. The school has disciplinary 
policies and pursues them, as they would with any other crime.
    There is no difference if the student takes that same music 
or movie by downloading it off the Internet while sitting in 
the dorm. Colleges and universities have a duty to address 
these crimes aggressively. School presidents and other 
administrators cannot stand by as taxpayer-funded information 
systems and tuition dollars are being used to build Internet 
systems that help facilitate unethical behavior.
    Now, that may sound hokey to some people. But schools have 
an important role in shaping America's future leaders. The fact 
is that no professor can address the ethical transgressions we 
have read about in the business community if his students go 
back to the dorm and commit crimes of their own. There must be 
a clear and consistent message.
    Some students may feel that downloading music and movies is 
victimless. In fact, the theft on college campuses is rampant 
and widespread and undermining one of America's most important 
industries. Some students may feel that they can steal 
anonymously. It is noteworthy that we now have the ability to 
track those who are committing online crimes.
    I read a recent article citing a Kent State University 
administrator who claimed that 40 percent of the university's 
bandwidth was being consumed by 10 students. An article about 
Cornell University's problems stated that over 50 percent of 
their Internet network bandwidth was for KaZaA, and two-thirds 
of the KaZaA traffic was outbound, meaning that Cornell was 
actually facilitating theft by people from outside the 
university. Cornell found that the heaviest bandwidth user was 
using 2,800 times the bandwidth of the typical user.
    Mr. Chairman, I commend you for focusing attention on this 
very troubling situation, and I look forward to working with 
Dr. Spanier and other educational leaders to help find 
solutions that do not disrupt the ability of the university 
Internet systems to fulfill their rightful and lawful education 
missions.
    I yield back.
    Mr. Smith. Thank you, Mr. Keller. The gentlewoman from 
California, Ms. Lofgren, is recognized for an opening 
statement.
    Ms. Lofgren. Thank you, Mr. Chairman.
    I look forward to the testimony today and to the future 
hearings on the issue of copyright and technology. Clearly, we 
have massive infringement going on in P2P networks, and that is 
a concern. I mean, there is no question that that is 
problematic.
    I am pleased to see that the education community is not 
simply looking at legislation, but looking to themselves to see 
what they might do to be responsible about this issue. And my 
friend Dr. John Hennessy is heading up the education best 
practices task force. I am hopeful that that will be a very 
positive step for our Country.
    However, I also note that it is, I'd say, unlikely in the 
extreme that P2P networks will be eliminated. And in fact, it's 
behavior and student behavior that needs to be changed so that 
infringement does not continue to occur. Clearly, there are 
non-infringing uses as well to P2P networks, and so 
universities will tread with some caution, I think, on what 
they do vis-a-vis their students.
    I am hopeful also that we will hear, if not today, in 
future hearings, what efforts are being made to meet the 
consumer demand for content online because that is about human 
behavior also. The fact that that content interest has not yet 
been met does not excuse infringement, but it is part of the 
whole behavior situation that we need to take a look at. And I 
am hopeful that as the months go on that we will also have an 
opportunity to look at that.
    And with that, I will not delay the witnesses further, and 
I yield back. Thank you, Mr. Chairman.
    Mr. Smith. Thank you, Ms. Lofgren.
    Are there other Members who wish to make opening 
statements? Does the gentleman from Florida, Mr. Wexler, have 
an opening statement? He is recognized.
    Mr. Wexler. Thank you, Mr. Chairman. And I want to echo Mr. 
Berman's comments in terms of our looking forward to working 
with you as the Chairman. And I know you have a deep interest 
in these issues and a very fair interest in the past, and it's 
very exciting for those of us on the Committee.
    I would just like to say a few words, if I could, in terms 
of the issue before us today and the issue specifically with 
respect to universities. I find it deeply troubling that 
intellectual property protections are most in danger at our 
country's universities, which have long been a significant 
source for intellectual property in this country.
    But I have come to understand, even as American colleges 
and universities vigorously protect the intellectual property 
of their scientists, their professors, and their legal 
scholars, the property of artists and musicians are being 
widely traded on university network servers with few 
consequences, at least until very recently.
    At almost any time of the day or night, students are 
sharing, stealing, and downloading songs and movies with easily 
accessible technology on high-speed university networks. 
However easy this file-stealing has become, it is far from 
justifiable. It is electronic theft, plain and simple. And it 
is on a path to cripple American artists, large and small.
    Universities have always been the strongest bases of 
support for independent music. I'm very concerned that file-
sharing, which is financially devastating to the entertainment 
industry, will have the unintended effect of killing this kind 
of small, experimental music. For we all know that it is not 
just the guaranteed successes that are most hurt by this theft. 
It is small musicians, songwriters, and artists who will have 
to find other work if electronic theft continues as it has at 
universities and in the larger Internet community.
    Of course, all stealing is equally reprehensible, but the 
marginal effect of this theft is far more destructive for the 
smaller, less mainstream artists. I would like to quickly bring 
to the attention of the Subcommittee one example of exactly 
what we would lose if this rampant file-stealing continues.
    Since she rose from relative obscurity to win every Grammy 
for which she was nominated last week, Norah Jones expressed 
her creativity and originality and was justly recognized. 
Sadly, she is exactly the kind of artist who might not be heard 
if this music piracy continues.
    Musicians like Bruce Springsteen and Eminem will certainly 
be hurt by piracy but are essentially guaranteed--virtual 
guaranteed successes, and they can count on having their songs 
produced and marketed.
    But if piracy continues to hurt the music industry, 
companies will no longer be able to take risks with more 
innovative and cutting-edge artists as they did with Ms. Jones, 
and we will all be the poorer for it.
    Congress's responsibility is to maintain strong copyright 
protection laws in order to foster creativity and encourage 
investment. I am by no means suggesting censorship, violating 
the privacy of individuals, or the dampening of academic 
debate.
    American universities have been an invaluable source of 
innovation and debate for this country. This is why I am 
concerned with the effect bandwidth caps and other anti-piracy 
measures might have on legitimate academic research and free 
speech at universities. And I hope these concerns, I'm sure 
they will, will be addressed by today's witnesses.
    While the network restrictions might discourage students 
from breaking the law, they may also hinder legitimate 
exchanges, and it is clear that no simple universal solution 
will end Internet piracy. I hope, however, it's equally clear 
that peer-to-peer piracy cannot be allowed to continue, 
particularly in a setting that purports to teach our children 
respect for law and American values of fairness.
    I want to thank President Spanier and President Broad for 
being here today, and I look forward to hearing more regarding 
their experiences combating this problem.
    As we continue to hear testimony on this important 
intellectual property issue, we all must keep in mind that the 
overwhelming majority of P2P transfers are of copyrighted 
materials.
    These transfers are theft. There can be no justifying or 
excusing them, and it is the duty of Congress to protect these 
properties on university campuses and throughout the world.
    Thank you, Mr. Chairman.
    Mr. Smith. Thank you, Mr. Wexler.
    Are there other Members who wish to be recognized? The 
gentleman from New York, Mr. Weiner?
    Mr. Weiner. Thank you, Mr. Chairman. I'll be brief. And I, 
too, look forward to your chairmanship of this Committee.
    You know, this is that rare issue that there is virtual 
consensus on the panel and, frankly, probably in Congress that 
something needs to be done to address the problem. Yet we on 
this Committee and, frankly, we in this Congress have always 
been very responsive when all sides have said, you know what, 
just wait.
    This, like many other aspects of the Internet, is a place 
where we have been encouraged to avoid legislating problems 
because, frankly, technology has often outstripped the problems 
and outstripped the solutions at once.
    We've been told on several occasions that the problem of 
P2P copyright violations and illegal sharing requires a 
technical solution or, in some cases, might require a public 
relations solution. Although I would have liked that guy from 
Limp Bizkit to be in ``agreeance'' on fixing this problem 
rather than the other thing he was addressing.
    But we are reaching, I would say, the end of our ropes 
here. I think that there is consensus that has emerged that, 
you know what, we're going to wait for so long. And while I 
think all sides of this debate is to let us try to work it out, 
I think the fact that we're having another hearing on this, the 
fact that Members of Congress have said in, as I said, virtual 
unanimity that something needs to be done should be a message 
to all of those who will testify today and those in the 
industry as well that, you know, we are reaching that point 
that, on a bipartisan level, that we want to act to stop this 
illegal activity.
    So I would hope that in the testimony we hear today, we 
don't hear the same refrain that we've heard before, which is 
sometimes, yes, we've got a problem, but Congress should step 
back. I'd like to be hearing today how long it's going to be, 
as these technological solutions are worked out, how long it's 
going to be before the public relations campaign kicks in.
    Because every day constituents of mine in New York City, 
which is a breadbasket for creative activity, people are losing 
money, losing careers, and these are not the Britney Spears of 
the world. These are the people who help Britney Spears write 
her--I guess they're called songs. [Laughter.]
    These are people who are, you know, $20,000, $30,000 a year 
creative artists that are being denied their living because of 
this problem.
    But I thank you, Mr. Chairman, for addressing this so early 
in the session, and I hope it's just the first step in what 
will be others.
    Mr. Smith. Thank you, Mr. Weiner.
    And let me thank all the Members who are here for their 
attendance. We may actually be setting some kind of a record 
for a hearing, and I hope this kind of attendance continues as 
well.
    Also, let me thank those of you who are in the audience 
today. There is clearly a high level of interest in the subject 
at hand, and we appreciate your being here as well.
    A couple of housekeeping matters. First of all, all 
witnesses' statements will be made a part of the record, as 
will the speech by Jack Valenti at Duke University. And also 
let me say that we intend to enforce the 5-minute rule. So we 
hope you can conclude your testimony in 5 minutes. If not, 
perhaps you will have time to finish it during the question and 
answer period as well. And we'll hold Members to 5 minutes, 
too.
    Let me introduce our witnesses today. Our first witness is 
Hilary Rosen, chairman and chief executive officer of the 
Recording Industry Association of America, the trade group 
representing the U.S. sound recording industry. She was named 
president and CEO of the RIAA in January 1998 after more than 
11 years of service to the organization. Ms. Rosen holds a 
bachelor's degree in international business from George 
Washington University.
    Our next witness is Graham Spanier, president of the 
Pennsylvania State University and co-chair of the Joint 
Committee of Higher Education and Content Communities. A 
distinguished researcher and scholar, he has authored more than 
100 publications, including 10 books. He earned his Ph.D. in 
sociology from Northwestern University, where he was a Woodrow 
Wilson Fellow, and his bachelor's and master's degrees are from 
Iowa State University.
    And the next witness is Robyn Render, vice president for 
information resources and chief information officer for the 
University of North Carolina. Ms. Render serves as the primary 
adviser to the university president on information technology. 
Ms. Render holds associate and bachelor's degrees in 
information systems from the University of Cincinnati.
    Our last witness is Dr. John Hale, assistant professor of 
computer science and director of the Center for Information 
Security at the University of Tulsa. Dr. Hale has significant 
expertise in computer security, programming languages, and 
distributed systems. He has published approximately 40 
reference articles and one book. He received the prestigious 
2000 National Science Foundation award for his research and 
educational contributions in the field of computer security.
    Welcome to you all. As I say, your statements will be made 
a part of the record. We look forward to hearing from you, and 
we will begin with Ms. Rosen.

STATEMENT OF HILARY ROSEN, CHAIRMAN AND CEO, RECORDING INDUSTRY 
                     ASSOCIATION OF AMERICA

    Ms. Rosen. Thank you, Mr. Chairman. Good morning, 
Congressman Berman, other Members of the Committee.
    Allow me, Mr. Chairman, to add my congratulations to you as 
you take on the role of Subcommittee Chairman and pledge the 
recording industry's cooperation as you go forward on this 
important work.
    And thank you also for your interest in this issue. I think 
your work with the University of Texas has been extremely 
constructive and in large part has resulted in some of the 
working relationships that you'll see demonstrated here today 
between all of us in the university community.
    This hearing could not have come at a better time, for 
several reasons. The problem of P2P piracy in general is at an 
all-time high for the music community. And while they were a 
long time in coming, legitimate music services have arrived and 
are being extremely well received, eliminating any possible 
excuse that some may have for engaging in such wholesale 
piracy.
    And importantly, the unique aspects of universities, given 
their mission and their operations, make the cooperative 
working relationship that you will see demonstrated here today 
possible, and it's a welcome model for problem-solving in this 
area.
    I think by now Members of this Committee have seen a 
demonstration of peer-to-peer networks and witnessed the fact 
that a majority of the use on them is massive unauthorized 
distribution of copyrighted works.
    That's not to say that the technology itself is bad. There 
are certainly multiple legitimate uses for P2P, and hopefully, 
in the future they will be used.
    But the people who run these networks now are aggressively 
exploiting other people's property to support their global 
criminal activity.
    While it's true that many users don't understand the 
legalities of their behavior, many others do. And it's also 
clear that the operators of these services well know that 
they're operating an illegal network. That's why we have to 
chase them around the globe and why they find criminal havens 
like Vanuatu so appealing for their corporate headquarters.
    Caught up in this illegal practice are the thousands of 
colleges and universities whose generous provision of large 
bandwidth to their students, for scholarly and research 
purposes have resulted in their systems being used as a major 
supporter of these illegal activities. And a new practice 
outlined in my testimony, whereby students are actually setting 
up their own networks using the university capacity, is 
extremely troubling.
    We are very gratified that the leadership of the university 
community, personified here by the presence of Dr. Spanier, has 
recognized these problems as mutual and are working with others 
in the copyright community toward solutions.
    It's obvious why we care about this practice. It may not be 
as obvious why the universities should care. But as you'll 
hear, their networks are clogged and their bandwidth costs are 
skyrocketing mostly from people outside their system using the 
bandwidth to steal music and movies that are residing on 
students' computers. Students are breaking the law, and 
universities know they have an obligation to try and educate 
them and protect them from such activity.
    There are other reasons as well. Many people believe, as I 
do and as Members here have said, that it's simply morally 
wrong to condone the stealing of other people's property. And 
Members today have been more eloquent than I could be on this 
issue. So what's the public interest here?
    Of course, Congress wants our young people to evolve into 
upstanding young adults, but there are other things that you 
must consider. Many universities and colleges receive Federal 
and State taxpayer monies. So you have a fiduciary interest if 
their costs increase due to piracy.
    And there are serious threats to people who open up their 
computer to these networks. Open hard drives facilitate access 
to significant personal data and risk additional crimes like 
identity theft. The networks are also used for numerous 
commercial exploits, such as pornography being pushed to users.
    The reduction of sales in the music industry has resulted 
in far fewer new artist signings over this past year, meaning 
frankly that the diversity of culture is waning. If bad 
policies from important institutions result in less music and 
movies and software being developed, society at large is worse 
off.
    And of course, the protection of intellectual property is 
in the national interest. During these times of record trade 
deficits, intellectual property is one of the very few 
industries that return a favorable balance of trade to the U.S. 
economy. Protecting that advantage has always been a key 
mission of this Subcommittee, and its leadership here is well 
known.
    So in recognizing these issues, we are working with the 
university leadership. I think Dr. Spanier will elaborate some 
more on how this Committee is working.
    My colleague Cary Sherman, RIAA's president, is the co-
chair of that Committee with Dr. Spanier. Mr. Sherman is here 
with me today.
    We're extremely hopeful about the potential for this 
working relationship, and we're certainly impressed with the 
seriousness with which it's being taken. Our goals are simple. 
We want to find ways to help the universities take this problem 
into their own hands by implementing a series of best practices 
recommendations, which we hope will be developed within the 
next few months.
    Policy recommendations and technical recommendations may be 
the results of our efforts. We have pledged to explore both. 
Certainly, these will only be voluntary recommendations, and 
nothing we do will force universities to adhere to new 
practices.
    Nonetheless, our joint Committee has fine leadership and 
sincere commitment. We're confident that the results of our 
work could be an effective model leading all schools on a path 
that's mutually beneficial, and we look forward to working with 
this Committee as we proceed on this effort over the next 
coming months.
    Thank you.
    [The prepared statement of Ms. Rosen follows:]
                   Prepared Statement of Hilary Rosen
    Mr. Chairman, Congressman Berman, Members of the Subcommittee, I 
greatly appreciate your inviting me to speak with you on the timely 
subject of unauthorized peer to peer (P2P) file sharing on university 
and college computer networks.
    Over the years, our industry has benefitted from the emergence of 
various new technologies. The evolution from wax cylinders to vinyl, 
from vinyl LPs to cassettes and then forward into the digital era--CDs, 
DVD Audio, Super Audio CD, and on-line music services, reflect our 
industry's willingness to embrace new technologies to provide music 
listeners greater opportunities to access music of ever greater 
fidelity when and where they want it.
    Without question, the Internet challenges us to think about the 
distribution of recorded music in an entirely different way. Whereas we 
have been accustomed to the production of physical products embodying 
creative works, our companies are now fashioning business models 
applicable to the digital electronic realm. This is a new marketplace 
in which record companies and their licensees seek to establish a 
viable, vigorous commercial presence.
    Our much publicized skirmishes with Napster, KaZaA, AudioGalaxy, 
Aimster and various other unauthorized Internet P2P systems enabling 
the massive uploading and downloading of files of copyrighted music 
recordings are not prompted by any industry predisposition against the 
applications or the technology. Rather, it is the very evident fact 
that the sponsors of those systems are exploiting the creative 
investment of the performing artists and recording companies for their 
own commercial benefit, without any intention, or credible effort, to 
obtain licenses or to pay royalties. It is the misuse of technology 
that must be stifled, not the technology itself. We believe that P2P 
technology will offer great benefits for legitimate uses.
    Needless to say, these unlawful P2P applications have found almost 
instantaneous acceptance among college students. This demographic group 
comprises avid listeners who have traditionally represented a sizeable 
portion of our retail markets. The scope of illegal P2P file sharing 
and the consequential detriment to our industry is well known. More 
than 2.6 billion music files are illegally downloaded every month on 
unauthorized P2P systems. Of this number, a significant percentage of 
the transfers occur over campus networks.
    This should come as no surprise. After all, American colleges and 
universities have incredibly fast Internet connections--often as a 
result of support from the government--which are intended to be used 
for academic, research and other legitimate purposes. It is to be 
expected that those who want to engage in file transfers would likely 
to choose a university system's high bandwidth to do so.
    The unauthorized P2P file-sharing problem poses tremendous 
difficulties not only for copyright owners and artists, but also for 
administrators on our nations' college campuses. Rampant file-sharing 
of music and video content imposes a heavy toll on all of us. Despite 
education campaigns about the illegality of file sharing, and despite 
numerous court decisions clearly holding that copying music, movies and 
other copyrighted files is against the law, there is an alarming 
disregard among students for Internet theft. As a result, P2P abuse has 
overtaxed numerous college computer systems, slowing processing of 
legitimate information to a crawl due to the uncommonly large number 
and size of files being uploaded and downloaded. Moreover, students are 
often unaware of the dangers of these P2P applications: compromising 
campus network security, making their own hard drives containing their 
personal data available to others, and opening the campus network to 
computer viruses. Even more alarming is the fact that up to 75% of 
those coming onto the campus networks are people outside the university 
community who are searching the Internet for the greatest amount of 
broadband capacity in order to expedite the file transfer. Campus 
systems, with their fast connections, find themselves hosting total 
strangers.
    Perhaps the newest and most frightening problem emerging on college 
campuses is what we refer to as LANNs--or Local Area Napster Networks. 
Apparently, some students have taken it upon themselves to establish 
Napster-like systems on university campuses, so that students can copy 
each other's files within the university network, which can often be 
done more quickly and easily than downloading files from the Internet. 
Perhaps these students think that what the courts have found to be 
illegal on the Internet is somehow less illegal if confined to a 
university network. In fact, such systems are no more lawful, and are 
primarily being used for the same illicit purposes, as the P2P systems 
like Napster that have been ruled to infringe our copyrights. We 
certainly have hope that the university community will actively 
confront this issue and take steps to stop this development before it 
spreads.
    I'm pleased to say that there have been some very encouraging 
developments in addressing this problem. The entertainment and higher 
education communities have undertaken to work together to address the 
problem of P2P piracy on college campuses. Last fall, RIAA, the Motion 
Picture Association of America, the Songwriters Guild of America and 
the National Music Publishers Association jointly sent a letter to 
2,300 college and university presidents explaining the severity of 
online piracy and the importance of their active involvement in 
tackling the issue. We also reached out to the leadership of the 
national associations representing the spectrum of the nation's 
colleges and universities and they demonstrated their support by 
sending a follow-up letter to the same universities urging them to 
address the P2P problem proactively. This started a chain of 
conversations between the content industries and leaders of higher 
education leading to the establishment of the Joint Committee of the 
Higher Education and Entertainment Communities. The Co-Chairs of the 
Joint Committee are Dr. Graham Spanier, the President of Penn State 
University, who is here today, and my colleague Cary Sherman, RIAA's 
President. For your reference, I have provided a listing of the 
principal representatives on each side.
    During the initial meeting on December 10, 2002, the Joint 
Committee decided to establish three task forces focusing on the 
following areas: Education/Best Practices, Technology, and Legislative 
Issues.
    The Education/Best Practices Task Force, chaired by Dr. John 
Hennessey, President of Stanford University, is working to identify and 
develop informational materials that will assist educators and campus 
administrators in educating students and other members of campus 
communities about copyrights, their obligation to refrain from 
infringing conduct, and the institution's commitment to respect the 
rights of copyright owners. I emphasize that this task force is looking 
to craft advisory information, recognizing that each institution has 
its own policies regarding enforcement of computer usage restrictions 
and disciplinary actions. Some, like the University of North Carolina 
have exemplary policies. I would like to thank Dr. Molly Broad, who is 
here today, and I hope that the policy adopted by her university serves 
as an example to many others. Also, this task force will be sensitive 
to the concerns of the academic community on matters of privacy, free 
speech, and academic freedom. We believe that, with active dialogue on 
these issues, we can make significant headway in lessening the 
misunderstandings that arise from time to time between the two 
communities over these issues.
    The Technology Task Force, chaired by Dr. Charles Phelps, Provost 
of the University of Rochester, is taking up an examination of current 
and emerging technologies that can effectively identify online 
trafficking of copyrighted material and provide administrators with the 
resources to limit or prevent infringing uses of P2P systems. The task 
force will conduct an initial screening of promising technological 
solutions and then test them in pilot applications on selected 
campuses. The results will be disseminated to the higher education 
community affording an opportunity to determine which technologies are 
of greatest benefit to any given institution. We expect that a number 
of technologies will show potential. We're not looking for a ``one size 
fits all'' outcome.
    The Legislative Task Force, co-chaired by Jack Valenti, President 
of the Motion Picture Association of America, and Dr. Broad, is looking 
at various issues that have come before Congress that affect both of 
our communities. This task force will provide an opportunity for both 
communities to work proactively on emerging issues and to understand 
the perspectives and concerns of the other. We're confident that this 
dialogue will strengthen the relationship between us.
    To sum this up, we think that we are off to a good start in finding 
common ground with the leadership representing the nation's colleges 
and universities. Given that those institutions are themselves heavily 
invested in copyright and other intellectual property rights, there's 
every reason to believe that we can forge baseline understandings upon 
which we can structure effective strategies and programs to educate 
students and others about music, film, videogame, and software property 
rights and their legal obligations towards them.
    The problems confronting us are formidable. However, we believe 
that our collaboration with college and universities will bear fruit. 
Certainly, I would hope that sometime in the near future I will be able 
to report to you that legitimate on-line music subscription services, 
which are now becoming abundantly available, have established a viable 
presence on campuses and that P2P piracy on college networks has 
receded.
    I again thank you for the invitation to speak with you on this 
topic, and I would be pleased to respond to any questions you may have.

                              ATTACHMENTS






    Mr. Smith. Thank you, Ms. Rosen.
    And Dr. Spanier?

STATEMENT OF GRAHAM SPANIER, PRESIDENT, THE PENNSYLVANIA STATE 
UNIVERSITY, CO-CHAIR OF THE JOINT COMMITTEE OF HIGHER EDUCATION 
                    AND CONTENT COMMUNITIES

    Dr. Spanier. Mr. Chairman and Members of the Subcommittee, 
I appreciate the opportunity to appear before the Subcommittee 
today to discuss the important issue of the use of peer-to-peer 
file-sharing on college and university campuses.
    As president of the Pennsylvania State University, I am 
responsible for the management of an institution that has 24 
campuses, 5,000 faculty, and 83,000 students.
    The misuse of peer-to-peer technology on college and 
university campuses is a serious problem that is now acutely 
confronting higher education administrators. Fully 
understanding the nature and scope of the problem and how to 
deal with it raises a series of challenges that we are working 
hard to meet.
    As you've heard, I'm intimately involved in this Committee 
that is looking at these issues. The purpose of the Committee 
is twofold: to examine the ways to reduce the misuse of peer-
to-peer technology on campuses and to attempt to reduce 
differences between the higher education and entertainment 
communities on Federal intellectual property legislative 
issues.
    I believe we have a process that can make real progress in 
effectively addressing peer-to-peer piracy on university 
campuses. And I'm hopeful that we can educate our two 
communities about our common and differing interests and 
concerns with respect to this and other copyright-related 
issues.
    Higher education is clearly on record in agreeing with the 
entertainment community that copyright infringement is wrong 
and that peer-to-peer file-trading that constitutes copyright 
infringement is illegal and should be stopped. We in higher 
education understand the concerns of the entertainment industry 
about the impact of peer-to-peer misuse on their markets and 
the loss of opportunities that both creators and consumers may 
suffer as a consequence.
    Moreover, university administrators recognize that our 
institutions have an obligation, through a variety of 
mechanisms, to educate our students about their legal and 
ethical responsibilities, not only as members of our university 
communities, but as members of our society.
    We hope, in turn, that the entertainment industry officials 
and policymakers, such as the Members of this Subcommittee, 
understand the challenges that lie before university 
administrators in trying to implement ways to reduce or 
eliminate inappropriate uses of peer-to-peer without at the 
same time eliminating legitimate uses of peer-to-peer 
technologies; without constricting academic freedom and the 
free and open exchange of information that underpins the 
creativity, vigor, and productivity of education and research 
programs; and without invading the privacy of our students, 
faculty, and staff.
    Let me illustrate how these concerns play out at my own 
university. Penn State has a vigorous program of copyright 
education for our students and employees. Before getting an 
account, individuals must agree that they understand and will 
comply with Federal and State laws in addition to Penn State's 
acceptable use policies.
    We also have an indirect enforcement effort. Audio and 
video files are large, and we monitor the amount, but not the 
content, of traffic to and from individual machines. Residence 
hall users are limited to 1.5 gigabytes of inbound or outbound 
traffic per week.
    There are increasingly severe restrictions for offenders 
who exceed the limits, beginning with a decrease in the speed 
allowed for network connection. For persistent violators, there 
is a complete suspension of network access.
    The limitation on bandwidth, coupled with the threat of 
suspension of access, is intended to discourage copyright 
infringement. Additionally, when notified by copyright holders 
of infringement, we comply vigorously with the Digital 
Millennium Copyright Act and immediately suspend access until 
the issue is resolved. We received 153 such complaints in 
calendar year 2001.
    Although we do not currently monitor the content to detect 
the fingerprints of pirated copyrighted material, we would 
consider such a possibility if technology, functional for a 
university of our size, allowed us to maintain the educational 
principles to which we subscribe.
    Yet despite these educational efforts, despite our 
compliance with the Digital Millennium Copyright Act, and 
despite our technical interventions, it is probably fair to say 
that thousands of our students illegally download some amount 
of copyrighted material.
    They are typical of college students nationally in this 
regard and are party to a practice that is morally wrong, is 
damaging to the entertainment industry, and is inconsistent 
with the values of honesty and integrity that students more 
typically profess.
    Mr. Chairman and Members of the Committee, I appreciate the 
interest in this important issue that you all have, and I would 
be pleased to keep you informed of the work of our joint 
Committee.
    [The prepared statement of Mr. Spanier follows:]
                Prepared Statement of Graham B. Spanier
    Mr. Chairman and Members of the Subcommittee, I appreciate this 
opportunity to appear before the subcommittee today to discuss the 
important issue of the use of peer-to-peer file sharing on college and 
university campuses. As President of The Pennsylvania State University, 
I am responsible for the management of an institution that has 24 
campuses, 5000 faculty, and 83,000 students.
    Penn State has actively and comprehensively incorporated 
information technology into virtually every aspect of its mission of 
teaching, research, and service. Computer networks have greatly 
facilitated communication between students and faculty, have enabled 
new pedagogical and research capabilities, and have enhanced our campus 
connections with local communities. Information technology has expanded 
the educational boundaries of traditional classroom teaching and 
dramatically increased the potential for distance education.
    Beyond academic uses, information technology and networked 
communications have also improved our ability to establish and maintain 
personal connections with our alumni, with potential students, and with 
the public. Email, instant messaging, and personal web sites enable our 
students' ability to reach each other on campus and connect with the 
world beyond the campus boundaries with ease.
    Unfortunately, the same technologies that so powerfully expand and 
enrich the academic and personal experiences of our students and 
faculty can also be misused. The capacity of information technology to 
be used for both legitimate and illegitimate purposes is clearly 
demonstrated by peer-to-peer (P2P) file sharing technologies. P2P 
technology has the potential to expand dramatically the ease, speed, 
and breadth of information exchange. Such capacity will clearly benefit 
a wide range of educational and research activities. Indeed, federal 
agencies such as the National Science Foundation are funding research 
into P2P development to realize this potential. But P2P can also be 
used to carry out the unauthorized retrieval and distribution of 
copyrighted material.
    The misuse of P2P technology on college and university campuses--
the subject of this hearing--is a serious problem that is now acutely 
confronting higher education administrators. Fully understanding the 
nature and scope of the problem and how to deal with it raises a series 
of challenges that we are working hard to meet.
    University officials are working with representatives of the 
entertainment industry to address the problem of misuse of P2P 
technology. Last October, two letters--one from entertainment industry 
organizations and one from the six major national higher education 
associations--were sent to college and university presidents. The 
higher education letter urged university officials to examine the use 
of P2P on their campuses and to take appropriate actions to reduce its 
misuse.
    Last summer and fall, university and higher education association 
officials also began a series of discussions with representatives of 
the entertainment industry, culminating in the formation of the Joint 
Committee of the Higher Education and Entertainment Communities, co-
chaired by Cary Sherman, President of the Recording Industry 
Association of America (RIAA), and me; a list of the full committee is 
attached to my testimony.
    The purpose of the committee is two-fold: (1) to examine ways to 
reduce the misuse of P2P technology on campuses, and (2) to attempt to 
reduce differences between the higher education and entertainment 
communities on federal intellectual property legislative issues. The 
committee met in December to discuss these issues and how to proceed in 
addressing them. The committee agreed that we would form three task 
forces: The first focuses on educational efforts about copyrights, 
rights and responsibilities, and the appropriate and inappropriate use 
of P2P file sharing. The second deals with the appropriate role, 
availability, and functionality of technology in managing P2P use. And 
the third task force will focus on legislative issues.
    The work of the task forces is underway. We expect that they will 
report back to the full committee later this spring, and we will soon 
thereafter conclude our formal joint activity with a final review of 
task force work, formulation of recommendations, and a consideration of 
final steps.
    I believe that we have a process that can make real progress in 
effectively addressing peer to peer piracy on university campuses, and 
I am hopeful that we can educate our two communities about our common 
and differing interests and concerns with respect to this and other 
copyright-related issues. Higher education is clearly on the record in 
agreeing with the entertainment community that copyright infringement 
is wrong, and that P2P file trading that constitutes copyright 
infringement is illegal and should be stopped. We in higher education 
understand the concerns of the entertainment industry about the impact 
of P2P misuse on their markets and the loss of opportunities that both 
creators and consumers may suffer as a consequence. Moreover, 
university administrators recognize that our institutions have an 
obligation, through a variety of mechanisms, to educate our students 
about their legal and ethical responsibilities, not only as members of 
our university communities, but as members of our society.
    We hope, in turn, that entertainment industry officials and policy 
makers, such as the members of this subcommittee, understand the 
challenges that lie before university administrators in trying to 
implement ways to reduce or eliminate inappropriate uses of P2P without 
at the same time eliminating legitimate uses of P2P technologies; 
without constricting academic freedom and the free and open exchange of 
information that underpins the creativity, vigor, and productivity of 
our education and research programs; and without invading the privacy 
of our students, faculty, and staff.
    A song downloaded or uploaded by a student using P2P typically 
constitutes copyright infringement; but in selected cases it might also 
be a fully legitimate, desired fair use of copyrighted material as part 
of an educational or research project. A technology may exist or be 
created that can block P2P transactions, but we would be reluctant to 
embrace technology that would block both legitimate and illegitimate 
uses indiscriminately. Nor do we wish to stifle the very creativity and 
experimentation that has brought us the extraordinary technological 
capacities that enrich our lives today. Many aspects of this nation's 
capabilities in information technology and networked communications 
were developed on research university campuses; we want to be certain 
that we preserve and nurture that continuing capacity within the 
academic community for creation and discovery.
    Let me illustrate how these concerns play out at my own university. 
Penn State has a vigorous program of copyright education for our 
students and employees. Before getting an account, individuals must 
agree that they understand and will comply with federal and state laws 
in addition to Penn State's acceptable use policies. The account 
agreement has a lengthy section dealing with copyright compliance. 
Likewise, when they get additional services they must agree to policies 
that include a proscription against copyright infringement.
    We also have an indirect enforcement effort. Audio and video files 
are large, and we monitor the amount, but not the content, of traffic 
to and from individual machines. Residence Hall users are limited to 
1.5 gigabytes of inbound or outbound traffic per week. There are 
increasingly severe restrictions for offenders who exceed these 
limitations, beginning with a decrease in the speed allowed for the 
network connection. For persistent violators there is a complete 
suspension of network access. The limitation on bandwidth, coupled with 
the threat of suspension of access, is intended to discourage copyright 
infringement. Additionally, when notified by copyright holders of 
infringement, we comply vigorously with the Digital Millennium 
Copyright Act (DMCA) and immediately suspend access until the issue is 
resolved. We received 153 such complaints in calendar year 2001. 
Although we do not currently monitor content to detect the fingerprints 
of pirated, copyrighted material, we would consider such a possibility 
if technology, functional for a university of our size, allowed us to 
maintain the educational principles to which we subscribe.
    We also employ proactive technical means to disrupt infringing 
activities. For example, we routinely scan our networks to find 
machines that have been compromised in some way or another. One of the 
primary motivators for intruders to compromise our machines is the 
establishment of unauthorized outside ``Warez'' servers, which are 
generally used for illegally trading copyrighted materials. In just the 
last few weeks alone, our scanning efforts have located more than 100 
such intrusions. Network access to compromised computers is disabled 
and the illicit software is removed. We also educate the victim whose 
system has been compromised on how to prevent future compromise of 
their computer.
    Yet despite these educational efforts, despite our compliance with 
DMCA, and despite our technical interventions, it is probably fair to 
say that thousands of our students illegally download some amount of 
copyrighted material. They are typical of college students nationally 
in this regard and are party to a practice that is morally wrong, is 
damaging to the entertainment industry, and is inconsistent with the 
values of honesty and integrity that students more typically profess.
    I believe that the work of our joint committee's education and 
technology task forces will identify a number of useful practices that 
we intend to share broadly within the higher education community.
    One of the great strengths of this country's system of higher 
education is its extraordinary diversity--public and private 
institutions, research universities, liberal arts colleges, and 
community colleges. No single set of policies and procedures for 
managing P2P technologies is likely appropriate for all, but if we 
identify a number of educational and technological approaches that have 
been effective in different settings, we can provide useful examples to 
colleges and universities that will both encourage and guide them in 
taking actions appropriate to their local circumstances.
    At the same time that higher education officials are developing and 
implementing educational policies and technological interventions, the 
content community is developing new business models for marketing 
copyrighted material, including music and movies. I am hopeful that 
this combination of effort will go a long way to eliminating the misuse 
of P2P technologies and facilitate the development of the positive 
potential of P2P.
    The capacity for the illegitimate use of P2P is of course not 
limited to colleges and universities. Indeed, the entertainment 
industry has sent letters to private sector companies expressing their 
concern about such misuse. Moreover, as this nation develops greater 
broadband capacity throughout society, from K-12 education to home 
connections, we will face the same potential in many other settings.
    This is not a new problem; the nation has faced such challenges 
with each advance of communications technology--the VCR is but one 
familiar example. The ideal intellectual property model for higher 
education today, in this new digital territory, is one that finds 
appropriate and effective ways of balancing, in the tradition of 
Copyright law, the proprietary rights of copyright owners and the 
limitations and exceptions to those rights.
    Let me close by saying that I believe higher education is taking 
seriously its responsibility to deal appropriately with these new 
intellectual property challenges. I believe our cooperation with the 
entertainment industry in this effort will help both sectors identify 
appropriate actions to take. I appreciate the interest of this 
subcommittee in this important issue, and I would be pleased to keep 
you informed of the work of our joint committee.
                               __________
 joint committee of the higher education and entertainment communities
Higher Education Representatives

Molly Corbett Broad
  President
  University of North Carolina

John L. Hennessy
  President
  Stanford University

Charles Phelps
  Provost
  University of Rochester

Dorothy K. Robinson
  Vice President and General Counsel
  Yale University

Graham Spanier (co-chair)
  President
  The Pennsylvania State University

Staff

Mark Luker
  Vice President
  EDUCAUSE

Shelley Steinbach
  Vice President and General Counsel
  American Council on Education

John Vaughn
  Executive Vice-President
  Association of American Universities

Entertainment Industry Representatives

Roger Ames
  Chairman and CEO
  Warner Music Group

Matthew T. Gerson
  Senior Vice President, U.S. Public Policy and Government Relations
  Vivendi Universal

Sherry Lansing
  Chairman
  Paramount Pictures

Hilary Rosen
  Chairman and CEO
  Recording Industry Association of America

Cary Sherman (co-chair)
  President
  Recording Industry Association of America

Jack Valenti
  President and CEO
  Motion Picture Association of America

Staff

Fritz Attaway
  Executive Vice President Government Relations and Washington General 
        Counsel
  Motion Picture Association of America

Troy Dow
  Vice President and Counsel for Technology and New Media
  Motion Picture Association of America

Mitch Glazier
  Senior Vice President, Government Relations and Legislative Counsel
  Vivendi Universal

Barry Robinson
  Senior Counsel for Corporate Affairs
  RIAA

Jonathan Whitehead
  Vice President and Anti-Piracy Counsel
  RIAA

    Mr. Smith. Thank you, Dr. Spanier.
    Ms. Render?

   STATEMENT OF ROBYN RENDER, VICE PRESIDENT FOR INFORMATION 
        RESOURCES AND CIO, UNIVERSITY OF NORTH CAROLINA

    Ms. Render. Chairman Smith and other distinguished Members 
of the Subcommittee, thank you for the invitation to appear 
before you today to offer one perspective on how 
representatives from the higher education community are working 
in collaboration with our counterparts in the entertainment 
industry to address concerns regarding peer-to-peer file-
sharing.
    The University of North Carolina is the oldest public 
university in America, an institution that encompasses 16 
diverse campuses, 9,000 faculty, and 177,000 students.
    Molly Corbett Broad, president of the University of North 
Carolina, currently serves on the Joint Committee of Higher 
Education and Entertainment Communities, which has brought 
representatives of our respective groups together to examine 
ways to reduce inappropriate use of peer-to-peer file-sharing 
technologies on colleges and universities, as well as to 
explore prospects for narrowing our differences on existing and 
proposed Federal intellectual property legislation.
    President Broad also serves as co-chair, along with Jack 
Valenti, president and CEO of the Motion Picture Association of 
America, of this joint Committee's legislative task force. The 
charge of the task force is to discuss current and proposed 
legislation on which we differ to see if we can, through candid 
exploration of the issues, find ways to narrow our differences 
or develop mutually acceptable alternative proposals.
    The relevant issues surrounding P2P are complex, as you are 
well aware. The Academy brings a unique perspective to these 
discussions, since intellectual property forms the very essence 
of the American university. Our institutions have been built, 
in large part, on the creation of intellectual property and 
respect for intellectual property of others.
    Within the higher education community, such creation and 
use must be carried out in the context of academic freedom and 
fair use--interests that are sometimes in conflict with those 
of the entertainment community.
    We are equally committed, however, to addressing 
unauthorized trading of copyrighted material. Our shared 
concerns form a common ground that is the basis for serious 
cooperation and dialogue.
    While most universities treat the Internet and attending 
network services as yet another university forum and resource, 
it is uniformly recognized that the effective management of 
these tools must include upholding responsible use of limited 
resources, protecting the privacy of students, faculty, and 
staff, and obeying the laws of the land.
    Federal legislation that would force policies and practices 
prohibiting such acceptable and legitimate use of P2P would 
threaten the central values of the higher education community. 
We believe a multifaceted approach is needed, a sensible one 
that emphasizes education and good citizenship; articulates 
thoughtful, yet adequate policy; utilizes appropriate network 
management tools; and addresses violations when they occur, but 
only after due process.
    As a representative of the University of North Carolina, 
let me offer a sampling of how our 16 diverse campuses are 
addressing these complex issues.
    For several years now, our campuses have exhibited 
leadership in addressing copyright infringement with special 
emphasis on the issues surrounding student use of P2P 
applications. During this period, we have monitored increased 
utilization of bandwidth on UNC campus networks and 
periodically have carried out our proactive evaluations and 
policy reviews. All 16 UNC campuses have adopted acceptable use 
and copyright policies. Our campuses have been working together 
for the past couple of years to find appropriate ways to manage 
network traffic resulting from increased P2P traffic.
    Traffic from major sites has been monitored and throttled 
when necessary to protect the campus networks from excesses and 
unacceptable usage. Several different solutions are applied, 
however, to the problem, depending upon campus size, network 
complexity, and culture.
    UNC campuses have taken responsibility for educating their 
students to the legal and moral implications of copyright 
theft, and we are willing to share our efforts with other 
institutions.
    UNC-Chapel Hill, for example, has created a Web site and a 
companion document entitled, ``Copyright and Acceptable Use on 
the University Network: A Primer,'' which provides answers to 
frequently asked questions such as: What is fair use? What kind 
of activities are probable violations of copyright law? What is 
considered unacceptable use at the University of North Carolina 
at Chapel Hill? Are MP3s illegal? And what will happen if I get 
caught?
    Looking to the future, the University of North Carolina 
awaits the results from the Joint Committee of Higher Education 
and Entertainment Communities Technology Task Force. The staff 
of this task force will perform an assessment of the various 
software products that are commercially available for use by 
higher education institutions to protect resources and prevent 
infringement.
    Once this work is completed, our university will examine 
past approaches and consider next steps. Fortunately, there are 
laws that allow the debate regarding how to approach illegal 
and inappropriate use of P2P to continue with some very 
appropriate protections intact. We should shape our IT policies 
around our core academic mission and search for a variety of 
alternative approaches.
    Thank you.
    [The prepared statement of Ms. Broad follows:]
               Prepared Statement of Molly Corbett Broad
    Chairman Smith and other distinguished members of the Subcommittee:
    Thank you for the invitation to appear before you today to offer 
one university president's perspective on how representatives from the 
higher education community are working in collaboration with our 
counterparts in the entertainment industry to address concerns 
regarding peer-to-peer (``P2P'') file sharing. As president of the 
University of North Carolina, I am responsible for the management of 
the oldest public university in America, an institution that 
encompasses 16 diverse campuses, 9,000 faculty, and 177,000 students.
    I currently serve on the Joint Committee of the Higher Education 
and Entertainment Communities, which has brought representatives of our 
respective communities together to examine ways to reduce the 
inappropriate use of peer-to-peer file-sharing technologies on college 
and university campuses, as well as to explore prospects for narrowing 
our differences on existing and proposed federal intellectual-property 
legislation. I also serve as co-chair--along with Jack Valenti, 
president and CEO of the Motion Picture Association of America--of this 
Joint Committee's Legislative Task Force. The charge of the task force 
is to discuss current and proposed legislation on which we differ to 
see if we can, through candid exploration of the issues, find ways to 
narrow our differences or develop mutually acceptable alternative 
proposals. The first meeting of the task force was a casualty of your 
recent snowstorm, but we are working to reschedule the meeting as soon 
as feasible.
    The relevant issues surrounding P2P are complex, as you are well 
aware. The Academy brings a unique perspective to these discussions, 
since intellectual property forms the very essence of the American 
University. Our institutions have been built in large part on the 
creation of intellectual property and respect for the intellectual 
property of others. Within the higher education community, such 
creation and use must be carried out in the context of academic freedom 
and fair use--interests that are sometimes in conflict with those of 
the entertainment community. We are equally committed to addressing 
unauthorized trading of copyrighted materials. Our shared concerns form 
a common ground that is the basis for serious cooperation and dialogue.
    Most American universities treat the Internet and attending network 
services as yet another university forum and resource. Technology 
leaders at these institutions therefore follow the guiding principles 
of academic freedom and fair use in developing policies and practices 
for network management and policy administration. While these core 
values are consistent throughout the Academy, individual institutions 
vary widely in their academic missions, cultures, and processes for 
policy development. It is uniformly recognized, however, that effective 
management of campus resources must include upholding the responsible 
use of limited resources; protecting the privacy of students, faculty 
and staff; and obeying the laws of the land. Federal legislation that 
would force policies and practices prohibiting acceptable and 
legitimate usage of P2P technologies would threaten the central values 
of the higher education community.
    I believe a multi-faceted approach is needed, a sensible one that 
emphasizes education and good citizenship, articulates thoughtful yet 
adequate policy, utilizes appropriate network-management tools, and 
addresses violations when they occur--but only after due process. As 
president of the University of North Carolina, let me briefly describe 
how our 16 diverse campuses are addressing these complicated issues.
    For several years now, our campuses have exhibited leadership in 
addressing copyright infringement, with special emphasis on the issues 
surrounding student use of P2P applications. During this period, we 
have monitored the increasing utilization of bandwidth on UNC campus 
networks and periodically have carried out proactive evaluations and 
policy reviews. Specific actions taken as a result include:

         LIn the fall of 2000, the UNC Office of the President 
        conducted a Wide-Area Network Traffic Analysis to assess the 
        need for a University-wide network management strategy.

         LAll 16 UNC campuses have adopted acceptable use and 
        copyright policies. Our campuses have been working together for 
        the past couple of years to find appropriate ways to manage 
        network traffic resulting from increased P2P traffic. Traffic 
        from major sites for Napster, Morpheus, KaZaa, and others has 
        been monitored and throttled when necessary to protect the 
        campus networks from excessive and unacceptable usage. Several 
        different solutions are applied to the problem, depending upon 
        campus size, network complexity, and culture.

         LUsing a pass-through state appropriation, UNC 
        contracts for inter-campus networking services with MCNC, a 
        unique corporation that offers access to advanced electronic 
        and information technologies and services for business, 
        government agencies, and North Carolina's education 
        communities. Working with MCNC, UNC campuses are monitoring 
        network traffic consistently and developing appropriate 
        strategies to manage inter- and intra-campus networks 
        effectively as the technologies continuously change and evolve.

         LNetwork management and monitoring tools are available 
        to assist network administrators in managing traffic types and 
        in working within the university policy-setting process to 
        effect policy regarding use of the network. Many UNC campuses 
        are using such tools, and our plans for building out an 
        upgraded inter-campus network include providing such tools to 
        each campus.

         LUNC campuses have taken responsibility for educating 
        their students about the legal and moral implications of 
        copyright theft, and we are willing to share our efforts with 
        other institutions. Disciplinary measures should be a part of 
        and consistent with campus student disciplinary procedures. 
        Education and counseling come first, but violations of state 
        and federal law may be prosecuted.

    UNC's two research-extensive institutions--the University of North 
Carolina at Chapel Hill and North Carolina State University--have taken 
leadership positions on the use of P2P applications by clearly 
articulating campus policies regarding copyright infringement and the 
acceptable use of their campus networks. Information sessions with 
students are held as appropriate to discuss the issue and to provide 
guidance and notification of sanctions for violations.
    UNC-Chapel Hill, for example, has created a web site (http://
www.unc.edu/policy/copyright--primer.html) and companion document 
entitled, ``Copyright and Acceptable Use on the University Network--A 
Primer,'' which provides answers to frequently asked questions, 
including:

         LWhat is Fair Use?

         LWhat kinds of activities are probable violations of 
        copyright law?

         LWhat is considered unacceptable use at UNC-Chapel 
        Hill?

         LAre MP3s illegal?

         LWhat will happen if I get caught?

    Looking to the future, the University of North Carolina awaits the 
results from the Joint Committee of the Higher Education and 
Entertainment Communities' Technology Task Force. The staff of this 
task force will perform an assessment of the various software products 
that are commercially available for use by higher education 
institutions to protect resources and prevent infringement. Once this 
work is completed, our University will re-examine past approaches and 
consider next steps.
    As university leaders, we must adapt to changes in technology and 
the legal landscape in very technical ways, but in doing so, we must 
remain grounded in the basic, fundamental values of the university and 
our historic commitment to openness in academic discourse and in the 
exchange of ideas. Fortunately, there are laws that allow this debate 
to continue with some very important protections intact. We should 
shape our IT policies around our core academic mission and values, and 
we pledge to work with the content community to broaden their 
understanding of the Academy and our need for varied, alternative 
approaches.
    Thank you.

    Mr. Smith. Thank you, Ms. Render.
    Mr. Hale?

STATEMENT OF JOHN HALE, ASSISTANT PROFESSOR OF COMPUTER SCIENCE 
 AND DIRECTOR, CENTER FOR INFORMATION SECURITY, UNIVERSITY OF 
                             TULSA

    Mr. Hale. Mr. Chairman, Ranking Member Berman, and Members 
of the Subcommittee, I would like to thank you for the 
opportunity to come here and speak on an issue that is of 
extreme importance to our universities and, of course, to 
copyright owners worldwide.
    As an assistant professor of computer science at the 
University of Tulsa, I've seen media piracy on college campuses 
pace the evolution and growth of the Internet and now 
experience a true revolution with peer-to-peer networking.
    College students are early adopters of new technology. 
Unfortunately, many of them have a casual attitude about peer-
to-peer file-sharing, and most do not appreciate the security 
implications of participating in a peer-to-peer network.
    Like other universities, we're trying to cope with these 
problems without sacrificing student liberties. We've responded 
to complaints of copyright infringement and worked to prevent 
the continued violations of known infringers. We can also block 
certain types of peer-to-peer network traffic, while allowing 
students to use and enjoy a broad spectrum of Internet 
services.
    The Center for Information Security at TU is also doing its 
part to combat Internet piracy. Changing the mindset of 
students is perhaps the biggest challenge, but it is our job as 
educators.
    Aside from piracy, another concern is how P2P software 
clients can produce increased security vulnerabilities. All 
software has flaws, and some flaws create exposures that can be 
exploited. Several factors, however, conspire to make security 
exposures in P2P software much more serious.
    First, P2P clients connect systems to massive ad hoc 
networks that are beyond the administrative control of an 
enterprise. This dramatically amplifies exposures to external 
threats. P2P clients are also starting to make use of 
``tunneling'' and ``port-hopping'' techniques to avoid 
detection by network firewalls and filters.
    Another factor is the emergence of executable media 
content, such as can be found in Microsoft's Advanced Systems 
Format and the MPEG-4 standard. The scripting environments that 
support these technologies can also be abused. E-mail 
attachments became a popular mode of computer virus 
transmission only after the introduction of scripting in word-
processing documents and Web pages.
    The potential impact of self-replicating code on a peer-to-
peer network is best seen in the Code Red, Nimda, and Slammer 
worms that targeted Internet Web servers. In the case of a P2P 
worm, the damage could be more widespread and much harder to 
repair. The recipe for this is simple--massive connectivity, 
exploitable software, and active content. It's probably just a 
matter of time before a high-profile event occurs.
    Yet another factor that affects the integrity of P2P 
clients is the common industry practice of spyware. The problem 
here is the trustworthiness of the embedded software. Spyware 
is also, by construction, difficult to detect and disable.
    These threats call for increased technical controls on P2P 
file-sharing. Techniques for monitoring and filtering traffic 
have been developed that work and are relatively nonintrusive. 
Unfortunately, they will become less effective over time as P2P 
developers integrate encrypted communications.
    For this reason, researchers at the Center for Information 
Security are exploring alternative schemes to protect media in 
peer-to-peer networks. In particular, we are studying two 
techniques, interdiction and file-spoofing.
    Interdiction swamps the download request queue of a 
copyright infringer so that other requests are starved out. 
While this approach need not impair general system or network 
performance, all download requests to the would-be infringer 
are impacted, even those that would not constitute a copyright 
violation.
    With file-spoofing, a group of clients flood a peer-to-peer 
network with search results linked to decoy media. Here, 
legitimate queries go unaffected, but more research must be 
done to evaluate how networks respond to large-scale 
deployment.
    Peer-to-peer network technology is elegant, robust, and it 
has a bright future in computing. But it is experiencing some 
serious growing pains, and this is nowhere more evident than on 
our college campuses. It will take a combination of efforts on 
multiple fronts to help this promising technology survive its 
adolescence.
    Users must be made aware of the risks of installing P2P 
clients. Attitudes toward piracy must change, and novel anti-
piracy technologies should be more closely examined.
    In closing, I would like to say that there is a lot at 
stake, and not just for copyright owners. Thank you.
    [The prepared statement of Mr. Hale follows:]
                    Prepared Statement of John Hale
    Mr. Chairman, Ranking Member Berman, and Members of the 
Subcommittee, I would like to thank you for the opportunity to come 
before you today and speak on an issue that is of extreme importance to 
American institutions of higher education and, of course, to copyright 
owners world-wide.
    As an Assistant Professor of Computer Science at the University of 
Tulsa and as an information security researcher, I have seen media 
piracy on college campuses pace the evolution and growth of the 
Internet, and now experience a true revolution with the advent of peer-
to-peer (P2P) networking. Broadband Internet access in dormitories and 
campus apartments has extended the perimeter of the university learning 
environment to beyond the traditional classroom and laboratory 
settings. Coupled with P2P technology, it has also created new 
opportunities for abuse.
    In particular, the high bandwidth available to college students and 
ready supply of music, movies, software and games courtesy of the most 
popular peer to peer networks have fostered an environment where piracy 
on a large-scale is not only possible, but commonplace. It is ironic 
that Internet2 institutions like the University of Tulsa could see a 
significant fraction of this new bandwidth, which was put in place to 
foster academic research and collaboration, used for illegal file 
sharing.
    College students are early and aggressive adopters of new 
technology. Unfortunately, many have an overly casual attitude about 
file sharing on peer-to-peer networks. Some do not even seem to see any 
real moral, ethical or even legal dilemma with media piracy over the 
Internet, and most do not fully appreciate the security implications of 
exposing a computer to a wide-open P2P network.
    Like other universities, The University of Tulsa is trying to cope 
with these problems without sacrificing student liberties. We have 
responded to complaints of copyright infringement and worked to prevent 
the continued violations of known infringers. We also have developed 
the capability to block certain types of peer-to-peer network traffic, 
while allowing students to use and enjoy a broad spectrum of Internet 
services.
    Moreover, and most unfortunately, our university may have to soon 
cap (or throttle) bandwidth in the residential halls at the request of 
our upstream Internet Service Provider, who provides Internet access to 
most of the four-year colleges in Oklahoma. This technique reduces the 
flood of network traffic to an acceptable level, along the way 
inhibiting (to some extent) mass file sharing, but also impeding any 
legitimate use of a network that might require substantial bandwidth 
resources. However, alternative traffic-shaping strategies exist that 
can pinpoint and mold peer-to-peer network flows with greater 
precision. The challenge here is in keeping up with new networks and 
technologies, and in staying on top of the constant game of cat-and-
mouse played between P2P developers and enterprise network security 
architects.
    The Center for Information Security within the University of Tulsa 
is also doing its part to combat Internet piracy and to raise awareness 
of unsafe computer use practices. Many of our information assurance 
classes directly address ethics and media piracy, and educate students 
on security issues and operational risks of running untrusted network 
applications. Changing the mindset of students is perhaps the biggest 
challenge, but it is by definition, our job as educators.
    Aside from piracy, another major concern is how P2P networking 
clients installed on university and student-owned computers can result 
in increased security vulnerabilities in a university network. All 
software has flaws, and some flaws create exposures that can be 
exploited to violate the security of a system. Several factors conspire 
to make the risks induced by security exposures in P2P software much 
more serious.
    The first factor is that P2P clients connect systems to massive ad 
hoc networks that are beyond the administrative control of any one 
enterprise. This extreme level of connectivity radically expands the 
security perimeter of a network. As a result, security vulnerabilities 
in P2P clients are accessible to every user on that P2P network, 
regardless of their location. In short, P2P clients dramatically 
amplify exposures to external threats.
    In an effort to maintain a larger network population, P2P client 
developers have implemented deceptive strategies in their clients to 
conceal file sharing activity from users and system administrators. 
Most of the more popular P2P clients do not totally shut down on an 
exit command from a user. Rather, they fade into the background, 
continuing to export shared folder contents. It is only when and if a 
user notices the small client icon in the system task bar that they 
have an opportunity to leave the file trading network. The goal is 
obvious: Less sophisticated users will exit the main interface, but not 
notice they are still connected to the trading network. Another risk 
confronts less sophisticated users. Haphazard configuration of a P2P 
client could result in sharing a folder containing sensitive data 
(instead of music), perhaps even unintentionally sharing the contents 
of an entire hard drive.
    P2P clients are also beginning to make more frequent use of 
``tunneling'' and ``port hopping'' techniques to avoid detection by 
network firewalls and filters. Tunneling embeds P2P messages within 
another protocol so that they blend in with other traffic, and become 
more difficult for firewalls and filters to detect. An alternative 
strategy is for clients to vary the communication ports they use (port 
hop), once again making it more challenging for blocking software to 
recognize P2P traffic.
    Another factor is the emergence of executable media content. 
Executable media content, such as is found in Microsoft's Advanced 
Systems Format and is now possible under the MPEG-4 standard, enriches 
an entertainment experience by providing multimedia enhancements and 
greater interactivity. Of course, the expressive scripting and 
programming environments that support these technologies can also be 
abused. Email attachments became a popular mode of computer virus 
transmission only after the introduction of scripting content in word 
processing documents and web pages.
    The weak ``viruses'' that have been reported on some peer-to-peer 
networks barely hint at the real potential of self-replicating code in 
these environments. More suitable examples can be found in the Code 
Red, Nimda and Slammer worms that targeted Internet web servers. In the 
case of a true P2P worm, the damage could be even more widespread, it 
could penetrate deeper into enterprise networks, and due to the 
stealthy nature of the client software, detection and remediation would 
be more problematic. The recipe is simple: massive connectivity, 
exploitable software, and active content. It is probably only a matter 
of time before a high profile event occurs.
    Yet another factor that affects the integrity of P2P clients, is 
the common industry practice of embedding spyware in them. P2P 
developers bundle spyware in their clients as a way to generate 
revenue. Spyware monitors user behavior and tracks user web browsing 
habits. The information collected by spyware is typically sold to 
direct-marketing companies. The problem here is the trustworthiness of 
the embedded software as it is routinely created by unknown third 
parties. Spyware is, by construction, difficult to detect and may be 
impossible to disable or remove from a client.
    These threats call for increased technical controls on file trading 
activity in enterprise networks. Techniques for monitoring and 
filtering P2P traffic have been developed and do work. And some of 
these strategies may require no more intrusiveness than extracting the 
``to'' and ``from'' addresses found in packet headers. Even the more 
sophisticated P2P signature detection schemes do not necessarily reveal 
who shares what on a network.
    Unfortunately, filtering and blocking will become less effective 
over time as P2P developers integrate additional counter measures. 
Ultimately, end-to-end encryption of communication channels will make 
it virtually impossible for system administrators and Internet Service 
Providers to monitor network traffic. For this reason, researchers in 
the Center for Information Security at the University of Tulsa are 
developing and analyzing alternative strategies for protecting digital 
content in peer-to-peer networks. ``P2P Fear and Loathing: Operational 
Hazards of File Trading Networks,'' a white paper we prepared for this 
Subcommittee in a September 2002 hearing, presents some of our early 
investigations and is submitted as part of this written testimony. In 
particular, we are studying two techniques, interdiction and file 
spoofing, that have been put into practice by some digital rights 
management companies. These techniques seek to impede copyright 
infringement through direct participation in peer-to-peer networks.
    Interdiction is a technique that swamps the download request queue 
of a copyright infringer so that other requests are starved out. This 
counter measure constitutes a high-level Denial of Service attack on a 
P2P client, but does not necessarily impair general system performance 
or the performance of the underlying network. One undesirable side 
effect of this approach is that all download requests to the would-be 
infringer are impacted, even those that would not constitute a 
copyright violation.
    Like interdiction, file spoofing inhibits copyright infringement 
through direct participation in peer-to-peer networks. However, while 
interdiction attacks the download process, file spoofing targets the 
search process. In this approach, a collection of clients flood a peer-
to-peer network with bogus search results linked to decoy media. File 
spoofing has one advantage in that legitimate queries can go 
unaffected, but more research needs to be done to evaluate how a 
network would respond to large scale deployment.
    Peer-to-peer network technology is elegant, robust and has a bright 
future in computing. But it is experiencing some serious growing pains, 
and this is nowhere more evident than on our college campuses. It will 
take a combination of efforts on multiple fronts to help this promising 
technology survive its adolescence. Users must be made aware of the 
risks of installing and running P2P clients on personal and enterprise 
networks. Attitudes towards piracy must change. And the potential of 
novel anti-piracy technologies should be more closely examined. There 
is a lot at stake, and not just for copyright owners.

                               ATTACHMENT






    Mr. Smith. Thank you, Mr. Hale.
    It seems to me that one of our goals today is to try to 
determine what model works and also try to measure just how 
successful the models to date have been. Penn State and UNC 
have been setting the pace, I think, on college campuses today 
as to what should be done and can be done. And that sort of 
will be the line of questioning that I'm going to embark on.
    Ms. Rosen, let me direct my first question to you. In your 
prepared statement--and by the way, I should say to you, I know 
you've announced that you're going to be leaving your position 
at the end of the year. We're all going to miss you.
    Ms. Rosen. Thank you, Mr. Chairman.
    Mr. Smith. But I appreciate your being here today, 
particularly since I know you haven't been feeling well. So 
thanks for making the effort.
    In your prepared testimony, you said you expected a number 
of technologies will show potential, and you say that you hope 
in the future that legitimate online music subscription 
services will have a greater presence on campuses.
    But what is the goal of the RIAA? How much do you want to 
reduce campus piracy? What will you consider to be a success 
from implementing the education, the enforcement, the 
technology?
    Ms. Rosen. That's an excellent question and one which 
doesn't have an easy answer. I think no one is under the 
illusion that we're going to stop peer-to-peer activity or 
eliminate online piracy. I think what we want to do, though, is 
get it to a point where the legitimate business is actually 
thriving online and so that there is a chance for new 
investment, new artists, and new opportunities in the online 
area.
    And right now, that's just being drowned out. So that there 
has been, you know, hundreds of millions of dollars of 
investment in bringing legitimate services online. And so, we 
have to find--right now, the balance is somewhere like this. I 
think we'd like it to be somewhere around here.
    Mr. Smith. Okay. So far, have you seen any appreciable 
reduction as a result of these various measures?
    Ms. Rosen. No. I think to date what we've seen is that 
these companies are having an extremely difficult time 
competing with free, if you will. And in large measure, I think 
that will continue.
    Mr. Smith. That's a tough business model to compete with, 
when the competition is free. You're right.
    Dr. Spanier, let me go to you, and thank you for your 
forceful comments as well and for what you're doing on campus.
    As a result of these efforts--and as I say, I think you're 
leading the way--have you seen any reduction because of your 
educational and enforcement efforts? Have you quantified your 
success?
    Mr. Spanier. It's hard to know for sure because we have so 
many students and our networks are so large. I suspect what has 
happened, if I can guess at the trend, is that the 
infringement--the gross infringement by smaller numbers of 
students who, if we provided them unlimited bandwidth, would 
have continued to explode. That has been curtailed because we 
do have this--we have, through technological means, narrowed 
the pipe for them. We're just not permitting massive 
infringement.
    But what I think still exists is that we have thousands of 
our students who do a modest amount of it, and therein lies the 
problem. If you have thousands of students at a large 
university like ours who are doing some of it, you multiply 
that by all of the college students in the country, it is a 
problem of the magnitude that several of you summarized.
    Mr. Smith. Right. On the Penn State campuses, what would be 
your guess as to what percentage you have reduced that illegal 
downloading? It would be 10 percent or more or less?
    Mr. Spanier. It would be hard to say. Again, I think we 
have reduced substantially the illegal downloading of some 
infringers who were doing it in a very substantial way. But we 
still undoubtedly have a lot of students who are doing some of 
it.
    It's also fair to point out, and I think one could discern 
this from several of our comments, that for a university like 
ours, as near as I can tell, somewhere in the neighborhood of 
three-fourths of the activity on our network----
    Mr. Smith. Is off campus.
    Mr. Spanier. Exactly. Is people coming in from outside and 
using our students' computers to upload material that is 
leaving the campus.
    We have done something that I don't think very many 
universities have done. We're employing some proactive 
technical means to disrupt infringing activities by routinely 
scanning our networks to find machines that have been 
compromised in some way or another.
    And one of the primary motivators for intruders to 
compromise our machines is the establishment of unauthorized 
outside ``Warez'' servers, which are generally used for 
illegally trading copyrighted material. Just since January 1st 
of this year, we have found over 100 such intrusions into 
computers of our students in our own residence halls.
    We go in. We take them off-line. We help them fix their 
computer, and then we educate them about what's happening. And 
this really is a very good example of what our technical expert 
here was describing.
    Mr. Smith. Right. Thank you, Dr. Spanier.
    Ms. Render and Dr. Hale, I hope to have a chance to ask you 
all some questions later on. Right now, I'll recognize the 
gentleman from California, Mr. Berman, for his questions.
    Mr. Berman. Well, thank you very much, Mr. Chairman. And I 
join you in expressing best wishes and appreciation for the 
work of Hilary Rosen in her stewardship of the RIAA. She is 
rock-n-roll. No. [Laughter.]
    And she gives as good as she gets, and she gets it a lot, 
and from all sides. And does it with grace and wisdom and 
skill, and we're going to miss her. But hopefully, this isn't 
her farewell song today.
    The academic witnesses are, in the context of all of this 
problem, the good guys. They all represent institutions and 
organizations that are sensitive to the problem, are focused on 
the problem, are trying to do some things about the problem. 
And I appreciate that, and I hope you won't take my questions 
as hostile.
    But I do see in your testimony some flaws in your software, 
and I would just like to exploit them a little bit. That sounds 
weird. No. [Laughter.]
    Let me start with President Spanier. You acknowledge the 
infringing nature of this activity. But your testimony is 
reluctant to support blocking P2P transactions because, in 
selected cases, there might be a fair use?
    Mr. Spanier. Yes.
    Mr. Berman. In the context of the uploading and downloading 
we're talking about, where you're spreading it to thousands and 
thousands of people, could you explain to me that hypothetical 
case of fair use?
    Mr. Spanier. Yes. Well, as I said only very briefly, there 
are clearly legitimate uses of peer-to-peer file-sharing. I 
would agree with Hilary Rosen that that is not typically how 
that technology is used now.
    Mr. Berman. I'm just trying--but you talked about there 
certainly are--there are authorized works being distributed 
probably that we all know and none of us want to ban P2P 
networks.
    Mr. Spanier. Yes. Yes.
    Mr. Berman. So I think we should take that off. That's not 
something Congress, I think, is seriously contemplating.
    But you put it into the context of a fair use, a copyright 
protected work whose distribution on a P2P system would be a 
legitimate fair use. And I'm just wondering what that example 
is.
    Mr. Spanier. Well, the example is not any different than it 
has been for decades in copyright law in the United States. 
There are many, many examples when we had printed material, 
where professors and students and librarians would recognize 
that it was quite legitimate for instructional, research, and 
other academic purposes to make fair use of copyrighted 
materials, which might include using excerpts or taking 
material and using them in legitimate way in a classroom 
setting.
    And it is also the case that in a digital environment, 
there may be some legitimate fair use of copyrighted materials.
    Mr. Berman. Remember, we're talking about distribution on a 
peer-to-peer system that has millions of people. I'm trying to 
understand what--I know all kinds of examples of fair use.
    Mr. Spanier. Well, if, for example, we have a faculty 
member who is in the School of Music or in our program in 
integrative arts or someone teaching cultural studies who is 
looking at the impact of certain types of music in our society, 
and part of a classroom assignment is for students to learn 
about the music or analyze the lyrics, it would be quite 
legitimate, I think, to look at that music, to use it, to have 
it be part of the classroom presentation.
    It would be legitimate for a doctoral student who was doing 
a study of cultural trends to look at these questions. Those 
would be examples off the top of my head.
    Mr. Berman. Well, I couldn't agree more. But none of that 
involves uploading a copyrighted work of music in its entirety 
onto a system which then allows it to be distributed to 
millions of people.
    Mr. Spanier. To millions of people? No, absolutely not.
    Mr. Berman. But that's what this file-trading on P2P 
systems is.
    Mr. Spanier. Well, quite right, and I would be the first to 
acknowledge that, that the principal use at the moment of the 
peer-to-peer file-sharing technology is to illegally download 
or upload to others copyrighted material. And that is wrong, 
and that is something we have to cooperatively work at 
stopping.
    What we're concerned about in the higher education 
community is not throwing the baby out with the bath water. We 
want to protect fair use in all of its respects, not just in 
relation to music. This is a much larger issue for our 
community of librarians and for our network administrators and 
for our researchers than just music.
    Secondly, we want to recognize that there is a lot of 
marvelous research going on on the use of peer-to-peer 
networks, which is still in its infancy. And unfortunately, in 
its infancy, it's mostly being used improperly. But it has 
great opportunities in the scientific community to be used 
well, and there are even studies being funded by the National 
Science Foundation to help work on that technology.
    Mr. Berman. My time is up, so I don't have any time for 
more questions. But let me just say in--there are--universities 
are using blocking technologies to stop legal activities--spam, 
pornography--because only certain kinds of obscenity which--
pornography which meet an obscenity standard are illegal. 
They're using--and, in many cases, thereby blocking legal 
transmissions.
    They're not drawing some kind of calibration which says 
because there is something legal that might be taking place, we 
can't use any blocking technology. There are a thousand 
different ways to make sure that fair use rights are ensured: 
e-mails--digitally--e-mails, limited networks that aren't 
publicly accessible to ensure that this kind of research and 
collaboration and instruction can take place using copyrighted 
works in ways that are acknowledged to be fair use.
    I just think it's funny to prevent any blocking technology 
here because there is a theoretical possibility of a fair use, 
which I can't quite put my finger on, when there are many other 
ways to distribute it. And then to use that same blocking 
technology for a variety of other efforts, to stop hate speech 
and pornography and spam, some of which is clearly legal 
communications. But thank you.
    Mr. Spanier. There have been efforts to block certain 
things. It turns out, at this point in time, they're not all 
that successful because people have found so many ways to 
defeat them.
    But this, in fact, what you've just described, and it's an 
excellent point, is the charge to our technology Subcommittee, 
to explore the different technologies that are out there, to 
study them, sponsor pilot studies, and ultimately to come up 
with solutions that universities could use if they so choose to 
use them.
    We're not sure a one-solution-fits-all outcome is workable. 
But we want this Committee to survey what's out there, test it, 
present them to the university community. And I think when we 
have that and when we know what's really possible and what will 
work, I do expect that some universities will adopt some 
remedies that go beyond what I've described at Penn State.
    And as I mentioned in my comments, Penn State would be 
willing to go even further if we knew that it worked and that 
it could really be done well, could be ramped up to a 
university of our size, which, for example, transmits 3 million 
electronic e-mail messages a day, and not all solutions, it's 
clear, would work for our systems. We'd be willing to look at 
something like that.
    Mr. Smith. Dr. Spanier? We need to move on. Thank you for 
your comments.
    Thank you, Mr. Berman.
    The gentleman from Tennessee, Mr. Jenkins, is recognized 
for his questions.
    Mr. Jenkins. Thank you, Mr. Chairman.
    Dr. Spanier, you perhaps approached this, but nothing has 
been said about going down to the U.S. Attorneys Office or the 
local district attorney in an effort to stop this illegal 
practice.
    Has your legal staff, have they gone to the U.S. Attorneys 
Office or to the district attorney's office in an effort to 
present whatever cases you may have knowledge of?
    Mr. Spanier. No. We don't typically handle the problem that 
way. As I mentioned----
    Mr. Jenkins. Well, if on your campus, you had an assault 
and battery or you had a robbery or you had a murder, you would 
go down to the local district attorney's office, would you not, 
and consult with them?
    Mr. Spanier. Here's how we view it at the university. We 
are, first and foremost, educational institutions. The lion's 
share of our students are in that transition from adolescence 
to adulthood. So our approach, first of all, is an educational 
one. We try to educate them.
    If that educational approach doesn't work, we restrict 
their service or deny them access. If we find that they are 
repeat offenders and trying to circumvent our systems, then 
they are charged through the university's judicial affairs 
process, and their status at the university as a student can be 
affected. They can be suspended, expelled.
    We look to those kinds of mechanisms before we would ever 
want to put this into a criminal situation.
    Mr. Jenkins. And you're doing as much as anybody in the 
country, and I, too, compliment you for it. But let me ask Ms. 
Rosen, and you're not in this business to provide an 
educational opportunity, have your folks gone down to the U.S. 
Attorneys Office or the district attorney's office?
    I know there are some statutes. I know early on there were 
some test cases. They wound up with acquittals. But since then, 
the law has been changed. And so, have you gone down to the 
U.S. Attorneys Office or the district attorney's office in the 
States?
    Ms. Rosen. Well, I think we should separate this into two 
areas. On the university side, we actually send about 2,500 
notices a month to universities around the country when we see 
egregious users uploading files, making files available. And 
usually, you know, to a university, they take them down or they 
deal with the student or they address it.
    So, really, where we have--and that's why we're focusing 
now with the university community on deterrence as opposed to 
punishment. And what we are looking at, though, in the rest of 
the world--I mean, there are obviously other bandwidth 
providers like ISPs have not been as cooperative as 
universities are, and that issue, indeed, is in court.
    But there are Federal criminal statutes that affect this. 
And we have also encouraged the Department of Justice to look 
at deterrence programs because their use is so widespread.
    Prosecution on individual basis is extremely difficult. But 
deterrence might be an avenue for them to go down as well.
    Mr. Jenkins. Now, Ms. Render, you were not as sure as the 
others that those criminal statutes might be effective, as I 
understood your testimony. Is that right? I believe you said 
there were considerable roadblocks that were placed in the way 
of policing this?
    Ms. Render. I'm not exactly sure which of my comments you 
are referring to. But let me reiterate that, very similar to 
Penn State, I mean, we have levels of offense. And what we have 
found, not being able to quote specific numbers, but on most of 
our campuses, only about 1 percent are repeat offenders after 
they have gone through some form of education and an attempt 
for remediation as to any kind of potential infringement of 
copyright material.
    Talking about some of the, I guess, roadblocks or 
complications, I think there are still questions about the 
universities' obligations and responsibilities. I think there 
are competing laws around privacy and other issues that we have 
to take into consideration. And so, because it's multifaceted, 
I think that's the primary reason for a very careful and 
deliberate approach.
    Very encouraged by the potential of the outcome of the work 
of the technology task force particularly that might give us 
further information about how we can use the technology in a 
way that will not be conflicting between those laws of privacy 
and those laws protecting copyrighted material.
    Ms. Rosen. Mr. Jenkins, could I just comment briefly on the 
law for 1 minute?
    Mr. Jenkins. Sure.
    Ms. Rosen. The law is clear in this area that making files 
available for the distribution to millions of strangers on P2P 
networks is illegal. And there has never been an acquittal. The 
criminal statutes are clear, as the civil statutes are clear. 
There is no privacy issue associated with that. The----
    Ms. Render. If I could----
    Mr. Jenkins. Well, Ms. Render, if 1 percent of your 
students at the University of North Carolina were repeat 
offenders in assault and battery, would you give them the same 
consideration as you give these offenders, these repeat 
offenders in this area?
    Ms. Render. Well, it's my assessment that we treat students 
pretty consistently regardless of the type of crime or 
potential crime that is--that they may be accused of. And so, 
in the very same way, I think that our students are initially 
given a first chance, an opportunity to be educated and 
informed. And then as the severity of their conduct or their 
crime increases, we take more severe action.
    Clarifying on my comment, what I was referring to was not a 
conflict in the law from the standpoint of whether or not 
copyright is criminal, I was talking about the responsibility a 
university has as far as following the law of the land and also 
following laws relative to privacy and protection. As far as 
things like divulging the names of students, et cetera, was the 
example I was giving.
    Mr. Jenkins. Thank you, ma'am.
    Mr. Smith. Thank you, Mr. Jenkins. The gentlewoman from 
California, Ms. Waters, is recognized. But Ms. Waters, would 
you yield to me for a second?
    Ms. Waters. Thank you.
    Mr. Smith. Okay. I wanted to follow up on Mr. Jenkins's 
question of Ms. Rosen and ask her very, very quickly if you 
would ever consider taking legal action against individuals?
    Ms. Rosen. Well, right now, nothing's off the table. I 
think in the university environment, we are extremely 
optimistic that the universities are not taking the position 
that Ms. Render just articulated, that they don't have an 
obligation to notify students of wrongdoing. And even better, 
that Dr. Spanier and his colleagues are leading a proactive 
effort on deterrence.
    But with regard to the rest of the use, you know, we have 
clearly and publicly repeatedly said that nothing is off the 
table now.
    Mr. Smith. Okay. Thank you, Ms. Rosen.
    Thank you, Ms. Waters, and you are recognized.
    Ms. Waters. Thank you very much. I'd like to ask any of the 
witnesses representing universities, have you ever expelled 
anyone because of the illegal and inappropriate use of a P2P? 
At Penn State?
    Mr. Spanier. To my knowledge, we haven't expelled anyone. 
And the reason probably is by the time they get into that zone, 
if I'm remembering right, we give them three chances at Penn 
State. By the time they get to that point, we have closed down 
their access to our networks entirely. They're not allowed to 
use it, so they don't--they don't get a fourth chance.
    Ms. Waters. But basically, they are allowed to break the 
law three times before----
    Mr. Spanier. What we do is we're not making a determination 
at that point about whether they're breaking the law, because 
we have not gone in and taken their computers to see what's 
inside of them.
    What we have done is given them ample warning that they are 
exceeding their permitted use of the university's bandwidth, 
which has given us the suspicion, unless they can come up with 
a compelling reason, we have assumed that they are illegally 
downloading----
    Ms. Waters. Doing something illegal. Okay.
    Mr. Spanier [continuing]. Music or videos. And so, when 
they get to that third infraction, their use is suspended 
entirely. So that's usually how it ends.
    Ms. Waters. Does anyone else know of any instance where a 
student has been expelled from university because of the 
illegal and inappropriate use of P2P?
    Ms. Render. No.
    Ms. Waters. No? All right. Let me just say this, I'm a 
little bit torn, a little bit torn about all of this because we 
encourage our students to be creative and curious and 
aggressive in the use of new technology, and I think that 
spirit dominates in this--in this society. And it's too bad 
that it does come in conflict with--that spirit--with some of 
the laws relative to copyright.
    However, I don't know if I can be of very much help as we 
discuss this issue because the fact of the matter is the 
universities of America are not going to criminalize America's 
middle-class children. You're just not going to do it.
    Perhaps if this was taking place in a regional occupation 
center in an inner-city, where kids were basically stealing 
other people's intellectual property, we'd see some movement. I 
don't think this Committee is going to do very much. I don't 
think the universities are going to do very much.
    The fact of the matter is, while I'm sympathetic to the 
young people, they're breaking the law. And it's a double 
standard here.
    And unless the university is willing to get tough--I mean, 
this business about ``we suspect,'' and ``we have limited the 
amount of use,'' and ``we go in and we check and we verify,'' 
and by that time, it's too late. They have been stealing for 4 
years, and then they're gone, I mean, that's just not--that's 
not acceptable. I mean, you know?
    I know what you're saying, and I know what you don't want 
to do. And I don't think that a public relations campaign--I 
think it should go on. But I don't think it should be a 
substitute for hard-core offenders who are in these 
universities.
    And this business about limiting their use, they just go to 
their friends. I mean, they get together with this, and they go 
down the hall somewhere and it just continues to go.
    And until the university or this Committee is willing to do 
something about it, we're just wasting everybody's time. I wish 
I could be more helpful, but it's pretty clear to me.
    Thank you, Mr. Chairman.
    Mr. Spanier. If I could just----
    Mr. Smith. Thank you, Ms. Waters.
    And, Dr. Spanier, if you'll be very brief in your response?
    Mr. Spanier. Yes, I just want to follow up on what you're 
saying because I understand your point, and it's an excellent 
one. But let me point out that the universities are actually 
trying to do something about this. We do have some 
opportunities to get a handle on this, and that is what we're 
working on.
    But let me point out that the universities are not the 
majority of the problem. The majority of what we're describing 
here is happening outside of the Nation's universities.
    Now with bandwidth of the kind we're talking about 
increasingly available right into the homes and into K-12 and 
everywhere else, it is a national problem that doesn't just 
rest squarely on the shoulders of the universities.
    So even if we are successful in solving this problem, and 
we are--we want to. We're working on it. It still doesn't 
change the fact that it's a broader issue. Hilary and her 
colleagues sent a letter to corporations across the country 
asking them to get a handle on this as well.
    And so I would just say that as your Committee works on 
this and takes action, please do keep in mind that the 
university is one part of the problem. But here we're actually 
working on it, and the rest of it is still going to be out 
there.
    Ms. Waters. If the gentleman will yield, today we're just 
dealing with the university. And of course, wherever crimes are 
being committed, the law should be applied. And this Committee 
certainly would support any efforts to use the law against 
those who are in violation.
    But today, we really are just talking about the university 
today. And just because it is being done outside, it certainly 
doesn't make it right for it to be done in the corporation or 
in the university or anyplace else. But I appreciate your 
problem.
    Mr. Spanier. I agree.
    Ms. Waters. Thank you.
    Mr. Spanier. Thank you.
    Mr. Smith. Thank you, again, Ms. Waters. The gentlewoman 
from Pennsylvania, Ms. Hart, is recognized for her questions.
    Ms. Hart. Thank you, Mr. Chairman.
    And I happen to agree with Ms. Waters on that point. If 
it's against the law, it's against the law. And it shouldn't 
matter whether it's a university student or somebody at home.
    I mean, our issue is--I think a large part of it is 
education, and that is education of young people to the fact 
that this is wrong, but they need more than that. If there is 
no consequences, as we all know, there won't be a change in 
behavior.
    Ms. Rosen, I have a question regarding some information we 
heard from a 2002 Consumer Trends Report that noted that file-
sharing is also growing with younger children--teenagers, 12-
18, who are not college students. Does the Recording Industry 
Association have any program where they work with high school 
students to try to replicate some of the things you're doing on 
college campuses, first?
    And if you are doing that, are you learning--some of the 
information that you're learning with universities, is that 
being applied also with the younger children?
    Ms. Rosen. You're right that probably, in some respects, 
the fastest and most disturbing growth in this area is the 12- 
to 18-year-old. In some respects, we think that's because it's 
so penetrated at universities, it's leveled out. There is no 
more growth. It's just prevalent.
    But they're doing it from home, not from their schools. 
They're doing it because mom or dad has bought broadband 
access, or they've convinced them to buy it. And so, we have 
done some--had some conversations at the high school level. And 
we did a program with Scholastic on this.
    But really, it's an education that has to be done more 
directly with parents. Parents have to feel that they are, in 
providing the service at their home, doing--putting their kids 
in legal jeopardy if they're not educating their own kids.
    And that's why we've focused our efforts really more at the 
adults on the legality side and the kids on telling them what 
the artists and the musicians think about it.
    Ms. Hart. The universities both, I think, have stated that 
you do educate the students as to what is proper and correct 
and legal usage. Have you had any cooperation with schools 
like, you know, K-12--I guess, not K--but you know, the older 
kids through senior year at all in cooperation with maybe the 
high schools in your communities about this? Or is it something 
that you just do as a responsibility within your own 
universities?
    Ms. Render. I think that our focus has definitely been with 
the incoming freshmen, starting with the incoming freshmen and 
the students throughout their career at the university. I 
think, however, though our communications, particularly with 
the K-12 community and the fact that it's becoming increasingly 
common for a sharing of education network provisioning between 
K-12 and the university community, that it's a topic that's 
being discussed more so with the administrators and technical 
folk rather than focus on the public relations piece.
    Ms. Hart. Okay. Thank you. Same at Penn State?
    Mr. Spanier. Yes, we really start the process the day they 
arrive for freshman orientation, even before they're students. 
But after they've enrolled in the university, when they apply 
for their computer account, they have to go through an 
educational program and agree to certain things before we'll 
give them an e-mail address and let them onto the network.
    Ms. Hart. Are they told that there are any consequences for 
violating----
    Mr. Spanier. Oh, yes. Yes. And by the way, that is--we have 
a whole program of education that continues. We have posters. 
We take out advertising. It's fairly extensive. Our efforts to 
reach the students and to try to get them to understand what's 
involved here are very extensive.
    But you know, it's a little bit like cheating in the 
classroom. I think any of you who have taught would understand 
this. When we give--our students basically have been brought up 
with the right values. They understand--they do understand 
right from wrong when they come to college. And we have told 
them, even if they didn't know it already, that it's wrong to 
be doing what they're doing. And they know it's wrong to cheat 
in the classroom.
    Most of our students want proctors at the exams so there 
will be no cheating, and there will be an even playing field. 
And they will then follow the rules. But a lot of students will 
cheat if they are in a classroom and nobody cares whether 
they're cheating. And I think we have a little bit of that kind 
of phenomenon here. It is something that they can get away 
with, and therefore they do.
    And as Hilary and others have said, it's very hard to 
compete with free. So people are doing it around them, and they 
have come to convince themselves that it's okay to do this. 
We're telling them it's not. But I think that's one of the 
reasons why we're so intent on looking at the possibility of 
even more significant technical solutions.
    Because if we can find a way to prevent it from happening 
without violating some of the other values that are very 
important to us in the higher education community, then it's 
something that many of us would be willing to try, and the 
students would, of course, just have to accept that.
    Ms. Hart. Well, I would thank you for that. I know my time 
is up. But I would really counsel you both, especially from the 
university community, that as we move forward on this issue, 
it's only going to get more difficult. And as long as students 
believe that it's okay to do it, as long as they get away with 
it, that's the message we're sending, and that's the message 
the university administration is sending. That's the message 
that society is sending.
    And sure, they may know the difference between right and 
wrong. But, gee, it doesn't really matter if it's wrong and 
nobody says anything and nobody does anything about it.
    So I would hope that we'll continue to work to find a way 
to actually eliminate it, prevent the opportunity. But I think, 
in the meantime, there is nothing wrong with making some 
examples of some students in the process.
    Thank you, Mr. Chairman.
    Mr. Smith. Okay. Thank you, Ms. Hart.
    The gentleman from Michigan, Mr. Conyers, the Ranking 
Member of the full Committee, is recognized for his questions.
    Mr. Conyers. Well, thank you very much, Mr. Chairman. But 
I'd like to yield to the freshest Member on our side, Mr. 
Weiner of New York. I mean, the new man on the Subcommittee. 
[Laughter.]
    Mr. Weiner. Thank you, sir.
    Can I ask the panel just a little bit about the 
technological solutions to this technological infringement? And 
one of the things I'd like to ask you, Dr. Hale, is that the 
concern that you expressed in your testimony about interdiction 
as a countermeasure was that it would have the undesirable side 
effect, in your words, of blocking all download requests, even 
those that do not constitute a copyright violation.
    But that seems to be a small price to pay. I mean, frankly, 
you're operating in a counterterrorist kind of mode that 
sometimes you've got to get the person that does it. Is that 
the only problem, because it seems like interdiction seems like 
the most promising of the ways to do this?
    Mr. Hale. No, that's not the only problem. And I will admit 
that it is a small problem. I mean, if somebody is pushing 
drugs and they're also selling popcorn, it makes sense to shut 
down the entire store until they--until you figure it out.
    But there is a legitimate concern over unintended effects 
of flooding a download request queue. It could cause more 
serious harm to the system, the entire system that the would-be 
infringer is running, and maybe also the network----
    Mr. Weiner. The would-be infringer, meaning the person 
requesting the download?
    Mr. Hale. No. The person that has the material to be 
downloaded.
    Mr. Weiner. Okay. I'm not persuaded that's a huge problem. 
But what's next?
    Mr. Hale. But also potentially the ISP that that infringer 
is using. All right? So, you know, maybe there are thousands of 
people using an ISP, and the infringer is one of them. If you 
do this poorly, then the potential impact could spread beyond 
that and affect other people. Now, that's if you do it poorly.
    So there may be ways to do it safely, but we don't--there 
hasn't been a lot of research done on really measuring that, 
and that's what needs to be done, because it is a promising 
approach.
    Mr. Weiner. Is there, and I'm not sure if it was Ms. Rosen 
and--is it mister or doctor?
    Mr. Spanier. Either works. [Laughter.]
    Mr. Weiner. Well, I don't want to--we're very sensitive 
about----
    Mr. Spanier. It's doctor. Yes.
    Mr. Weiner. Dr. Spanier might have mentioned it.
    Is there a way to--are there unique things about music 
files and movie files that allow you to, from the outside 
without actually going into the file, kind of scan it as it 
goes by, pick up identifiers, and say this is a de facto--I 
mean, close enough. You know what I mean?
    Frankly, a 40-page research paper, I imagine, looks 
differently to a computer scientist than a 2-hour movie.
    Mr. Hale. Yes, you can detect the signature of different 
types of media and determine, you know, without little--with 
little difficulty, say, well, this is an MP3. Now, you may 
not--it may take further inspection to conclude it's a 
copyrighted work, but you can conclude it's an MP3.
    And so, that's certainly, you know, within the realm of 
possibility.
    Mr. Weiner. And is that promising? It seems to then deal 
with the concerns that some of the academics have about not 
infringing traffic that shouldn't be infringed.
    Mr. Hale. It's promising in the short term, but you have to 
understand the end-game of this entire thing is going to be 
that it's a big game of cat-and-mouse for the P2P developers. 
Once this sort of intelligent blocking becomes prominent or 
prevalent, then they'll begin to encrypt communications. Once 
they do that, it's----
    Mr. Weiner. Yes. But you know, there is a line in the movie 
``The Untouchables,'' and I'm sure someone's studio is 
represented here, where Sean Connery says, you know, ``They put 
one of yours in the hospital. You put one of theirs in the 
morgue. They come at you with a knife. You come at them with a 
gun.''
    I mean, on some level--I think we're on some level 
pussyfooting around this problem a little bit because of our 
concern. I mean, there is--you know, we could fill this room 
with all the file-sharing. Maybe one little corner is what's 
going on legitimately.
    And until we start to kind of do some things to make it 
clear to the person who's doing the illegal activity that there 
is some cost, right now, we've really--I mean, not we--you all 
have, I think, been relatively timid in their approach.
    And I don't agree with some of my colleagues that say, you 
know, lock up a bunch of kids who are downloading Sum 41 songs. 
But even though if you downloaded--Simon and Garfunkel fans, I 
think you might get some attention.
    But the--I mean, I think that on some level, we in Congress 
and particularly--I should only speak for myself--want to see 
some serious action to deal with the problem yourselves before 
we start tiptoeing up to the line and figuring out what to do.
    And if there are concerns that you have about violating the 
law, then maybe we can come and tweak things to make it 
possible. But I think, you know, we've been just convening a 
lot of roundtables and doing a lot of things that I think--you 
know, I think if some kid had his computer go up in flames 
because he's downloading a song, the message would get around 
the Penn State campus pretty quick that that's a bad idea. 
[Laughter.]
    Mr. Hale. I don't know that--I don't know that there's 
any--I don't know that there's any flame-enabling technology 
out there. But---- [Laughter.]
    Mr. Weiner. No. But there's a guy at Farrell's Bar in 
Windsor Terrace who will break his kneecaps if he does. I'm not 
sure we should do that. [Laughter.]
    Mr. Hale. Let me respond. I would like to respond by saying 
I don't think there is anything timid about what, in 
particular, the Center for Information Security is doing, the 
approaches we're pursuing.
    But you have to understand the thing about encryption is 
that once those communications are encrypted, we can't tell 
where they're coming from. It could be somebody buying 
something off of Amazon.com. We wouldn't know.
    So blocking becomes, at the network level, more 
challenging. So what you have to do is actually participate in 
the peer-to-peer network to achieve a technological solution, 
all right? And that's--those are the kinds of things that we're 
trying to do because we see the end-game is going to be 
encryption. There's nothing you can do.
    Mr. Weiner. And as I yield back, I would say, you know, we 
here, on the campus here, have firewalls set up. We exchange 
enormous amounts of information, a lot of research. We even get 
things right sometimes, and I don't think having those 
firewalls has brought our work here to a screeching halt. And 
so----
    Mr. Berman. Would the gentleman yield?
    Mr. Weiner. Well, I'm out of time.
    Mr. Hale. If I may respond to that? Firewalls--in the end, 
firewalls won't work. They just won't work.
    Mr. Smith. Thank you, Mr. Weiner.
    The gentleman from California, Mr. Berman, is recognized. 
You had a follow-up?
    Mr. Berman. I'll wait.
    Mr. Smith. Okay. The gentleman from Virginia, Mr. Forbes, 
is recognized for his questions.
    Mr. Forbes. Thank you, Mr. Chairman. And I, too, want to 
echo what everybody said in giving you our appreciation for 
your being here and to tell you that we honestly do respect 
your opinions, and that's why you're here.
    And I only have 5 minutes. So I'm going to try to be as 
concise as I can be and ask you three questions. And if you 
can't answer them now, if you'll just get back with us and give 
us the answer so we can get them in the record.
    The first one is, and I know you don't have specificity on 
this, but how much do you estimate all of this costs, with as 
close a parameters as you can get? So we have some feel for 
just the dollars and cents of what this piracy is costing us.
    And the second one, Ms. Rosen, is for you. Are there any 
universities out there that are doing everything you think they 
should do? And if so, can you give us a list of those 
universities and what their model might be?
    And then the third question that I have is, up here, we 
function kind of like a funnel, and it's an interesting funnel 
because at the top of the funnel we talk an awful lot about the 
problem. And we'll have hearing after hearing after hearing 
where everybody comes in and talks about the problem. And 
you've heard from most of the Members of this Subcommittee they 
understand there's a problem.
    And then you move down to the next level of the funnel, and 
everybody talks about the parameters. We're concerned about 
this, but we want to avoid this.
    And every great while, we will move down to the bottom of 
the funnel, where we actually do something. And at that 
particular point in time, that's what I'm interested in your 
opinions on. And if you could, and I know you don't have all of 
the information. We never have all of the information. But I'd 
like to hear from each one of you, if you could get back to us, 
what specifically would you like for this Subcommittee to do 
and, equally important, what would you like for us to avoid 
doing?
    And I commend you, unlike some of my colleagues, for not 
going out and arresting every kid, you know, that's on campus 
or making huge examples. I know that's a tough problem. You 
don't want to put all of them in jail. But we really would like 
to hear with some specificity what would you like us to do and 
what would you like for us to avoid doing?
    And if you want to respond to any of those in a limited 
amount of time, that's fine. If not, if you could just get back 
to us, that would be great.
    Ms. Rosen. Well, as a matter of costs, I think there are 
multiple costs for the music industry and for the intellectual 
property industries. I think overall you're talking about, you 
know, hundreds and hundreds of millions of dollars, jobs, lack 
of new artists, all sorts of financial consequences that filter 
down into making less music available for consumers.
    Obviously, universities have bandwidth costs and other 
institutional costs, and I'll leave it to them to try and 
quantify those.
    In terms of what you ought to do, as has been said before, 
the law is quite good in this area, thanks to a lot of work 
from a lot of people in this room and on this dais. And so, 
what we are trying to do is get cooperation on enforcing the 
law and on deterrence. And where we can't, find creative ways 
to have the law enforced ourselves in a civil manner.
    So, you know, what you have jurisdiction over in terms of 
resources is Federal jurisdiction, for Federal resources in a 
criminal area. You have--but in the civil area, I think there's 
not much more you can do right now to make the law better. It's 
pretty clear what's being done is illegal.
    Mr. Forbes. So you're comfortable with the state of the 
law, at least, right now? It's just the enforcement part of it?
    Ms. Rosen. I'm comfortable with the state of the law and 
discomforted about the level of enforcement all around.
    Mr. Berman had a creative idea last year, which I was 
supportive of finding a good way to pursue. And unfortunately, 
got so caught up in rhetoric and a disinformation campaign that 
it makes thinking about responsible solutions extremely 
difficult because of some people's self-interest in avoiding 
solutions.
    So to get more creative, I think, is a big hurdle.
    Mr. Spanier. Universities have costs on both sides of the 
issue. The additional bandwidth that we have to provide for 
this illegal activity that's going on and to solve the problems 
when bad stuff comes in along with music, and our computers are 
invaded, and we have to go back and fix that.
    On the other side, on solving the problem, to deal with all 
the cases that come to our attention where students are doing 
something wrong, to go in and remedy those, the enforcement 
process and these technical solutions require staff time and 
programming. So we see the costs on both sides.
    But I do want to say we're very sympathetic with the very 
substantial costs that apparently exist on the side of the 
entertainment industry.
    In terms of the end-game, what are we trying to see at the 
end of that funnel, I just want to take the opportunity to 
reiterate that we in the university community understand this 
problem. We are sympathetic with it, and we want to see a stop 
to it.
    This may be perceived as something adversarial. We do not, 
in any way, see illegally--the illegal pirating of copyrighted 
material by university students, in any way, to be in the best 
interests of the university. We would like to put an end to it.
    But the bottom line for us is how do we get that done with 
technical solutions that don't violate some of the most basic 
principles by which universities have always operated--freedom 
of speech, freedom of expression, concerns about privacy.
    Whether there's a technical solution out there that can 
deal with this at some gross level without us having to go into 
a faculty member's or a student's computer, without having to 
literally scan the content of incoming material that they think 
they're transmitting privately between colleagues.
    If there is a good solution out there that preserves these 
principles that are so fundamental to higher education, I think 
we would want to take a very serious look at it, and many 
universities would adopt it. But there are certain lines we're 
trying to be very careful not to cross here. We're trying to be 
very sensitive to that.
    Mr. Forbes. My time is up. And thank you all for your help.
    Mr. Smith. Thank you, Mr. Forbes.
    We welcome another gentleman from Virginia, Mr. Goodlatte, 
and he is recognized for his questions.
    Mr. Goodlatte. Thank you, Mr. Chairman. I want to commend 
you for holding this hearing on a very important issue. It's 
important to me not only because I have a strong interest in 
copyright protection, but also because I have more colleges and 
universities, 22 of them, in my congressional district than any 
other district in the country. And so, I'm well aware of the 
nature of this problem.
    I do have an opening statement that I'd ask be made a part 
of the record. And I also want to join in the chorus of 
congratulations and thanks to Hilary Rosen. As a good 
Republican, I never thought that I would say about any Democrat 
named Hilary that ``Hilary rocks.'' [Laughter.]
    But that, indeed, is the case here because your work to 
protect copyright transcends your representation of the 
Recording Industry Association of America. It is something that 
is very, very important to the long history we have in this 
country of building respect for the creation and protection of 
intellectual property, and it transcends this issue of peer-to-
peer networking as well.
    So we thank you for your good work, and we know that in 
your future works, you'll continue to have some involvement 
with that in some way, I hope.
    Let me ask our college representatives something that is of 
interest to me. Many of the institutions in my district and 
many around the country have honor codes. And I wonder if any 
of you have considered whether or not unauthorized file-
sharing, which is not only illegal and is certainly a form of 
theft, whether your institutions consider the theft of 
intellectual property a violation of your school's moral code 
of conduct?
    And if so, are students informed about the seriousness of 
unauthorized file-sharing under such a code of conduct?
    Ms. Render. I'll respond to that, and the answer is yes to 
that question relative to institutions within the University of 
North Carolina.
    Most of these processes go through the honor system and an 
honor court from the student standpoint. This type of violation 
is included in that definition, and they are very seriously 
revisiting, frankly, various aspects of the honor code, not 
just for this particular type of infringement, but others that 
are surfacing on our campuses.
    And I'd just like to comment that I think everyone is 
aware, but emphasize the fact of the iterative nature of this 
issue. The technology is evolving sometimes faster than we can 
respond to the processes within our universities. Sometimes 
they're somewhat painful and deliberate. But there are very 
good reasons why we have shared governance and inclusion in 
those processes to ensure that the university community is very 
well represented.
    So I want to emphasize that the serious nature of the issue 
at hand, I think, is well recognized throughout the university 
community. We need to, I believe, be given some time for the 
joint work of the two communities to bear some fruit and some 
results and given the opportunity as a diverse group of 
campuses to react to that.
    I think scale is another issue that's on both sides. We 
have very large institutions and very, very small ones. And 
what it will require will be different for each.
    Mr. Goodlatte. Let me ask you about another aspect of this. 
One of the more disturbing trends about this has been that 
students are beginning to develop internal local area networks 
within universities for file-swapping that does not reach 
beyond the university's network. And these types of networks do 
not deplete the university's bandwidth. So that problem that 
has gotten the attention of some universities is not here and--
because they're not using the Internet as a viaduct.
    Instead, files are swapped from one computer in the 
university's network to others within the same network. I 
believe these local network file-swappings are also illegal, 
just as illegal as they may be trading over the Internet. And I 
wonder if any of our university representatives have any 
thoughts on that issue and whether you've attempted to address 
that issue in your--in your work?
    Mr. Hale. I guess I would like to say that, yes, that's a 
trend that we've seen, and it's a growing trend and a 
disturbing one. And it's not necessarily the case that it 
wouldn't--it would not impact network performance in a 
university network. It depends upon the architecture of that 
university's network.
    There are--there are things that can be done, and the same 
types of countermeasures can work. But it's a problem that's a 
little more difficult to detect and deal with.
    Mr. Goodlatte. Thank you. And Ms. Rosen, if I might ask, in 
relation to the educational efforts that your industry is 
undertaking, is there any thought to a massive public 
relations-type of campaign, coupled--I noted recently that 
America Online, TimeWarner have just launched a new fee 
service. A number of other companies have that as well. And 
that is excellent.
    But in order to beat free, there seems to me to be a very 
strong need for some kind of a general public relations 
campaign about the effect of peer-to-peer file-swapping on the 
possible--the principle of file-swapping and the principle of 
copyright protection.
    And I'm just wondering what your industry is doing and what 
the copyright community at large is doing to have some kind of 
a massive public relations campaign, to spend tens of millions 
of dollars in a concentrated effort over a few months' period 
of time to try to change public attitudes about this?
    Ms. Rosen. You will see tens of millions of dollars spent 
over the next several months promoting the legitimate services 
so that consumers will understand that----
    Mr. Goodlatte. But what about the other side of it? That 
there is----
    Ms. Rosen. On the other side, there has been a public 
relations campaign which we actually unveiled last fall at this 
Committee, which received, you know, significant air time on 
MTV and VH1 and BET, and Clear Channel put it on multiple radio 
stations around the country.
    And we found that that education has had an impact, but 
there is only so much that education is going to do. There's 
going to have to be some broader sense, we think, of 
consequences or significant impact. But I think we'll continue 
that campaign and, importantly, the legitimate services will go 
out there.
    And I have to say just on the state of the law for 1 
second--and this is relevant because it follows up on what Mr. 
Forbes said. If we lose this pending Verizon case, which I 
don't think we will--and most of you know about it--I may come 
back and say the law isn't correct. [Laughter.]
    So I have to reserve my option to do that.
    Mr. Smith. Thank you.
    Mr. Goodlatte. Mr. Chairman, I wonder if I might submit one 
more question for the record?
    Mr. Smith. Sure.
    Mr. Goodlatte. It's directed to Professor Hale, and if he 
could submit it in writing, he could perhaps respond in 
writing.
    [The prepared statement of Mr. Goodlatte follows:]
Prepared Statement of the Honorable Bob Goodlatte, a Representative in 
                  Congress From the State of Virginia
    Mr. Chairman, thank you for holding this important oversight 
hearing on peer-to-peer piracy on our universities' campuses.
    Article I Section 8 of our Constitution lays the framework for our 
nation's copyright and patent laws. It grants Congress the power to 
award inventors and creators, for limited amounts of time, exclusive 
rights to their inventions and works. The founding fathers realized 
that this type of incentive was crucial to ensure that America would 
become the world's leader in innovation and creativity. This truth is 
still applicable today. As we continue our journey into the digital 
age, we must be sure to continue to reward our innovators with the 
exclusive rights to their works for limited periods of time. This 
incentive is still necessary to maintain America's position as the 
world leader in innovation.
    However, the proliferation of copyright piracy in America is 
growing and is threatening to undermine the very copyright protections 
our founding fathers envisioned. Particularly disturbing is the growth 
of piracy on America's university campuses. A recent CNN/USA TODAY/
Gallup Poll found that 39% of college students with Internet access 
admitted to having downloaded music that they did not pay for. A recent 
study of the FASTTRACK P2P system showed that 16% of the files 
available at any given moment on the FASTTRACK network were located at 
IP addresses managed by U.S. educational institutions. Furthermore, 26% 
of the supernodes on the FASTTRACK network were being run from 
addresses assigned to universities.
    In addition, last year a medium-sized U.S. state university used a 
prototype network traffic-monitoring tool to provide a snapshot of 
network usage on its campus. It monitored the activity of 54 users of 
only one P2P network, the Gnutella network, during the university's 
summer break. The results of the research showed that 89% of the files 
transferred to and from the university network were infringing. 
Furthermore, those 54 monitored users uploaded 4,614 files. In 
addition, more than 75% of the transferred data was from university 
users to individuals located outside of the university network, which 
shows that there is a growing trend toward outside pirates using 
university resources to download files.
    These statistics are nothing short of staggering and show that the 
problem of piracy on America's university campuses cannot be ignored. 
Universities should be concerned about copyright piracy for many 
reasons. I would like to highlight two of these reasons.
    First of all, file sharing is theft. When a student downloads a 
song without paying for the song, that student is stealing. One of the 
greatest characteristics of our nation's universities is their 
commitment to honesty and honorable behavior. Most universities demand 
that students follow strict honor codes that prohibit such activities 
as lying, cheating and stealing. However, when a university adopts a 
passive stance on copyright piracy, it sends a mixed message that blurs 
the moral imperatives it seeks to foster through its honor code.
    Secondly, file sharing poses serious security threats to 
universities' network resources. The simple fact is that P2P networks 
connect universities' computers to networks that may never have been 
checked for viruses, worms or other destructive computer codes. This 
leaves universities wide open to attack. Also, P2P developers often 
create applications within their software that records users' web 
browsing behaviors. P2P developers then sell this information to make 
additional profits. In addition to potential privacy concerns, these 
tracking applications can be attractive targets for hackers and 
trespassers looking for weaknesses in universities' networks.
    Illegal file swapping is a serious problem for universities. 
Clearly, industry leaders and university officials must coordinate 
their efforts to eliminate this illegal activity. I am encouraged by 
the cooperation exhibited by the parties here today and believe that 
their efforts to work together to solve these problems are commendable. 
Through education and the development of best practices and competitive 
technologies, content providers and educational institutions can show 
the world that private parties can work together to solve these complex 
piracy issues without heavy-handed government regulation.
    I look forward to hearing from the expert witnesses today regarding 
the progress the groups are making. I also look forward to receiving 
the forthcoming reports from the Joint Committee in a timely fashion, 
and I expect to see documented progress resulting from this 
cooperation.
    Thank you for taking the time to come and talk about your efforts 
to end copyright piracy on America's university campuses.

    Mr. Smith. Absolutely. And that's a good reminder. Any 
Member is welcome, if it's all right with the witnesses, to 
submit questions. Now, before we adjourn, Mr. Berman has a 
follow-up question.
    Mr. Conyers. Well, Mr. Chairman, would you forget the 
Ranking Member or what?
    Mr. Smith. Mr. Conyers, you yielded your time to Mr. 
Weiner. I'll be happy to recognize Mr. Weiner for his time, and 
he can yield it back to you, if you'd like.
    Mr. Conyers. Oh. So that's the kind of Committee we're 
going to have---- [Laughter.]
    Mr. Smith. According to the rules.
    Mr. Conyers [continuing]. In the 108th.
    Mr. Smith. In any case, the gentleman from Michigan is 
recognized if he has some questions.
    Mr. Conyers. Oh, that's very nice of you. Ladies and 
gentlemen, and Members of the Committee, this is a tough 
problem. And without a solution, we begin to get into whether 
people from Farrell's Bar, Mr. Weiner, should be visiting the 
malefactors or whether the Berman bounty-hunter's notion, which 
I was sorry to hear Hilary raised, you're going to get some--
we're going to take care of this problem in a way you're all 
going to be very unhappy with.
    So I have a solution. Let us all gather around the table 
and with the electronics industry and with the content 
industry, let's begin to fashion a solution that we can all 
live with. Or you'll probably all get a solution that you'll 
all be very unhappy with.
    Can we agree on that? Not yet.
    Mr. Spanier. I think that summarizes quite well why this 
Committee exists that Cary Sherman and I are co-chairing to try 
to come up with solutions that we jointly prefer as opposed to 
something that is imposed on us that may not feel as 
comfortable.
    Mr. Conyers. Well, Chairman Sensenbrenner, Ranking Member 
Berman, and the gentleman from Virginia, Mr. Boucher, Mr. 
Cannon of Utah, a number of us have been meeting on this very 
same subject. Can we get this behind us in a way that before it 
gets so big, you're going to get some draconian kinds of 
results coming out of here?
    Now, I don't want to remind anybody about this because 
somebody may rush to put in a bill. But we did have mandatory 
minimums on this violation for about 5 years. Mandatory. 
Criminal. We took it off.
    But you know, the general impression that may be happening 
as a result of this hearing from our distinguished educators is 
that this is just another visit to Washington, and maybe 
nothing much is going to happen.
    Please, I can assure you that that would--you'd be leaving 
Judiciary Committee with the wrong impression. Because there 
are people ready to take action, and it will probably go over 
the line in terms of privacy concerns and the kind of things 
that we want.
    Now, true, it's a cultural problem. If how many young 
people say this is a crime, a Federal crime which you could go 
to the slammer for. And they'd say, please, everybody is doing 
it, including a lot of their parents, by the way, since we're 
in the blame thing on kids today. There are a lot of adults 
doing this same thing. So we have to see from the educational 
community a ratcheting up of concern about this.
    No, you don't have to start throwing kids out of school. 
The Naval Academy was doing it for a while for these same kinds 
of infractions that bring us here today. But we do have to make 
it clear that there is a note of urgent seriousness that has 
not really manifested itself to the rest of us looking in on 
what campuses are doing.
    So I hope we can all work together and be friends, and I 
would like anybody that wants to give me any friendly advice on 
the panel to please do so.
    Ms. Rosen. Keep at it, Mr. Conyers.
    Mr. Conyers. Well, that's easy for you to say. [Laughter.]
    We work together so much. But thank you all very much. 
Thank you, Mr. Chairman.
    Mr. Smith. Thank you, Mr. Conyers. The gentleman from 
California, Mr. Berman.
    Mr. Berman. Just a couple of observations. One is to sort 
of reaffirm, as if it were necessary, what Mr. Conyers has 
said. It is great you're working closely with some of the 
copyright industries to try and find ways to deal with this 
problem, but don't let the existence of a process be the 
answer. The process has to get into concrete steps and deal 
with the problem, and--and it's important to do it sooner 
rather than later.
    The second observation is to Dr. Hale's comment about 
encryption. The fact is, yes, encryption can get around the 
different kinds of blocking efforts. But the encryption also 
makes the system less usable, less--more difficult for 
potential downloaders to know what they're downloading. It 
makes it more complicated.
    Things which create--which make things more difficult 
provide a useful service because they block the frequency and 
the amount of the infringing activity. And so, in and of 
itself, the fact that there are countermeasures that can be 
taken, but which make it more difficult to utilize the peer-to-
peer system are not necessarily such a bad consequence.
    Thirdly, I just want to make that point on the fair use to 
Dr. Spanier. You can--if your university class in music wants 
you to have the fair use advantage of comparing different kinds 
of music and songs, there are so many different ways of setting 
up a network for that class, for that school, with respect to 
these items where you can use a network, but it's not a 
publicly accessible network that anybody with that software in 
their computer anywhere in the world can get a hold of.
    Because putting it onto that kind of a network that any 
computer that had the software can get a hold of it is not a 
fair use. And so, I don't think that notion of the theoretical 
fair use should block things from happening. There are so many 
alternatives.
    And finally, to Ms. Render, I'd just ask you to revisit the 
University of North Carolina's network acceptable use policy. 
Nowhere in that policy, you talk about bandwidth problems and 
are very specific about certain things you don't want to go on 
in that network, but you never talk about copyright 
infringement and that those trades are copyright infringement.
    And I'd suggest getting the specificity of that notion into 
the--into the policy and into the primer that all students who 
are a part of your network have to get would be useful and 
specific kind of a statement by the university that that's 
wrong and should be related directly to infringement.
    Mr. Smith. Thank you, Mr. Berman.
    Mr. Berman. It's been a good hearing.
    Mr. Smith. Let me make an observation as well, and that is 
today, as a result of the testimony that we've heard, I've come 
to kind of a surprising conclusion. And that is that what's 
been done so far in the way of education and enforcement--and I 
emphasize so far--really hasn't worked that well.
    There hasn't been an appreciable reduction in piracy, and 
certainly nothing quantifiable that we can point to. And that 
may well mean that additional steps need to be taken in a 
number of areas. And so, at least that's one of the conclusions 
that I've come to as a result of your very, very interesting 
and worthwhile testimony.
    So we thank all of the witnesses for being here today. I 
thank the Members for their presence as well, and we stand 
adjourned. Thank you.
    [The speech of Mr. Valenti follows:]
                   Prepared Statement of Jack Valenti

                     ``. . . Man is the only animal

                       who both laughs and weeps,

                     because Man is the only animal

                     who understands the difference

                       between the way things are

                     and the way they ought to be''

                            Some comments on

                          the Moral Imperative

                               offered by

                    JACK VALENTI, President and CEO

                 Motion Picture Association of America

                                   at

                            Duke University

                         Durham, North Carolina

                           February 24, 2003

    No free, democratic nation can lay claim to greatness unless it has 
constructed a platform from which springs a moral compact that guides 
the daily conduct of the society and inspires the society to believe in 
civic trust. That ``moral imperative'' connects to every family, to 
every business, every university, every profession and to government as 
well. It is defined by what William Faulkner called ``the old 
verities,'' the words that define what this free and loving land is all 
about. Words like duty, service, honor, integrity, pity, pride, 
compassion, sacrifice.
    If you treat these words casually, if you find them un-cool, if you 
regard them as mere playthings which only the rabble and the rubes, the 
unlearned and the unsophisticated, observe and honor, then we will all 
bear witness to the slow undoing of the great secret of America.
    Newspapers have been full of sordid stories of unbounded avarice by 
some corporate executives, whose acts soiled the moral compact. But 
their dishonesty did not indict the free market system. The system 
works. What was so contemptibly wrong was the breakage of civic trust 
by some within the system who knew they were cheating and stealing from 
employees and stockholder, but because it was easy to do, because they 
had the power to do it, they did it.
    It was a cynical, coarse defiance of the moral imperative. But the 
exposure of this fiscal perfidy made most of us think hard and long 
about the lack of any moral reference within those corporate 
malefactors.
    Most Americans with very little don't resent those who have a lot 
more. Most Americans believe if they work hard, educate themselves and 
play by the rules, they will by their own effort rise to higher places 
and have more tomorrow than they have today. That is the sanity and the 
beauty of the American dream.
    But the belief by the average citizen in the American moral compact 
is demolished by the brute reality that some who have more got theirs 
through treachery and trickery, which so cruelly mocked all those 
``fools'' who trusted them.
    There is no larger objective in this country than the reassembling 
of civic trust, the reaffirmation of honorable conduct by the most 
powerful among us; in short, holding fast to the sustenance of civic 
trust. How then does the university insert within the young ``the old 
verities'' so that students not only understand and believe in the 
compact but also live it in their daily moral grind? That's the grand 
question as we enter the new digital world. It's a question that every 
guardian of the university's purpose must answer.
    Someone once said that all movement is not necessarily forward nor 
is all change necessarily progress. So it is that the digital world is 
not necessarily a better world, but it is surely a different one. The 
divide between the digital world and the analog world is a vast chasm. 
To put it another way, in Mark Twain's words, the difference between 
digital and analog is the difference ``between lightning and the 
lightning bug.'' The digital Internet has the potential to become the 
greatest communications delivery system ever known on this planet. It 
has the promise of allowing people to find new ways to do new things, 
and do them with dazzling speed.
    The nation's universities, including Duke, are equipped with large 
pipe, high velocity broadband state-of-the-art computer networks. None 
better, none faster. They produce vast benefits to the university, 
allowing instant delivery of information and knowledge for professors 
and research experts within the academy. They are also accessible to 
students who are privy to not only this avalanche of data--but also to 
movies. This is an Open Sesame opportunity for some students to take 
creative property that does not belong to them with effortless ease and 
speed. And because they have the power to do it, many, but not all of 
them, do it.
    That is why today I choose to chat with you about the interlacing 
of the moral compact, digital technology--and American movies--and to 
introduce you to a view of the collision of values brought on by the 
migratory magic of digital ones and zeros.
    One value says, ``Digital technology gives me power to roam the 
Internet, therefore whatever is available, I can take, no matter who 
owns it.'' The other value says, ``The fact that digital technology 
gives me power to use, doesn't make it right for me to use it 
wrongly.'' That is where the collision of values takes place.
    So it is we confront a contradiction that puts to hazard the moral 
compact that guides the nation. How does the society deal with it? 
Importantly, how does the university react to this challenge to civic 
trust flung down by the best and the brightest?
    Viant, a Boston-based research film, estimates that between 400,000 
to 600,000 movies are being illegally downloaded EVERY DAY! Sad to 
report, a large chunk of that Internet abuse occurs on college campuses 
by students who are hourly visitors to the digital realms of KaaZa, 
Morpheus, Grockster, Gnutella, etc, so-called ``file-swapping'' sites 
and fill their hard drives with new movies, free of charge.
    But there is a larger, darker issue here. Students would never 
enter a Blockbuster store and with furtive glance stuff a DVD inside 
their jacket and walk out without paying. They know that's shoplifting, 
they know that's stealing. They know they can find themselves in big-
ass trouble if they're caught. That's why they don't do it. Then why 
would those same young leaders-to-be walk off the Internet with a movie 
inside their digital jacket? Why? Is it because digital shoplifting is 
at this moment a ``no risk'' activity? If that is so, why is it so? Is 
it because Ambrose Bierce's definition of Conscience as ``Something you 
refer to when you are about to get caught'' is an unwanted truth? Are 
the words ``ethics''--``morality''--``principle''--alien words, exiled 
from the student lexicon? It's a sizeable question.
    There are some critics who say, ``Come on, movie industry, get with 
it. Stop your whining and get a new business model.''
    Fine, except no business model ever struck off by the hand and 
brain of Man can compete with ``Free.'' And if critics don't understand 
that, it's because they just love the status quo. When a new multi-
million dollar film, just released, is suddenly on the Net being 
abducted by millions of visitors to file-swapping sites, then that, 
dear friends, is ``the status quo.'' Not a congenial status. Not a 
pleasant quo.
    About two years ago, when Napster was in full blossom, I spoke to 
some 200 students, the finest of the breed, at one of the most 
prestigious universities in the land. My subject was ``The Changing 
American Presidency.'' In my opening remarks, I said, ``Before we talk 
about the White House, I have a question. Music is not my turf. Movies 
are. But I wonder how many of you have bought a CD in the last several 
months?'' Some three or four hands were upraised. ``Alright, now many 
of you have been on Napster the last several months?'' Every hand shot 
up.
    I fixed my gaze on a young man who I was told was going to graduate 
near the top of his class. ``You are,'' I said, ``about to graduate 
from one of the best schools in the world. You are now an educated, 
civilized human being, those best fitted to meet life's changes and 
challenges with versatility and grace. Now, tell me, how do you square 
that with the fact you're stealing?''
    He was crestfallen at first. Then his face brightened and he said, 
``Well, maybe it is a kind of stealing, but everyone else is doing it 
and besides music costs too much.'' I smiled as I thought to myself, 
``for this version of a moral value, parents are paying a small fortune 
in tuition.''
    Making choices is a daily experience for Americans. Making the 
right choice emerges from a process that is rooted in instinct and 
intuition which leap from unshakable values. When you come to a fork in 
the road, which way do you go? If choices chosen by young people early 
in their learning environment are infected with a moral decay, how then 
can they ever develop the judgment to take the right fork in the road? 
How will you, when many of you are in leadership roles in the future, 
deal with younger employees who have learned as students that if you 
have the power to take what doesn't belong to them, you do it? As the 
leader of the enterprise, how will you come to grips with that? You'll 
be face-to-face with the breakage of the moral compact and, guess what; 
it's on your dime.
    That's why the university cannot stand aloof from this progression 
since administrators and professors set the final design before its 
graduates, in the words of that old cliche--go on to ``face life.'' I 
am pleased to report the movie industry is now meeting with a committee 
representing the nation's colleges and universities. The objective of 
these meetings is to urge the construction of a Code of Conduct for 
students when they use the university broadband system, a Code of 
Conduct solely within the confines and the authority of the university. 
Those discussions are going well. The university representatives have a 
clear vision of this issue. Many of them have developed or in the 
process of creating a Code of Conduct.
    While digital technology is a hyper-modern phenomenon, its 
molecular connection to the moral rostrum has an ancient ancestry. Many 
years ago, the British philosopher, William Hazlitt, wrote: ``Man is 
the only animal who both laughs and weeps for he is the only animal who 
understands the difference between the way things are and the way they 
ought to be.''
    The digital world has the capacity to unlock knowledge hidden 
behind doors previously only partially open, and mostly closed to all 
but a few. What is yet to be put in place is a clear understanding of 
how to conduct yourself when you have digital power available to you 
that you will not use because it causes injury to others. William 
Hazlitt summed up that choice for us better than anyone else.

    [The Electronic Privacy Information Center letter follows:]



    
    
    
    [Whereupon, at 12 p.m., the Subcommittee was adjourned.]






                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

Prepared Statement of the Honorable John Conyers, Jr., a Representative 
                 in Congress From the State of Michigan
    One middle-ground approach to stopping piracy seems to be working: 
for the industries to negotiate privately and then for the government 
to mandate the agreement so that it can be enforced. This already has 
happened with the broadcast flag issue, which revolved around how to 
make sure that DVD players and computers would recognize and obey the 
rights management on broadcast digital TV signals. The parties agreed 
on how to approach this and the FCC is working on a rule to mandate the 
agreement.
    These negotiations must continue and resolve these peer-to-peer 
issues. Copyright piracy is one of the most serious economic problems 
facing this Committee. As the whole world knows by now, we have 
absolutely rampant piracy over the Internet. Consumers have grown 
accustomed to free music on the Web; movies and video games are not far 
behind.
    In the meantime, I believe that one potential solution is for an 
institution not to monitor student activity on the Internet, but to 
warn students when a third-party, typically the recording industry, 
notifies the university of an alleged transgression. The student is 
then asked to remove the offending conduct and to stop the file-
sharing.
    I think that it is critical that higher education institutions set 
forth policies that foster open-mindedness and critical inquiry. I also 
believe that network monitoring has the potential to stifle the 
creativity and academic freedom among students that must thrive in 
educational settings.
    There is no doubt in my mind we are at a crossroads in the content 
business. The decisions we make this year in Congress, the state 
legislatures, and the courts will have an impact on the future of the 
content industry, and whether we will even have a viable content 
industry in the future.
    So it is altogether fitting that we begin the Subcommittee's agenda 
with a hearing concerning peer-to-peer networks in college communities. 
File sharing among students can provide many beneficial uses in 
education, research, and professional development. Unfortunately, many 
students on university campuses have exploited the intended use of the 
peer-to-peer network, engaging in the practice of trafficking music, 
movies, software, video games, and other copyrighted material without 
permission. Aside from raising issues of copyright infringement, this 
illegal use of the peer-to-peer network can lead to invasions of 
student privacy, viruses, and other potential security threats to the 
university's network.
    Last year, consumers swapped over 5 billion music files over peer-
to-peer networks. An astonishing 58 percent of the American population 
between the ages of 12-21 have downloaded MP3s over the Internet in the 
past two years. That amounts to hundreds of billions of dollars that 
are being stolen from creators. Clearly this degradation and 
exploitation of what should be a beneficial system will continue to 
have a deteriorating effect on our economy, not to mention our 
livelihoods as consumers in the content industry, if it is allowed to 
continue.
    The content industry is stepping up its battle against digital 
copyright piracy on college campuses, encouraging higher education 
leaders to monitor their students and impose restrictions on violators. 
Those who oppose network monitoring argue that, aside from raising 
privacy concerns, such monitoring can have a chilling effect on the use 
of the peer-to-peer technology that can otherwise have valuable 
academic rewards. The end result, they claim, would amount to an 
overall chilling effect on the marketplace of ideas.
    Monitoring can have the effect of turning university officials into 
spies for the content industry, thus creating an atmosphere in which 
the First Amendment and privacy rights of students are significantly 
devalued. Piracy, however, has proven to be a lethal threat to the 
content and technology industries and universities must take care to 
address these legitimate concerns that continue to plague the copyright 
industry.






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