[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
                  THE INTERNET AND THE COLLEGE CAMPUS:
                   HOW THE ENTERTAINMENT INDUSTRY AND
                     HIGHER EDUCATION ARE WORKING TO
                         COMBAT ILLEGAL PIRACY

=======================================================================

                                HEARING

                               before the

              SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS

                                 of the

                         COMMITTEE ON EDUCATION
                           AND THE WORKFORCE
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                           September 26, 2006

                               __________

                           Serial No. 109-58

                               __________

  Printed for the use of the Committee on Education and the Workforce



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                COMMITTEE ON EDUCATION AND THE WORKFORCE

            HOWARD P. ``BUCK'' McKEON, California, Chairman

Thomas E. Petri, Wisconsin, Vice     George Miller, California,
    Chairman                           Ranking Minority Member
Michael N. Castle, Delaware          Dale E. Kildee, Michigan
Sam Johnson, Texas                   Major R. Owens, New York
Mark E. Souder, Indiana              Donald M. Payne, New Jersey
Charlie Norwood, Georgia             Robert E. Andrews, New Jersey
Vernon J. Ehlers, Michigan           Robert C. Scott, Virginia
Judy Biggert, Illinois               Lynn C. Woolsey, California
Todd Russell Platts, Pennsylvania    Ruben Hinojosa, Texas
Patrick J. Tiberi, Ohio              Carolyn McCarthy, New York
Ric Keller, Florida                  John F. Tierney, Massachusetts
Tom Osborne, Nebraska                Ron Kind, Wisconsin
Joe Wilson, South Carolina           Dennis J. Kucinich, Ohio
Jon C. Porter, Nevada                David Wu, Oregon
John Kline, Minnesota                Rush D. Holt, New Jersey
Marilyn N. Musgrave, Colorado        Susan A. Davis, California
Bob Inglis, South Carolina           Betty McCollum, Minnesota
Cathy McMorris, Washington           Danny K. Davis, Illinois
Kenny Marchant, Texas                Raul M. Grijalva, Arizona
Tom Price, Georgia                   Chris Van Hollen, Maryland
Luis G. Fortuno, Puerto Rico         Tim Ryan, Ohio
Bobby Jindal, Louisiana              Timothy H. Bishop, New York
Charles W. Boustany, Jr., Louisiana  [Vacancy]
Virginia Foxx, North Carolina
Thelma D. Drake, Virginia
John R. ``Randy'' Kuhl, Jr., New 
    York
[Vacancy]

                       Vic Klatt, Staff Director
        Mark Zuckerman, Minority Staff Director, General Counsel
                                 ------                                

              SUBCOMMITTEE ON 21st CENTURY COMPETITIVENESS

                     RIC KELLER, Florida, Chairman

Jon C. Porter, Nevada Vice Chairman  Dale E. Kildee, Michigan
Thomas E. Petri, Wisconsin           Donald M. Payne, New Jersey
Michael N. Castle, Delaware          Carolyn McCarthy, New York
Sam Johnson, Texas                   John F. Tierney, Massachusetts
Vernon J. Ehlers, Michigan           Ron Kind, Wisconsin
Patrick J. Tiberi, Ohio              David Wu, Oregon
Tom Osborne, Nebraska                Rush D. Holt, New Jersey
Bob Inglis, South Carolina           Betty McCollum, Minnesota
Cathy McMorris, Washington           Chris Van Hollen, Maryland
Tom Price, Georgia                   Tim Ryan, Ohio
Luis G. Fortuno, Puerto Rico         Robert C. ``Bobby'' Scott, 
Charles W. Boustany, Jr., Louisiana      Virginia
Virginia Foxx, North Carolina        Susan A. Davis, California
Thelma D. Drake, Virginia            Timothy H. Bishop, New York
John R. ``Randy'' Kuhl, Jr., New     Major R. Owens, New York
    York                             George Miller, California, ex 
Howard P. ``Buck'' McKeon, ex            officio
    officio                          [Vacancy]
[Vacancy]


                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on September 26, 2006...............................     1

Statement of Members:
    Keller, Hon. Ric, Chairman, Subcommittee on 21st Century 
      Competitiveness, Committee on Education and the Workforce..     1
        Prepared statement of....................................     3
    Kildee, Hon. Dale E., Ranking Member, Subcommittee on 21st 
      Century Competitiveness, Committee on Education and the 
      Workforce..................................................     4
        Excerpt from a statement by Dr. Tony Tether, Director, 
          Defense Advanced Research Projects Agency, submitted to 
          the Committee on Science, U.S. House of 
          Representatives, May 14, 2003..........................    42

Statement of Witnesses:
    Elzy, Prof. Cheryl, dean of university libraries and Federal 
      copyright agent, Illinois State University.................    22
        Prepared statement of....................................    25
    Fisher, William W. III, Hale and Dorr professor of 
      intellectual property law, Harvard University; director, 
      Berkman Center for Internet and Society....................    32
        Prepared statement of....................................    34
    Glickman, Hon. Dan, chairman and CEO, Motion Picture 
      Association of America, former Member of Congress..........     8
        Prepared statement of....................................    10
    Kirwan, William E. ``Brit,'' chancellor, University System of 
      Maryland...................................................     5
        Prepared statement of....................................     6
    Sherman, Cary H., president, Recording Industry Association 
      of America, Inc............................................    16
        Prepared statement of....................................    18


THE INTERNET AND THE COLLEGE CAMPUS: HOW THE ENTERTAINMENT INDUSTRY AND
                    HIGHER EDUCATION ARE WORKING TO
                         COMBAT ILLEGAL PIRACY

                              ----------                              


                      Tuesday, September 26, 2006

                     U.S. House of Representatives

              Subcommittee on 21st Century Competitiveness

                Committee on Education and the Workforce

                             Washington, DC

                              ----------                              

    The subcommittee met, pursuant to call, at 11 a.m., in room 
2175, Rayburn, Hon. Ric Keller [chairman of the subcommittee] 
presiding.
    Present: Representatives Keller, Porter, McKeon, Petri, 
Inglis, Foxx, Kuhl, Kildee, Tierney, Van Hollen, Scott, and 
Davis.
    Staff present: Kathryn Bruns, Legislative Assistant; 
Jessica Gross, Press Assistant; Richard Hoar, Professional 
Staff Member; Chad Miller, Coalitions Director for Education 
Policy; Deborah L. Emerson Samantar, Committee Clerk/Intern 
Coordinator; Brad Thomas, Professional Staff Member; Toyin 
Alli, Staff Assistant; Gabriella Gomez, Legislative Associate/
Education; Lauren Gibbs, Legislative Associate/Education; Joe 
Novotny, Legislative Assistant/Education, Clerk; Rachel 
Racusen, Press Assistant; and Julie Radocchia, Legislative 
Associate/Education.
    Chairman Keller [presiding]. A quorum being present, the 
Subcommittee on 21st Century Competitiveness will come to 
order.
    We are meeting today to hear testimony on the Internet and 
the college campus, and how the entertainment industry and 
higher education are working to combat illegal piracy.
    Under committee rule 12(b), opening statements are limited 
to the chairman and ranking member of the subcommittee. 
Therefore, if other members have statements, they may be 
included in the hearing record.
    With that, I ask unanimous consent for the hearing record 
to remain open 14 days to allow member statements and other 
extraneous material referenced during the hearing to be 
submitted. Without objection, so ordered.
    Good morning. I am pleased to convene today's hearing to 
discuss illegal downloading and piracy of copyrighted material 
through college and university computer networks. The purpose 
of today's hearing is to talk more about illegal downloading, 
and to highlight innovative ways in which some universities 
across the country are dealing with this problem.
    The university environment creates a perfect storm for 
piracy. College students, who are computer and Internet savvy, 
use state-of-the-art computers and the fastest computer 
networks in America to find the music, movies and other 
entertainment products that they love.
    The downside is some college students engage in illegal 
peer-to-peer file sharing, which can allow viruses to invade 
the networks and to take up valuable space on the college 
servers which should be used for legitimate educational 
purposes.
    In addition, a recent survey determined that piracy by 
college students accounted for over $500 million in losses to 
America's film industry alone, which results in a significant 
loss of tax revenue to the Federal Government due to lost 
sales. So if you steal from Disney, you are also stealing from 
Uncle Sam. In other words, if you take Mickey's cheese, you are 
also taking the government cheese. As the chubby congressman 
from Disney World, I like my cheese.
    [Laughter.]
    So let me begin by giving you a brief demonstration of how 
this illegal file sharing takes place. These Internet file-
sharing applications are freely available and easy to download 
and install.
    When you startup the application, in this case LimeWire, 
you are presented with this window to begin your search. What 
we will do is type in the search field a particular artist. We 
will type in Kenny Chesney, and that will search for all the 
works by this famous country music recording artist. As you can 
see, it brings up pages and pages of Kenny Chesney's songs, all 
of the various hits that he has had.
    What we will do now is select one particular song. On the 
top there, we will select ``Summertime,'' and you will be able 
to watch the progress of the download at the bottom of the 
window. Downloading is pretty fast, usually in a minute or 2, 
and multiple downloads can be done.
    Here, we have searched one musician's works. We could 
search thousands of movies and different software titles and 
other copyrighted works.
    Once the download is complete, and it is nearing it now, 
you will be able to select the file and then launch the built-
in player to listen to that song right then and there. And you 
will see in just a second this song will pop up with the built-
in player. As you can see, the download is now complete. The 
built-in player will kick in.
    And there you have it. All right? So you just saw, from 
launch to search to download to listening, the entire process 
took less than 2 minutes. If an unsophisticated, technology-
challenged, 42-year-old congressman can steal a song in less 
than 2 minutes right in front of your eyes, just imagine how 
easy it is for a sophisticated MIT computer major to steal 
music and movies.
    Well, the good news is that while universities are in the 
center of this storm, they are also in the best position to 
confront the problem. To help them, in March of this year, the 
House passed H.R. 609, which reauthorized the Higher Education 
Act and included language at my request to allow universities 
to use Federal funds to combat this problem.
    For example, the University of Florida has had great 
success with technology called CGRID to block illegal 
downloading on campus.
    Piracy is not a new issue for Congress. I am a member of 
the Judiciary Committee's Intellectual Property Subcommittee, 
where my good friend Lamar Smith has held three hearings on 
this subject. In addition, Chairman Buck McKeon has wisely 
called for a renewed commitment to addressing the illegal 
downloading of copyrighted material on college campuses.
    I hope that today's discussion encourages universities to 
take a fresh look at what is going on on their campuses and 
helps them to focus their efforts.
    We have a very impressive group of witnesses this morning, 
and I look forward to hearing from them, as well as my esteemed 
colleagues, on this issue.
    With that, I yield to my ranking member, Mr. Kildee, for 
any statement that he may have.
    [The prepared statement of Chairman Keller follows:]

 Prepared Statement of Hon. Ric Keller, Chairman, Subcommittee on 21st 
   Century Competetiveness, Committee on Education and the Workforce

    Good morning. I am pleased to convene today's hearing to discuss 
illegal downloading and piracy of copyrighted material through college 
and university computer networks.
    The purpose of today's hearing is to talk more about illegal 
downloading, and to highlight innovative ways in which some 
universities across the country are dealing with this problem.
    The university environment creates a perfect storm for piracy. 
College students, who are computer and internet savvy, use state-of-
the-art computers and the fastest computer networks in America to find 
the music, movies and other entertainment products that they love.
    The downside is some college students engage in illegal peer-to-
peer file sharing, which can allow viruses to invade the networks, and 
to take up valuable space on the college servers which should be used 
for legitimate, educational purposes. In addition, a recent survey 
determined that piracy by college students accounted for over $500 
million in losses to America's film industry alone.
    Let me give you a brief demonstration of how this illegal file 
sharing takes place.
    File-sharing applications allow millions of computer users around 
the world to connect and trade unauthorized copies of copyrighted 
works, including music, movies, and software. These file-sharing 
applications are freely available on the Internet and are easy to 
download and install.
    When you start up the application--in this case, Limewire--you are 
presented with this window to begin your search.
    You type a term in the search field--for example, typing in ``Kenny 
Chesney'' will search for all works by that artist.
    You see that, immediately, you are presented with a number of 
results--in this case, pages of Kenny Chesney songs, free for 
downloading from users all over the world.
    Selecting one song in the list will begin the download process. You 
can watch the progress of the download at the bottom of the window. 
Downloading time is very fast, usually a minute or less, and multiple 
downloads can be done at one time.
    Here, we've searched for one musician's works but, again, it's just 
as easy to find thousands of movies, software titles, and other 
copyrighted works.
    Once the download is complete, you can select the file, and launch 
the built-in player to listen to the song right then and there.
    From launch, to search, to download, to listening--the entire 
process took less than 2 minutes.
    These are the types of applications, without appropriate protection 
measures, that have caused great concern on the part of the 
entertainment and other content industries. These are also the types of 
applications that are prevalent on college campuses across the country, 
forming the basis of our discussion today.
    The good news is that while universities are at the center of this 
storm, they are also in the best position to confront the problem. To 
help them, in March of this year, the House passed H.R. 609, which 
reauthorized the Higher Education Act and included language, at my 
request, to allow universities to use federal funds to combat this 
problem.
    Piracy is not a new issue for Congress. I am a member of the 
Judiciary Committee's Intellectual Property Subcommittee where my good 
friend, Lamar Smith, has held 3 hearings on this subject. In addition, 
Chairman Buck McKeon has wisely called for a ``renewed commitment'' to 
addressing the illegal downloading of copyrighted material on college 
campuses.
    I hope that today's discussion encourages universities to take a 
fresh look at what's going on on their own campuses and helps them to 
focus their efforts.
    We have a very impressive group of witnesses this morning, and I 
look forward to hearing from them, as well as my esteemed colleagues. I 
now yield to the Ranking Member Mr. Kildee for his opening comments.
                                 ______
                                 
    Mr. Kildee. Thank you, Mr. Chairman.
    First of all, I want to especially welcome the panel, but 
especially Dan Glickman, my classmate in Congress. We came to 
Congress together, took the oath together on January 3, 1977. 
Mr. Glickman, like myself, is also an alumnus of the law 
school, although I studied Latin there at the University of 
Michigan.
    We are happy to have you here, Dan. Good to see you again.
    Thank you again, Mr. Chairman, for convening this hearing.
    As I recall, during the floor debate on H.R. 609, the 
Higher Education Reauthorization bill, there was a potential 
amendment aimed at addressing the problem of illegal 
downloading on college campuses. We can all agree that this 
practice is illegal, and no one should condone students 
engaging in illegal downloading.
    Steps should be taken to curb the practice, but the 
amendment was thought by some to be too heavy-handed of a 
response. The loss of Federal student aid funds would be too 
drastic an approach to a troublesome, but potentially solvable 
problem. I was pleased to see that the amendment was not 
offered in the end, and that the committee has been given this 
opportunity to examine the issue more thoroughly.
    Illegal use of peer-to-peer file sharing on college 
campuses presents a complex set of problems, including 
copyright infringement, unclear placement of liability, and of 
course, costs to both the industry and to the colleges. I am 
pleased to learn that the Motion Picture Association of America 
and the Recording Industry Association of America have fostered 
positive partnerships with colleges in addressing this problem.
    I am looking forward to your testimony to learn more about 
what you are doing on college campuses. I am also happy to see 
that Dr. William Fisher, director of the Berkman Center for 
Internet and Society at Harvard Law, has been able to join us. 
I am looking forward to hearing his thoughts on educational 
uses for peer-to-peer technology and his discussion of how we 
can and should promote legal forms of peer-to-peer file 
sharing.
    Mr. Chairman, I want to thank you again for convening this 
hearing. I look forward to hearing our witnesses.
    Chairman Keller. Thank you, Congressman Kildee.
    We have a panel of distinguished witnesses today. I am 
eager to hear their testimony. I would like to begin by 
introducing them.
    Dr. William Kirwan is the chancellor of the University 
System of Maryland. Dr. Kirwan is currently the co-chair of the 
Joint Committee of the Higher Education and Entertainment 
Communities.
    Mr. Dan Glickman is the chairman and CEO of the Motion 
Picture Association of America. The MPAA serves as the voice 
and advocate of the American motion picture, home video and 
television industries.
    Mr. Cary Sherman is the president of the Recording Industry 
Association of America. The RIAA is a trade group comprised of 
companies that are responsible for the creation, manufacture or 
distribution of 90 percent of all legitimate sound recordings 
sold in the United States.
    Ms. Cheryl Elzy joined the faculty of the Illinois State 
University-Normal Library in 1981 and has since served as an 
associate university librarian for personnel, associate dean of 
university libraries, and headed the education, psychology and 
Teaching Materials Center division.
    Dr. William Fisher has taught at Harvard Law School since 
1984. Dr. Fisher currently serves as the Hale and Dorr 
professor of intellectual property law and the director of the 
Berkman Center for Internet and Society.
    Before the panel begins, I would like to remind the members 
that we will be asking questions of the witnesses after their 
testimony. In addition, committee rule 2 imposes a 5-minute 
limit on all of the questions.
    Let me explain a little to the witnesses. You will have 5 
minutes to give your testimony. We are going to try to stick to 
that, just because we want to make sure that the members have a 
chance to ask you questions, and you can give them your 
responses. You will see a green light when it is time for you 
to speak. A yellow light will come on when you have 1 minute 
left and then the red light when you need to wrap it up because 
time will be expired.
    I would now like to begin by recognizing Dr. Kirwan for his 
testimony.

STATEMENT OF WILLIAM E. KIRWAN, CHANCELLOR, UNIVERITY SYSTEM OF 
                            MARYLAND

    Mr. Kirwan. Mr. Chairman, Congressman Kildee and members of 
the committee, thank you very much for this opportunity to come 
and speak about this very important issue.
    I told the chairman that, with your permission, I need to 
leave at 12:15 p.m. because I will be participating in 
Secretary Spellings's announcement of this important report.
    By way of background, I am chancellor of the University 
System of Maryland, with 11 degree-granting institutions in 
that system with about 125,000 students. The University System 
of Maryland has for some years collaborated with RIAA and MPAA, 
as well as AAU and Educause on this issue of file sharing. As 
the chairman noted, I have just joined the joint committee and 
will serve as its co-chair.
    There are many compelling reasons why higher education must 
address this issue. First and foremost, if members of our 
community are using our resources to do something illegal, we 
have an obligation, a fundamental obligation to respond and 
address that matter. Also, intellectual property is one of the 
coins of the realm of higher education. We want to raise a new 
generation of people who have great respect for and value the 
sanctity of intellectual property. So it is an obligation on 
our part to ensure that our students are educated properly in 
this way.
    There are other reasons, more practical reasons that follow 
this very basic responsibility. This illegal file sharing taxes 
our systems. It introduces spam and viruses into our system. So 
there is a cost associated with this illegal use of our 
computer networks, and so that adds even more urgency to us to 
address this problem.
    I want to say that I think many, if not most, of my 
colleagues in higher education and their institutions are 
taking this problem very seriously.
    Let me just describe very briefly what we do within the 
University System of Maryland. We have what we call a four-part 
program. First of all, the system has an articulated policy 
that applies to all of our institutions, covering acceptable 
use of the Internet.
    Second, our board of regents has imposed a core curriculum 
requirement. Every student must take a course where the ethical 
use of the Internet, including the issue of file-to-file 
sharing, is discussed. Moreover, every institution has 
technology that enables it to monitor the use of the Internet 
to understand and identify inappropriate traffic. Also, every 
campus has a legal alternative. We use services such as Cdigix 
and Ruckus so that students very inexpensively can legally 
download and purchase copyrighted materials.
    I look forward to my work with the joint committee. I 
believe that it provides a forum and a mechanism for us to 
address this problem and to bring it under control. In our 
efforts, I do want to mention that we are seeing increasing 
legitimate use of peer-to-peer file sharing in higher education 
and elsewhere.
    For example, the National Cancer Research Institute has a 
peer-to-peer file-sharing effort promoting some of its 
research. There is also the Ockham digital library project, 
which uses peer-to-peer file sharing to make legal access to 
library materials possible.
    So as we approach this very important problem which we must 
solve, we also have to be mindful that we cannot throw the baby 
out with the bathwater. We have to get rid of the bathwater for 
sure, but we do need to be sensitive to what are very 
legitimate uses of peer-to-peer file sharing.
    I know my time is running out. Let me just say, Mr. 
Chairman, I have submitted written testimony, and I am eager to 
begin my work with the joint committee and look forward to our 
efforts to solve this problem and bring it completely under 
control.
    Thank you very much.
    [The prepared statement of Mr. Kirwan follows:]

     Prepared Statement of William E. ``Brit'' Kirwan, Chancellor, 
                     University System of Maryland

    Mr. Chairman and members of the committee, I am pleased to have the 
opportunity to comment on the very important and troubling issue of 
illegal piracy of intellectual property through campus-based, peer-to-
peer file sharing.
    By way of background, the University System of Maryland (USM), 
where I serve as Chancellor, consists of 11 degree granting 
institutions as well as 2 specialized research centers. We enroll over 
125,000 students (both full and part-time) with over 6,600 faculty 
members.
    In recent years the USM has worked collaboratively with the 
Recording Industry Association of America (RIAA) and Motion Picture 
Association of America (MPAA) as well as with the Association of 
American Universities (AAU) and Educause, whose very mission is to 
advance higher education by promoting the intelligent use of 
information technology, on the issues of file sharing and copyright 
infringement. I am also the newest member of the Joint Committee of the 
Higher Education and Entertainment Communities, a group formed three 
years ago to foster collaboration between the higher education and 
entertainment communities in addressing unauthorized campus peer-to-
peer (P2P) file sharing. I will serve as co-chair beginning on November 
1.
    While I may be new to this Committee, I am certainly not new to the 
issue of peer-to-peer file sharing on our campuses. Colleges and 
universities have, to some degree, held center stage in the peer-to-
peer discussions for some time now. As you all know, with faster 
computers and better programs, ``big pipes'', and a population of young 
people who are both technologically savvy and very vested in their 
music and entertainment, our institutions bring together several 
factors that drive file sharing. I might observe, however, that with 
the expansion of broadband to all businesses and to the home, higher 
education is no longer in the unique position regarding networking that 
it was a decade ago.
    One of the most compelling reasons why we must have a clear and 
coherent approach to this issue is our obligation to not only abide by 
the existing copyright statutes, but also, and perhaps more 
importantly, to engender within our students a respect for intellectual 
property ownership and the law. If this were the only matter to be 
dealt with, it would, in and of itself, be sufficient reason to act. 
Our legal obligations to act are joined with our ethical 
responsibilities.
    Of course, other issues come into play as well. For example, we all 
know how abuse of campus networks creates significant problems: It can 
saturate and overtax existing networks bandwidth; it costs institutions 
money in increased support costs; and it also introduces the potential 
of increased electronic security risks on campus through spyware, 
viruses, increased ``spamming,'' and even identity-related issues.
    I can state without hesitation that higher education is at the 
front of the line of people who want this unauthorized activity to 
stop. The money and time it takes to clean up after it is significant. 
In addition, plenty of students complain that the activity is clogging 
up the network to the point that they can't get their work done.
    Given higher education's place in this discussion, it is clearly 
incumbent upon us in the higher education community to take aggressive, 
proactive steps to end illegal peer-to-peer file sharing. I am pleased 
to say that the University System of Maryland takes this obligation 
seriously and is acting accordingly.
    First and foremost, as a systemwide operational procedure, every 
institution scrupulously adheres to our obligations under that the 
Digital Millennium Copyright Act (DMCA), responding to all inquires.
    In addition, the USM has instituted a 4-point systemwide strategy: 
First, every institution must have an articulated policy covering 
acceptable use of network resources that clearly respects the network 
as a shared resource and particularly prohibits illegal activity. Each 
institution takes this policy seriously and enforces it accordingly. 
Second, every institution has programs to educate students, faculty and 
staff as to what is legal and illegal. Additionally, the University 
System Board of Regents has established a technology literacy 
requirement that follows recommendations of the National Research 
Council. In particular, there is an expectation that academic programs 
include discussions of the ethical and societal impact of technology. 
Each institution has responded to this requirement. Third, each 
institution employs technologies that monitor its network and in 
particular identify inappropriate traffic, watching for signatures and 
characteristics of illegal activity. I stress that we do NOT examine 
content and therefore maintain privacy rights. Fourth, every 
residential campus provides a legal alternative, such as Cdigix and 
Ruckus, which enable the legitimate purchase of copywrited material.
    I also note that the Joint Committee of the Higher Education and 
Entertainment Communities is highly vigilant and effectively proactive 
in assisting campuses in identifying and eliminating illegal peer-to-
peer activity. Over its first few years, this voluntary cooperative 
venture worked to educate campus communities on copyright law and its 
application to campus peer-to-peer file sharing, promoting campus 
policies and best practices to reduce file sharing, and technological 
mechanisms for controlling file sharing. More recently, the Joint 
Committee expended considerable effort to promote pilot projects 
between campuses and legitimate digital content delivery services. 
Going forward, the Committee will be taking additional steps: updating 
and broadly redistributing the 2003 white paper on the legal aspects of 
campus peer-to-peer file sharing; updating the campus policies and 
practices paper, augmented by current research on what approaches to 
reducing unauthorized file sharing are particularly effective; and 
convening a meeting with legitimate digital content delivery services 
with programs on our campuses, to explore what is working well and what 
obstacles remain.
    I must point out, however, that in our effort to eliminate illegal 
use of file sharing we must also protect the ability of colleges and 
universities to conduct legitimate peer-to-peer activity. There has, in 
fact, been significant growth in this area, especially among scientists 
and researchers who deal with large datasets.
    For example, in the field of bioinformatics, peer-to-peer networks 
can be used to run large programs designed to carry out tests to 
identify drug candidates. I know the National Foundation for Cancer 
Research is involved in such a cooperative effort. There is also the 
Ockham digital library project, a peer-to-peer system linking digital 
libraries funded by the National Science Foundation that makes content 
more accessible, especially to the millions served by the libraries of 
the nation's colleges and universities. In addition, there is a lot of 
campus-developed open-source software distributed via P2P, such as 
LionShare, a secure peer-to-peer file sharing application enabling 
legal file sharing at Penn State University.
    Use of legitimate peer-to-peer is not unique to academia; Warner 
Brothers has formed a partnership with BitTorrent, one of the most 
widely used file-sharing clients, in an effort to convert users into 
customers.
    I will conclude my brief testimony with the following observation: 
We in higher education recognize our responsibility to stop 
unauthorized activity. We take copyright law seriously, both as users 
and producers of copyrighted material. With the steps we have taken at 
USM, we have seen a significant drop in illegal peer-to-peer activity. 
Of course, as new peer-to-peer technologies are implemented, we sees 
spikes in illegal activity, which only serves to remind us that we must 
stay vigilant. Overall, however, our long-term trend in the area is 
moving in the right direction.
    From my perspective, cooperation, collaboration, and active 
engagement are the keys to continued progress. We have experienced real 
and meaningful results in recent years because we have established 
cooperative relationships. I am convinced that if we build upon these 
relationships, through efforts such as the Joint Committee, we can 
address the problem of illegal peer-to-peer activity while maintaining 
the ability to conduct legitimate and important academic and research 
endeavors.
    Once again, I appreciate the time and attention of this 
subcommittee and look forward to our continuing efforts to address this 
important matter. Thank you.
                                 ______
                                 
    Chairman Keller. Thank you very much for your testimony, 
Dr. Kirwan.
    Now, Mr. Glickman, we would be pleased to hear from you.

STATEMENT OF HON. DAN GLICKMAN, CHIEF EXECUTIVE OFFICER, MOTION 
   PICTURE ASSOCIATION OF AMERICA, FORMER MEMBER OF CONGRESS

    Mr. Glickman. Thank you, Chairman Keller, Mr. Kildee and 
members of this committee. It is a great honor to be back at 
the House. I look at the pictures of Chairmen Ford, Hawkins, 
Goodling and Boehner, who I all served with. They are looking 
younger each time I come back here, I would say. But it is a 
great honor to be back here.
    Let me just start with the message that piracy is the 
greatest obstacle the film industry currently faces. We 
recently commissioned a study by the international consulting 
firm, LEK, that found that our industry lost $6.1 billion to 
piracy in 2005. That is the U.S. film industry.
    We estimated, as you pointed out, that nearly half, 44 
percent of our industry's domestic losses, over $500 million 
annually, are attributable to college students. The piracy loss 
calculation is based on the number of legitimate movies, movie 
tickets, DVDs and the like, that would have been purchased if 
pirated versions were not available.
    As you know, this affects profitability. It affects 
investments. It affects tax revenue due to local, state and 
Federal Governments. And in addition to that, the problem of 
piracy also adds significant costs to the universities' bottom 
line which is contained in my statement.
    The bad news is that peer-to-peer piracy is still going on 
and many universities are not responding as quickly as we would 
like. The good news is that many universities are beginning to 
get the message, as Dr. Kirwan talked about, and that there are 
solutions available today and some best practices which can 
significantly reduce campus network abuse.
    They are, one, technology. The most effective means to 
reduce campus piracy is through the use of innovative and 
effective technological tools right now. In the Grokster case, 
decided last year, the Supreme Court found that there is 
evidence of infringement on a gigantic scale on P2P systems.
    These systems also show prevalence of pornography, identity 
theft, spyware viruses and other problem services, and 
therefore the court said it is appropriate to restrict illicit 
P2P access on these kinds of networks. We are talking today 
about university networks.
    My statement talks about technological options such as 
CGRID, previously called Icarus, at the University of Florida. 
When that system was put on, it effectively stopped and 
reminded online through an educational message that such 
activity was against university policy. The school has received 
no infringement notices under the Digital Millennium Copyright 
Act since the inception of this technology.
    There are other technologies out there, Audible Magic, 
Packeteer. Indeed, most universities have these bandwidth-
shaping tools already in place and need only to calibrate them 
in such a way as to frustrate those who would use their 
bandwidth to upload and download copyrighted works. So we need 
to work much more aggressively in getting universities to adopt 
the technologies available to try to stop this problem.
    The second issue has to do with legitimate services. The 
important thing is for our industry and the music industry, 
working with the universities, to offer services, and I have 
listed them in my testimony, so that the students can be 
offered a wide array of entertainment content in a reasonably 
priced, hassle-free, safe and legal way. In fact, we are doing 
so right now and more and more of these services are coming 
onboard.
    The third area is education. It is critical that colleges 
and universities clearly and repeatedly inform students of the 
importance of respecting copyrighted works, campus policies and 
the law. As creators and owners of intellectual property 
themselves, colleges and universities would seem to have a 
large incentive to instill a sense of value for copyrighted 
works.
    Before I came to this job, I spent 2 years as a director of 
the Institute of Politics at the Kennedy School at Harvard. One 
of the things we found is the orientation process can be an 
extremely effective way if universities give it priority to 
educate kids on a variety of messages. Whether it is in the 
form of illegal activities taking place, voting, all sorts of 
things, that if schools made education a higher priority, I 
think we would have a great deal of effectiveness in this area.
    The final thing is enforcement. It is important to make 
clear the institutional commitment to its policies. Enforcement 
measures must be consistent and meaningful. We have found that 
recidivism among students is low at schools with well-defined 
and applied enforcement policies. I think you have heard from 
the University of Maryland. I know that Illinois State 
University is going to be talking about these issues as well.
    It is my hope that this subcommittee will continue to 
provide a forum for resolving this issue. Your continuing 
oversight is critical. I would ask that you consider requiring 
regular reporting from the higher education sector, detailing 
what real measures are being taken to halt the misuse of campus 
resources for the purposes of eroding the copyright industries 
through widespread piracy.
    We want to work with you. We think there are great 
opportunities. We see that the glass is half full, but this 
will require a multi-prong approach. With that approach, 
working collaboratively, I think we can really deter and 
hopefully end this problem.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Glickman follows:]

   Prepared Statement of Hon. Dan Glickman, Chairman and CEO, Motion 
       Picture Association of America, Former Member of Congress

    Chairman Keller, Congressman Kildee, members of the Subcommittee: 
On behalf of the member companies of the Motion Picture Association of 
America, I thank you for the opportunity to talk to you about the film 
industry's efforts to address peer-to-peer (P2P) piracy on college and 
university campuses. The livelihoods of nearly one million men and 
women in America are impacted by the film and television industry, 
which entertains millions of consumers every day.
    Piracy is the greatest obstacle the film industry currently faces. 
A recently released study, conducted by the international consulting 
firm LEK, found that U.S. film industry lost $6.1 billion to piracy in 
2005. That same study estimated that 44% of our industry's domestic 
losses, over $500 million annually, are attributable to college 
students. An earlier Deloitte and Touche study estimated that 
approximately 400,000 films are illegally downloaded every day. 
CacheLogic, an Internet monitoring group, has estimated that over 60 
percent of all Internet traffic in the U.S. is attributable to peer-to-
peer usage. Furthermore, well over 90 percent of all the content on P2P 
networks consists of unauthorized copyrighted files.
    Further, it is important to understand that the film industry rests 
upon a fragile fiscal base. Each film is a massive upfront investment 
with absolutely no guarantee of return. The average film costs over 
$100 million to make and market. Only one in ten films recoups this 
investment through its theatrical release. Six in ten films never break 
even. To recoup the considerable investment required to make and market 
a movie, the film industry relies on foreign distribution and ancillary 
markets (home video/DVD, pay per view, premium cable, basic cable, free 
TV, etc.) to make a profit or break even. It is these ancillary 
markets, especially home video and foreign distribution--economic 
engines that are essential to this industry--that are most vulnerable 
to the corrosive effects of film piracy.
    To address this issue, MPAA and our member studios have launched 
aggressive public campaigns to instill the fact that the illegal 
downloading of movies is in fact no different than shoplifting.
    Because of the statistics I shared earlier, a major focus of our 
outreach and education efforts has been college and university 
campuses. While some students are certainly carrying out this activity 
from off-campus network computers, the fact is that today, college and 
university campuses harbor some of the swiftest computer networks in 
the country. While this state-of-the-art technology is critical to the 
success of our nation's higher education institutions, it has 
unfortunately led to a situation where there is a significant level of 
misuse and abuse of these networks in the form of around the clock 
piracy.
    While this issue certainly presents significant challenges, the 
prospects for overcoming those challenges are buoyed when we can work 
cooperatively with the higher education community. Efforts such as the 
creation of the Joint Committee of the Higher Education and 
Entertainment Communities Technology Task Force, which was formed to 
develop collaborative solutions to address illegal file sharing on 
college campuses; the commitment by the American Council on Education 
to distribute orientation materials produced by the Recording Industry 
Association of America (RIAA) to all of its member presidents and 
institutions; and a continuing dialogue between MPAA member studios and 
individual campus leaders are examples of cooperative action to combat 
the misuse and abuse of campus networks.
    Strong action to reduce this abuse of campus resources makes sense 
not only from the perspective of the copyright community but to the 
higher education sector and the general population as well. I say this 
because when legitimate commerce is sabotaged by widespread theft of 
intellectual property there is a significant loss in tax revenue due to 
lost sales. In addition, increased costs are often associated with 
maintaining a network that allows illegal file-sharing. While 
government appropriations should of course be used to facilitate 
legitimate and legal activity on school computing systems, such funding 
should certainly not be used to facilitate illegal activity. As for the 
universities themselves, the following can add significant costs to 
their collective bottom lines:
     P2P file-sharing takes up valuable network bandwidth 
intended for educational purposes;
     P2P file-sharing threatens school networks and computers 
with malicious viruses, spyware, and other malware; and
     Handling of infringement notices from copyright holders 
and lawsuits brought against students can be a costly administrative 
burden.
    I am grateful that Members of this Committee also recognize the 
severity of this issue, and the pivotal role the higher education 
community can play in curtailing the theft of movies and other 
copyrighted works online. This recognition is evident by the fact that 
you are holding this hearing today. This Committee has demonstrated 
leadership on this issue through its support of one possible solution 
for addressing it--by including legislative language in the House- 
passed Higher Education Act Reauthorization bill. We are hopeful this 
provision, which would help fund innovative efforts to combat piracy on 
campuses, will eventually become law. We continue to encourage the 
Senate Committee leadership to include this provision in their version 
of the HEA reauthorization bill, as well.
    To further demonstrate our industry's recognition of and commitment 
to this issue, last year I established a new enterprise within the MPAA 
called External Affairs & Education. This new department is dedicated 
to working with educators, administrators and student leaders to affect 
behavior and policy.
    Since the establishment of this new department within MPAA, we have 
spent a great deal of time traveling to campuses nationwide and 
convening face to face meetings with administrators and students. I 
have also personally traveled across the country as part of a speaking 
tour of college campuses where I have engaged with students and campus 
leaders about the effects and dangers of illegal file sharing.
    The chief goal of this outreach has been to learn more about what 
campuses are currently doing to address this issue of piracy and to, in 
turn, share what we have learned with other institutions. This emerging 
set of what the MPAA would call ``Best Practices'' provides a roadmap 
for administrators to follow in order to meaningfully impact the 
problem of network abuse and illegal copyright theft.
    Nearly two years into this effort, I am pleased to report that a 
number of schools have already taken significant measures to preserve 
the integrity of their networks by curtailing the abuse of those 
resources. The University of Connecticut, the University of Florida, 
Illinois State University, Vanderbilt University among others are 
making clear to their students that illegal activity will not be 
condoned and, whenever possible, will be prevented.
    However, with a new academic year underway, the infringement rates 
at universities across the country continue at unacceptably high 
levels. I am hopeful that the attention of this committee will serve as 
a motivator for our colleagues in higher education to take real and 
effective measures to reduce the misuse of their campus computer 
networks.
    I'd like to use the remainder of my time to share with this 
Committee what we have discovered and what we would recommend 
university administrators adopt to impede their students' illegal 
activity via campus networks.
    Our suggestions focus on four areas that have proven effective for 
those schools that have taken action: (i) network filters and other 
technological measures, (ii) legitimate online services, (iii) 
education, and (iv) enforcement. Undoubtedly, education and enforcement 
continue to be important components in any program schools undertake to 
address piracy. However, experience has shown that the offering of a 
legitimate online service, coupled with an effective network technology 
that decreases or, preferably, eliminates illicit peer-to-peer 
(``P2P'') file-sharing traffic, produces the best results for colleges 
and universities.

Technological Measures
    As you are undoubtedly aware, a significant proportion of piracy on 
campus is occurring through illicit P2P services, which enable 
individuals to copy and distribute millions of unauthorized songs, 
movies, software applications and games. The P2P applications that 
enable this illegal activity, freely available as downloads over the 
Internet, are tremendously popular at colleges and universities where 
students have access to extremely fast computing networks.
    In the much-publicized Grokster case, the U.S. Supreme Court 
recently stated that ``there is evidence of infringement on a gigantic 
scale'' on certain P2P systems, and it has been estimated that over 90 
percent of the non-pornographic use on these systems is infringing. 
(Pornography, including child porn, and identity theft are also very 
prevalent on such systems.) With such a disproportionate amount of 
illegal traffic on certain P2P protocols (and given the threat to 
network security and individual computers from viruses and other 
malware), it seems entirely appropriate to restrict the use of these 
illicit P2P systems generally. While prohibiting the use of 
predominantly illegal P2P applications, universities can still protect 
and promote the emerging legitimate uses of other P2P applications for 
research and scholarship.
    This approach has already been employed at certain universities to 
extraordinary effect. For example, the University of Florida developed 
Icarus (now called CGRID), a network-based system, that can selectively 
prohibit the transmission of any information bearing the signature of 
an unapproved P2P application, and manages adherence to University 
policies. The CGRID architecture supports other capabilities to address 
the full range of security management issues including: viral and worm 
attacks; spyware; and other outbound malicious behavior. Addressing 
these issues can have tremendous positive effects on the operation and 
cost efficiencies of the university network.
    Some statistics on implementation of this technology at Florida 
tell the whole story. In the first year of operation, there were nearly 
two thousand students that attempted to use P2P systems. They were 
effectively stopped and reminded online through an educational message 
that such activity was against University policy. Only 20 percent tried 
a second time and only 2 percent a third time. As new classes of 
students were introduced in the next two academic years, these numbers 
were reduced by 50% and 80 percent respectively. Additionally, the 
school has received no DMCA infringement notices since the inception of 
the technology. In fact, the developers of CGRID were recognized by the 
Davis Productivity Awards for their work. The awards are part of a 
government improvement initiative in Florida and sponsored by Florida 
TaxWatch. The awards panel estimated that ICARUS saved the University 
of Florida nearly half a million dollars by reducing the flow of 
illicit P2P onto UF computer networks and automating the notification 
process when a violation of policy did occur. The University of Florida 
also estimated additional savings of $2 million over two years 
attributable to delaying the pace of network build out that had 
previously taken place to accommodate the appetite of those abusing the 
network for unauthorized file swapping. These are real savings to the 
institution and to taxpayers.
    While exceptions can be made for appropriate use of such 
applications, it is not surprising that the school has received very 
few requests for permission to use illicit P2P systems. Indeed, it is 
questionable whether many of the larger P2P applications are at all 
necessary (or beneficial) in an academic environment. Faculty and 
students remain able to share and distribute academic material through 
such secure and reliable means as websites, FTP, and email. In 
addition, there are legitimate and licensed P2P networks emerging--such 
as Penn State's LionShare--which are dedicated to, and specially 
configured for, academic environments.
    Should a university not find feasible the implementation of 
programs such as CGRID, MPAA suggests installing one of many available 
network filtering systems. Rather than prohibiting all P2P or other 
applications based on a particular protocol, these systems filter out 
infringing transmissions by matching them against a master database of 
copyrighted works that are not authorized for unrestricted 
transmission. This technology works the same way as the technology that 
most schools already employ to scan for viruses and other malware 
transmitted over their networks.
    A third option is to effectively implement a bandwidth shaping tool 
such as Packeteer. Although limiting the resources available for 
infringement is always a positive step, the way such technology is 
being implemented at most schools too often renders the application 
ineffectual. There are schools that ratchet down bandwidth allowance 
during the peak hours of the day, and then provide increased bandwidth 
at night. While this process may reduce infringement to some extent, it 
unfortunately sends the wrong message that illegal file-sharing is 
acceptable--as long as it's done at certain times. This is a minor and 
short-term fix for a much larger and long-term problem. By sanctioning 
such ``windows of infringement,'' schools do little to discourage 
students from engaging in piracy (and, of course, fail to impart a 
sense of ethical behavior and appropriately prepare their students for 
life after college as moral and law-abiding citizens).
    Effective technical measures are essential to combating internet 
piracy at universities because such measures can stop the vast majority 
of piracy before it takes place. This reduces the burden on the 
university of processing potentially thousands of infringement notices 
and directly targets the problem of student piracy on university 
networks.
    By employing technologies that prohibit infringement-based P2P-
networks on campus or otherwise prohibit the transmission of infringing 
content, schools can also lay the groundwork for the second component 
of a proven anti-piracy campaign: the successful implementation of 
legitimate online content distribution services on campus.

Legitimate Online Services
    The digital generation of today is among the brightest and most 
innovative this nation has seen. This generation has made clear that 
they want to access their entertainment in a myriad of ways, be it an 
iPod, a PSP or a new device not yet imagined. To that end, our industry 
recognizes the demand for new ways to obtain digital entertainment 
online. This is one reason that we encourage the higher education 
community to not only work towards eliminating illegal internet piracy 
of copyrighted works but also to satisfy the appetite for online 
entertainment by making available to students one of the many 
legitimate services now in the marketplace.
    Students' adoption rates for legitimate online music and movie 
services are typically highest after the school first takes steps to 
reduce illegal internet piracy on campus. Services and schools alike 
have reported particularly positive results from this staggered 
approach. (Experience has also shown that it may be unwise to implement 
both network filtering technology and a legitimate online service 
simultaneously, as students tend to blame the online service for the 
cutoff in illegal file-sharing.) Without first addressing the illicit 
P2P problem on campus, it is extremely difficult for legitimate 
services to take root. If students have unfettered access to enormous 
amounts of pirated content, no service--regardless of pricing or 
content offerings--will be successful in that environment.
    Overall, the growth of legitimate online services at colleges and 
universities across the country has been exceptional. The number of 
schools partnering with a legitimate service has grown to more than 
100. There are literally dozens of exciting, legal services offering 
movies and music to the online consumer. Services such as Cdigix, 
CinemaNow, iTunes, Movielink, MovieFlix, Napster, Peer Impact, 
Rhapsody, Ruckus, Starz and so many others offer a wide array of 
entertainment content in a reasonably priced, hassle free, safe, and 
legal way.
    And MPAA member companies continue to do more to meet the clear 
consumer demand for more choice and flexibility in their filmed 
entertainment selections. We are heavily involved in ongoing efforts to 
create the next generation of secure, consumer-friendly digital 
delivery platforms to meet that demand. We recognize that the speeds of 
transfer so dazzling today will likely seem akin to a horse and buggy 
when new technologies such as Internet2 become the standard. To that 
end, MPAA has joined Internet2 as a corporate member. MPAA plans to 
collaborate with the Internet2 community to consider innovative content 
distribution and digital rights management technologies, and to study 
emerging trends on high-performance networks to enable future business 
models. We view secure, high speed Internet delivery of films as being 
integral to our industry's future, and we are excited by the 
possibilities this collaboration presents.
    In addition, MPAA has established and funded ``Movie Labs,'' a 
research and development venture that will develop copyright management 
and other technologies to reduce piracy. The future of film depends 
upon the development of innovative delivery technologies allowing new, 
user-friendly business models, and the film industry is diligently 
working to make these technologies a reality. So you can see that, 
while we continue our appeal for others to do their part in preventing 
the illegal abuse of copyrighted works, we are appropriately taking the 
lead in this regard.

Education
    Obviously, education is an extremely important component of any 
anti-piracy campaign. Colleges and universities are in the best 
position to inform students of the importance of respecting copyright 
and valuing the creative effort invested in copyrighted works. Further, 
as creators, developers, and owners of intellectual property 
themselves, colleges and universities have a huge incentive (and 
responsibility) to instill in their students such respect and values. 
The following are some examples of steps schools can take toward 
educating students about illegal file-sharing and copyright 
infringement generally:
     Institute Acceptable Use Policies that clearly outline the 
appropriate use of school resources. Such policies should illustrate 
unacceptable behavior, including illegal file-sharing, and provide 
details on penalties imposed for failure to abide by such regulations. 
A comprehensive policy, however, is only as useful as it is accessible 
and enforced. Administrations should ensure that students (and others) 
can easily find the policy, including on the school website. As 
discussed further below, administrations must also establish real 
consequences for internet piracy that escalate with repeated violations 
and must enforce the policy so students take it seriously.
     Include substantive educational information on copyright, 
piracy, and illegal file-sharing in orientation materials. Many 
students enter college with a fundamental misunderstanding of copyright 
law that colleges should take the opportunity to correct.
     Inform parents, through letters and at orientation, of the 
seriousness of copyright infringement and the penalties imposed, both 
legally and academically, for violations. Encourage them to discuss the 
risks with their children.
     Require students to pass a quiz about P2P and piracy 
before allowing access to the school's computing network to ensure they 
understand the school's policies.
     Engage students by incorporating discussion of illegal 
file-sharing on school websites and radio stations, and in papers and 
classrooms.
     Launch pervasive and visible anti-piracy campaigns using 
posters, brochures, banners, videos, fliers, etc.
     Send students periodic emails directly from the President/
Provost/Dean to remind students that the school takes copyright 
infringement very seriously and to indicate the seriousness of any 
offense.
    The first step in any educational campaign is to express concisely 
and unequivocally that copyright infringement, through physical or 
online piracy, is illegal and simply wrong. The U.S Supreme Court 
voiced a very clear message to users of the Internet: theft of 
intellectual property is wrong, whether it takes place by stealing a 
physical copy of a movie from a video store or by stealing a movie in 
cyberspace. As Justice Breyer said in his concurring opinion, 
``deliberate unlawful copying is no less an unlawful taking of property 
than garden-variety theft.''
    The MPAA is also working to engage college-aged students in a 
discussion of this topic in a positive and constructive way. This year 
we partnered with Students in Free Enterprise (SIFE) to develop, 
implement, and sponsor a Public Service Announcement contest. 51 
schools participated by conducting anti-piracy campaigns and submitting 
PSAs. To date, 14.4 million people have been exposed to an anti-piracy 
message during the course of the students' campaigns. In addition, 
students and faculty advisors involved in SIFE on 900 campuses 
nationwide had access to the initial information and contest materials, 
raising general awareness of the anti-theft/responsible citizenship 
message.

Enforcement
    As with any education campaign, it is necessary to ensure adherence 
to rules and regulations through consistent and meaningful enforcement 
measures. With internet piracy so rampant on campuses across the 
country, each individual student tends to feel that he or she is 
unlikely to be the one caught. The threat of disciplinary action by a 
student's own school, however, resonates more with students and can 
quickly diminish their sense of ``safety in numbers.''
    We are not suggesting that enforcement is solely the responsibility 
of these institutions. Our industry has brought legal actions against 
numerous companies that promote and profit from copyright infringement, 
such as Grokster. MPAA member companies and RIAA have initiated many 
thousands of lawsuits against individuals, including students, pirating 
content over the internet to help educate the public about copyright 
theft. We have also pursued those using I2Hub, a pirate file trading 
network catering exclusively to university students.
    While the majority of illegal copying and distribution of music and 
movies still occurs over the public Internet on peer-to-peer file-
sharing systems, we have noticed an increasing trend for college and 
university students to use closed networks to illegally exchange 
copyrighted content.
    For example, with I2Hub, this ``darknet'' system used the networks 
of numerous universities to facilitate a closed system of internet 
piracy. I2Hub's extraordinary steps to exclude individuals from outside 
of university networks in order to frustrate enforcement efforts by 
rights holders. These types of closed systems can inflict a great deal 
of damage. For example, we learned that on April 11 at 4:23 p.m. EST, 
there were 7,070 users connected to I2hub sharing 99.21 Terabytes of 
content, enough space for 99,000 movies!
    Additionally, students have been increasingly establishing closed, 
purely intra-campus networks to illegally exchange copyrighted works 
with their fellow students without accessing the internet. They use P2P 
programs like Direct Connect (DC++) and MyTunes to engage in such 
illegal activity on campus Local Area Networks (LANs) without using the 
broader public Internet. These networks are often confined to a single 
dorm and are impossible to detect by anyone outside of the campus 
network. The perceived security and privacy of these campus LANs give 
many students incentive to engage in activity they have otherwise 
learned is illegal and unacceptable.
    The scale and scope of illegal activity within closed campus 
networks is significant and is typically out of the enforcement reach 
of copyright owners.
    I would like to use this forum to appeal to university 
administrators to be particularly aware and vigilant about piracy 
occurring on your campus LANs. The spikes in bandwidth consumption by 
those using LANs to engage in piracy are easily detectable by campus 
network administrators. As with peer-to-peer, the LAN activity 
involving copyrighted works consumes large portions of the campus 
network and thus takes a real toll on network efficiency and integrity. 
I ask administrators to help combat this growing strain of network 
abuse.
    I would like to add that school-wide Acceptable Use policies 
regarding online piracy and the appropriate use of school resources are 
not merely for the benefit of copyright owners. Such rules and 
regulations, just as with those regarding hacking and other violations, 
safeguard the security and integrity of the school's computing system. 
Illegal file-sharing applications and illicit P2P networks threaten 
such systems with increased bandwidth costs, as well as with malicious 
viruses, worms, Trojan horses, and spyware.
    Students should understand that there are extreme repercussions for 
violation of these policies. Accordingly, schools must be diligent in 
learning of such violations and in carrying out appropriate punishment. 
Most schools take a tiered ``three strikes'' approach:
     First offense: Remove the offending user's computer from 
the network until the student complies with any obligations and 
understands the repercussions for further violations. Some schools 
require the student to talk to a University administrator before 
network access is restored.
     Second offense: Students lose network access for a certain 
period of time. Some schools are increasingly imposing monetary fines.
     Third offense: Students usually permanently lose all 
network access privileges and must report to the Dean of Students or 
Judicial Affairs for formal disciplinary proceedings. Some schools have 
suspended or even expelled students for third offenses.
    Of course, enforcement measures vary widely from school to school. 
For example, Harvard University has stated that it will terminate a 
student's network access for one year upon a second offense. Students 
at UCLA will be summoned to the Dean of Students after their second 
offense. In any case, experience has shown that recidivism is rare at 
schools with well-defined and strongly-implemented policies.
    We believe strongly that universities taking these measures will 
significantly reduce the level of illegal activity taking place via 
their networks by students under their charge.
    A final word about campus piracy: imagine a physical structure 
located on a campus that did what many of the bad actor peer-to-peer 
services do. That is, providing an endless supply of stolen goods to 
students. Would a university administration take action to shut that 
site down? Would the members of this Committee expect university 
officials to do so in order to make sure that this illegal activity is 
halted? I suspect the answer to both of these questions is 
``absolutely.'' So I must ask, why are so many schools not taking 
advantage of technologies today to halt this activity when it takes 
place via their networks? There really is no difference. Students do 
not have the right to take copyrighted works without paying for them.
    While I know today's session is devoted to a discussion of college 
campus piracy, I think it is worth noting that the MPAA is also working 
diligently to reach and educate students at the secondary school level 
as well as educating parents of school-aged children. We are working 
with well-respected Internet safety and educational organizations such 
as Weekly Reader, WiredKids and iSafe to raise awareness and 
understanding of this issue to the emerging generation of computer 
users so that, hopefully, when they do arrive on the campuses of this 
nation, they will be better equipped to understand and adhere to the 
rules of the university and the law of this land.
    I thank the Chairman, the Ranking Member and all Members of this 
subcommittee for holding this hearing. I know that if I were to ask 
anyone in this room to name their favorite film, a lively conversation 
would begin. Such is the love of this uniquely American art form and 
all the more reason that we all have a stake in its continued health 
and survival as well as the health of all of the creative industries 
from music to books to software. The stakes are very high, not just for 
those who have the privilege of working within these industries but to 
the overall economy of this great nation.
                                 ______
                                 
    Chairman Keller. Thank you very much, Mr. Glickman.
    Mr. Sherman, you are recognized.

   STATEMENT OF CARY SHERMAN, PRESIDENT, RECORDING INDUSTRY 
                     ASSOCIATION OF AMERICA

    Mr. Sherman. Thank you, Chairman Keller, Mr. Kildee and 
members of the subcommittee. Thanks for the opportunity to 
discuss illegal file sharing on college and university 
campuses.
    This problem has cost the industry billions of dollars and 
thousands of people across the country their jobs, and for many 
creators, the opportunity to pursue a career in music. We 
devoted a great deal of time and energy to this problem over 
the last 4 years for a very simple reason: college students 
remain a very significant part of the illegal file-sharing 
problem.
    Recent surveys indicate that more than half of the nation's 
college students frequently download music and movies 
illegally. Imagine the effect on our industry when one of our 
primary markets decides he would rather steal than pay for our 
products. Now, imagine what happens when those students 
graduate and carry this behavior into the real world.
    We are sincerely grateful to the many schools that have 
worked with us to address this issue proactively and 
constructively. They have led the way, charting a course for 
others to follow. It was a pleasure to hear the remarks of Dr. 
Kirwan and the positive and helpful attitude it reflects. I am 
similarly looking forward to the testimony of Dr. Elzy.
    But unfortunately, there are a far greater number of 
schools who do not understand or simply choose not to 
acknowledge that they share some of the responsibility to help 
solve the problem. We have heard the reasons for inaction: 
academic freedom, privacy, we are not the music industry's 
police. I have no doubt that these are real concerns, but to me 
at least they have begun to sound like excuses.
    We believe in academic freedom, but academic freedom is not 
the freedom to steal. What university would teach its students 
that stealing is OK? But when a school fails to act, it is 
teaching, looking the other way when students engage in illegal 
activity on its networks. It sends a message and it is the 
wrong one.
    The message we are asking of schools is to detect and 
control illegal file sharing already being used by many of them 
to combat viruses or other threats. The products and services 
available for detecting illegal file sharing are no more 
intrusive. We are not asking schools to spy on the contents of 
students' communications. We are simply asking them to use 
available technology to recognize and stop the transmission of 
infringing works.
    Last week's Chronicle of Higher Education contained this 
pullout advertisement from Audible Magic, offering a technology 
that stops infringing transmissions only, without interfering 
in any way with peer-to-peer transmissions of non-infringing 
content. The products are out there. Why are they being used so 
rarely?
    An article in Friday's Washington Post highlighted a 
commercial service that checks students' work for plagiarism. 
The technology is being used in more than 6,000 academic 
institutions in 90 countries. Why shouldn't schools be just as 
proactive when it comes to stopping copyright infringement?
    We do not expect schools to be the music industry's police. 
But when schools claim no obligation to help us, while 
simultaneously refusing anyone else the ability to enforce 
their rights themselves, where does that leave us?
    This is particularly true for activity occurring with a 
school's internal local area network. If schools insisted that 
others deal with it, we will assume responsibility for looking 
for infringers. But schools shouldn't be washing their hands of 
the problem, yet refusing to help us address it ourselves.
    The implicit message we are getting from many university 
administrators is, it is not our problem. I believe this view 
is misguided. It is their problem. Universities are among the 
most significant creators of intellectual capital in this 
country. It is vital to them, to their revenues, to their 
curriculum, to the culture of thought and discovery. If 
intellectual property is disrespected, what does that say about 
the value of the ideas so fundamental to higher education?
    It is their bandwidth that is being abused. And it is their 
system that is being used to serve up content to illegal 
downloaders all over the world. It is their network that is 
being compromised by the introduction of viruses and spyware. 
It is their workforce and infrastructure that has to respond to 
infringement notices and engage in disciplinary proceedings. 
And it is their students who are exposed to viruses, 
compromised data, and yes, the threat of being sued.
    Students at 132 schools have been sued since March 2004 and 
that number will increase under a new university enforcement 
program we will be announcing soon. A recent study found that 
86 percent of managers consider illegal file-sharing attitudes 
and behaviors when making hiring decisions. And nearly one-
third would reject a candidate who had lax attitudes toward 
illegal file sharing in the workplace.
    Are schools doing their students a disservice when they 
fail to prepare them for this reality? We consider universities 
to be our partners on this issue. I want to thank again the 
many administrators that have taken serious steps to address 
the problem. We now ask the many others to join with us, too, 
to recognize that they have an important role to play here and 
to exercise moral leadership.
    Let me also just take the opportunity to thank the 
committee for the provision aimed at reducing illegal 
downloading on college campuses in the Higher Education Act, 
and the subcommittee for its interest in this issue. I hope you 
will continue to encourage all of us to work together and to 
monitor the progress we are making. The attitudes and behaviors 
of future generations will be better for it.
    Thank you.
    [The prepared statement of Mr. Sherman follows:]

 Prepared Statement of Cary H. Sherman, President, Recording Industry 
                      Association of America, Inc.

    Chairman Keller, Ranking Member Kildee, and members of the 
Subcommittee, thank you for inviting me to speak today. As you know, 
the phenomenon of illegal peer-to-peer (``P2P'') file-sharing on 
college and university campuses has received mainstream attention. We 
have worked hard the past few years to address this issue with schools 
and find solutions. This being the Education Committee, I thought I 
would give you a report card on how we're doing.
    The breadth of the problem of illegal file-sharing is clear. The 
ability of millions of computer users around the world to find and 
trade copyrighted works with each other has cost the entertainment 
industry billions of dollars and threatened our ability to succeed in 
the evolving legitimate digital marketplace. Many thousands of people 
across the country have lost their jobs. While we have achieved real 
progress in converting pirate networks into legal services and in 
deterring a sizable number of would-be illegal downloaders, the problem 
of illegal file-sharing remains a serious one.
    And college and university students remain a VERY significant part 
of that problem. Each year, millions of students arrive on campus with 
time, high-speed computing networks, and a new favorite word: ``free.'' 
Recent surveys indicate that MORE THAN HALF of the nation's college 
students frequently download music and movies illegally. Imagine the 
effect on our industry when our primary market decides it would rather 
steal than pay for the product it gets. Now imagine what happens when 
those students graduate and carry this behavior into the real world.
    We have engaged schools across the country to recognize this 
problem and address it effectively. To be sure, we have seen a number 
of positive developments, and we are grateful to the many schools that 
have worked with us to address this issue proactively and 
constructively.
    But, unfortunately, there are a far greater number of schools who 
have done little or nothing at all. We have found that many of them 
resist taking action, or do as little as possible in order to brush off 
further responsibility. This reality is evident in the fact that more 
than half of the students in a recent survey said they weren't even 
sure whether illegal downloads were against their college or 
university's policies.
    We have heard one reason after another to avoid action. ``It 
infringes on academic freedom,'' ``Technological measures to prevent 
piracy would violate privacy,'' ``We aren't the music industry's 
police,'' ``You need to change your business model.'' Maybe these are 
real concerns. But to me at least, they've begun to sound like excuses.
    We believe in academic freedom. But academic freedom is not the 
freedom to steal. Allowing illegal file-sharing is antithetical to any 
educational institution's objective to instill in its students moral 
and legal clarity. Colleges and universities are in the education 
business, preparing young adults to succeed in the world. No 
administration would teach its students that stealing is okay. But when 
a school fails to act, it is teaching. Looking the other way when 
students engage in illegal activity on its system sends a message--and 
it's the wrong one.
    Moreover, the same methods we are asking schools to use to detect 
and control illegal file-sharing are already being used by many of 
them. Administrators regularly check their networks for the existence 
of viruses and other threats. The products and services available for 
detecting illegal file-sharing are no more intrusive. Audible Magic, 
for example, offers a CopySense appliance that eliminates infringing 
transmissions only, without interfering in any way with non-infringing 
P2P transmissions. This product has been available for use for some 
time. Just last week, the Chronicle of Higher Education included a 
pull-out advertisement from Audible Magic explaining the benefits of 
its technology. We are not asking schools to spy on the contents of 
students' communications. We are simply asking them to use available 
technology to recognize and stop the transmission of infringing works. 
The products are out there; why are they being used so rarely?
    We do not expect schools to be the music industry's police. But 
when schools claim no obligation to help us, while simultaneously 
refusing anyone else the ability to enforce their rights themselves, 
where does that leave us? This is particularly true for activity 
occurring within a school's internal network. Illegal file-sharing on 
Local Area Networks, or LANs, is nothing more than piracy rings on a 
school's home turf, and it is unclear why any administration would want 
that kind of activity clogging up its network. An April 2006 letter 
from RIAA and MPAA informed dozens of schools of our awareness of such 
illegal LAN-based activity. We are also aware of ``hacks'' to otherwise 
licensed and legal applications, such as ``myTunes'' and ``ourTunes,'' 
which allow users to acquire songs from others' iTunes collections 
without paying for them. If schools insist that others deal with it, 
we'll assume responsibility for looking for infringers. But schools 
can't have it both ways, washing their hands of the problem, yet 
refusing to help us address it ourselves.
    The entertainment industry has worked hard to change its business 
model to embrace the Internet. Over a few short years, despite numerous 
obstacles, we have managed to establish a vibrant online marketplace 
where students can legitimately acquire the music they desire. But this 
marketplace is continuously challenged by the toleration of illegal 
file-sharing. The fundamental assumption that the availability--and, 
indeed, prevalence--of illegal file-sharing makes it acceptable, and 
that content owners must adapt to accommodate it, is bogus. Claiming 
that ``everyone is doing it'' doesn't fly for plagiarism. Why should it 
for illegal file-sharing?
    The implicit message we get from university administrators is, 
``It's not our problem.'' Some have even said this explicitly. I 
believe this view is shortsighted and misguided. It IS their problem. 
Universities are among the most significant creators of intellectual 
capital in this country. Intellectual property is vital to them--to 
their revenues, to their curriculum, to their culture of thought and 
discovery. If intellectual property is disrespected, what does that say 
about the value of the ideas so fundamental to higher education?
    It's their problem because it's their bandwidth that's being 
abused. It's their system that is being used to serve up content to 
illegal downloaders all over the world. It's their network that is 
being compromised through the introduction of viruses, spyware, and 
other online threats. It's their workforce and infrastructure that is 
being used to respond to infringement notices and engage in 
disciplinary proceedings. Tens of thousands of these notices were sent 
during the past two school years and this year we intend to ramp up the 
program considerably.
    It's their problem because it's THEIR students who are exposed to 
viruses, compromised data, and, yes, the threat of being sued. Students 
at 132 schools have been sued since March 2004, and we recently 
informed hundreds of schools that we would soon be announcing a new 
university enforcement program that will focus on students who ignore 
warnings and continue to engage in illegal file-sharing.
    And what about when students graduate and enter the work force? A 
recent study found that 86% of managers and supervisors consider 
illegal file-sharing attitudes and behaviors when making hiring 
decisions, and nearly a third would ``probably or definitely'' reject a 
candidate who had ``lax attitudes toward illegal file-sharing in the 
workplace.'' Aren't schools doing their students a disservice when they 
fail to prepare them for this reality? Even students themselves 
recognize this missed opportunity. Just last week, an Ithaca College 
editorial complained that the college was merely addressing illegal 
downloading by giving warnings, and thus, ``ignoring the root of the 
problem: that students must understand the legal and ethical problems 
intrinsic in downloading and be prepared for the consequences of file 
sharing beyond the world of judicial referrals.''
    It is time for schools to step up to acknowledge the problem and 
join us in addressing it properly. Of course, there are numerous ways 
in which to do so, which we outline below.

Education
    Education on the value of intellectual property and the problems 
with illegal file-sharing is fundamental for any institution wanting to 
deal with piracy on its campus. Such educational content may appear in 
the form of brochures, flyers, websites, emails and letters from top 
school administrators, lectures, panels, and classes, among others. The 
material should be presented for students and parents at orientation, 
and throughout the student's enrollment. The following are some 
examples of steps schools can take toward educating students about 
illegal file-sharing and copyright infringement generally:
     Institute Acceptable Use Policies that clearly outline the 
appropriate use of school resources. Such policies should illustrate 
unacceptable behavior, including illegal file-sharing, and provide 
details on penalties imposed for failure to abide by such regulations. 
A comprehensive policy, however, is only as useful as it is accessible; 
administrations should conduct surveys or otherwise ensure that 
students (and others) are able to find them, including on the school 
website.
     Include information on copyright, piracy, and illegal 
file-sharing in orientation and other materials.
     Inform parents, through letters and at orientation, of the 
seriousness of copyright infringement and the penalties imposed, both 
legally and academically, for violations. Encourage them to discuss the 
risks with their children.
     Require students to pass a quiz about P2P and piracy 
before allowing access to the school's computing network. This educates 
the student and provides documentation negating any claim of lack of 
awareness.
     Engage students by incorporating discussion of illegal 
file-sharing on school websites and radio stations, and in papers and 
classrooms.
     Launch pervasive and visible anti-piracy campaigns using 
posters, brochures, banners, videos, fliers, etc.
     Send students periodic emails directly from the President/
Provost/Dean to remind students that the school takes copyright 
infringement very seriously and to indicate the seriousness of any 
offense.
    University administrators can also preview and order an informative 
video, designed to help teach students how to stay safe and legal when 
downloading music, by going to www.campusdownloading.com. Four focus 
groups were conducted to test concepts and tone with high school 
seniors prior to developing the materials, and the feedback so far from 
university administrators has been positive.
    While it is indeed beneficial to offer an in-depth look at 
copyright, P2P, and illegal file-sharing, the first step in any 
educational campaign is to express concisely and unequivocally that 
copyright infringement, through physical or online piracy, is illegal 
and simply wrong. Of course, any message conveyed should be short, 
direct, easy to understand, and emphasized repeatedly.
    It should be noted that we are aware that many students arrive at 
college with a firm grasp of how to engage in illegal file-sharing and 
a less-developed understanding of why they shouldn't do it. With this 
in mind, the entertainment community has embarked on several 
initiatives to engage primary and secondary school students and prepare 
them for participation as a responsible adult. For example:
     Music Rules! is a free educational program, developed by 
Learning Works, that informs students in grades 3 through 8 about the 
laws of copyright and the risks of on-line file-sharing, while 
promoting musical and artistic creativity.
     i-SAFE has created a nationwide assembly program on 
intellectual property that includes four cutting-edge videos and on-
line lesson plans. The assemblies and lesson plans are designed to 
foster a greater appreciation for the creative process behind the 
music, teach students how to stay safe and legal when downloading 
music, and highlight the consequences of illegal downloading.
     The Close Up Foundation has developed a supplemental 
textbook to help teachers create a classroom dialogue on issues related 
to the growth of on-line activity, copyright laws, fair use, and the 
impact of piracy and legal alternatives.

Enforcement
    As with any education campaign, it is necessary to ensure adherence 
to rules and regulations through consistent and meaningful enforcement 
measures. The administration should remind students that entertainment 
and other content industries have sought to enforce their copyrights 
through lawsuits against students and other individuals. Students 
clearly are not immune to legal action, yet, there undoubtedly remains 
a feeling by some of ``safety in numbers'' inherent in a nationwide 
campaign. The threat of disciplinary action by schools, however, 
resonates locally and quickly diminishes any sense of security (and 
anonymity) mistakenly felt by students.
    School administrations should understand that school-wide 
Acceptable Use policies regarding online piracy and the appropriate use 
of school resources are not merely for the benefit of copyright owners. 
Such rules and regulations, just as with those regarding hacking and 
other violations, safeguard the security and integrity of the school's 
computing system. The unauthorized use of file-sharing applications and 
P2P networks threaten such systems with increased bandwidth costs, as 
well as with malicious viruses, worms, Trojan horses, and spyware.
    While setting out and implementing a strict enforcement program is 
important, effective technical measures can stop the vast majority of 
piracy before it takes place. This reduces the burden of processing 
potentially dozens of DMCA notices and directly targets the problem of 
student piracy on university networks.

Technological Measures
    In the much-publicized Grokster case last year, the U.S. Supreme 
Court itself stated that ``there is evidence of infringement on a 
gigantic scale'' on P2P systems, and it has been estimated that over 
90% of the use on these systems is infringing. With such a 
disproportionate amount of P2P use going toward illegal purposes (and 
given the threat to network security and individual PCs from viruses 
and other malware), it seems entirely appropriate to restrict the 
illicit use of P2P systems, and to allow use of such applications only 
in justified circumstances.
    Certain universities have chosen to prohibit the use on their 
networks of P2P applications known to be used overwhelmingly for 
illicit purposes. For example, the University of Florida developed 
cGrid (originally called Icarus), a network-based system that is 
flexible enough to provide the whole continuum of remediation options, 
whether through education, selective or complete blocking, track by 
track restriction, etc. The application, which is being commercially 
marketed under the company name Red Lambda, may be fully customized to 
manage adherence to a university's own policies. The cGrid architecture 
supports other capabilities to address the full range of security 
management issues including: viral and worm attacks, spam relays, 
spyware, botnets, and other outbound malicious behavior. All of these 
can have huge effects on the operation and cost efficiencies of the 
university network.
    While exceptions can be made for appropriate use of such 
applications, it is not surprising that the University of Florida has 
received very few requests for permission to use these P2P systems. 
Indeed, it is questionable whether such P2P applications are at all 
necessary (or beneficial) in an academic environment. Faculty and 
students remain able to share and distribute academic material through 
such secure and reliable means as websites, FTP, and email. In 
addition, there are legitimate and licensed P2P networks emerging-such 
as Penn State's LionShare-which are dedicated to, and specially 
configured for, academic environments.
    Some statistics tell the whole story. The University of Florida 
reports that before implementation of cGrid, nearly 90% of the school's 
outbound bandwidth was being used for P2P. After deployment, the school 
experienced an immediate 90% drop in illicit P2P users and has since 
estimated a network and workforce savings of hundreds of thousands of 
dollars.
    Blocking unauthorized P2P applications on campus is the easiest and 
surest way to reduce online piracy on school systems. For those schools 
that do not find the implementation of programs such as cGrid 
appropriate, however, another option is to install a network filtering 
system. Rather than prohibiting all P2P or other applications based on 
a particular protocol, these systems, such as Audible Magic's 
CopySense, filter out just the infringing transmissions, by matching 
them against a master database of copyrighted works. CopySense has been 
implemented at over 60 schools, including such schools as Texas A&M--
Kingsville, Tulane, and Bentley. The technology uses an audio 
fingerprinting technique, providing the university network with the 
ability to identify, filter, and/or block any registered copyrighted 
file, and can find a match over 99% of the time with no false 
positives. While CopySense and similar applications are content-based 
filters, this technology is in fact no more intrusive than technologies 
most schools are already employing to scan for viruses and other 
malware. As a Coppin State IT administrator notes, ``The CopySense 
Applicance acts in a surgical manner, taking copyright infringement out 
of the picture and doing it without interfering with privacy or 
academic freedom.''
    Many schools use a bandwidth shaping tool such as Packeteer. The 
schools that have implemented this approach ratchet down bandwidth 
allowance during the peak hours of the day, then provide increased 
bandwidth at night. While this process may indeed reduce infringement 
to some extent, it unfortunately also can send the message that illegal 
file-sharing is acceptable as long as it's done at night. By 
sanctioning such ``windows of infringement,'' schools do little to 
discourage students from engaging in piracy (and, of course, fail to 
impart a sense of ethical behavior and appropriately prepare their 
students for life after college as moral and law-abiding citizens). In 
addition, given the relative small size of music files, most 
limitations on bandwidth use may still enable the trading of hundreds 
and thousands of copyrighted songs, affording but a limited deterrent 
against illegal file-sharing.
    Of course, the costs associated with implementing any one of these 
technological measures depends on a school's network architecture. 
However, as mentioned above, administrations should keep in mind that 
the cost savings from implementing a technological measure may very 
likely outweigh the expense incurred in implementing them. These 
expenses include reductions in bandwidth utilization, IT 
infrastructure, and responding to DMCA notices.
    I also note here that implementation of a network technology may 
likewise assist in the reduction of infringement on a school's 
intranet, including through illegal file-sharing over LANs and through 
hacks such as myTunes or ourTunes.
    By employing technologies that prohibit unauthorized P2P use on 
campus or, at least, make it harder for students to infringe on such 
systems, schools are laying the groundwork for one more component of a 
proven anti-piracy campaign: the successful implementation of a 
legitimate online service on campus.

Legitimate Online Services
    In a few short years, the number of schools partnering with a 
legitimate service has grown to more than 140. Services such as Cdigix, 
Napster, RealNetworks's Rhapsody, Ruckus, and Yahoo! offer students a 
wide array of entertainment content in a fun, safe, and legal way, and 
help to build a sense of community on campus. Again, any cost savings 
resulting from the partnership may very well outweigh the costs 
associated with failing to provide students an alternative to abusing 
school resources in search of illicit content. While we applaud any 
action that provides students an alternative to illegal file-sharing, 
we note that adoption and sign up rates of legitimate online music and 
movie services by students is often highest when the school has first 
reduced the availability of illegal file-sharing, thus developing the 
thirst for legal content. Services and schools alike have reported 
particularly positive results from this staggered approach. (Experience 
has also shown that it may be unwise to implement both network 
filtering technology and a legitimate online service simultaneously, as 
students tend to blame the online service for the cutoff in illegal 
file-sharing.) Without first addressing the illicit use of P2P systems 
on campus, it is extremely difficult for legitimate services to take 
root. If students have unfettered access to enormous amounts of pirated 
content, no service-regardless of pricing or content offerings-will be 
successful in that environment.
    These and other measures have been highlighted by organizations 
such as the Joint Committee of the Higher Education and Entertainment 
Communities. The Joint Committee was formed in December 2002 to discuss 
and address matters of mutual concern between higher education 
institutions and the content community, including the growth of P2P 
network use on college campuses. Over the past four years, the Joint 
Committee has succeeded in raising awareness about illegal file-sharing 
and has assisted colleges and universities in finding solutions that 
work for them. It issued a report on ``University Policies & 
Practices,'' as well as a white paper on student liability for illegal 
file-sharing on campus.
    The issue of illegal file-sharing has also been taken up by both 
state and federal legislatures. Governor Schwarzenegger in California 
issued an Executive Order in 2004 requiring the State Chief Information 
Officer to develop a statewide policy prohibiting illegal P2P use on 
government computers. The Order requested the University of California 
and the California State University System to comply with the policy. 
Similar Executive Orders have been signed by Texas Governor Rick Perry 
and Illinois Governor Rod Blagojevich, requiring a statewide policy for 
use by each state agency, department, board, and commission which 
prohibits unauthorized or illegal use of P2P software programs. The 
Orders require the appropriate Department to assess the availability 
and cost effectiveness of technologies that can prevent the deleterious 
effects of such P2P applications.
    Reflecting this trend on the national front, the U.S. Senate passed 
a resolution in May 2006, recognizing that ``institutions of higher 
education should adopt policies and educational programs on their 
campuses to help deter and eliminate illicit copyright infringement 
occurring on, and encourage educational uses of, their computer systems 
and networks.''
    We still consider schools to be partners on this issue, and thank 
the number of administrations that have sincerely addressed the 
problem. We now ask the many others to step up to the plate, to 
recognize that they have an important role to play here, and to 
exercise moral leadership. To quote Penn State University President 
Graham Spanier from a Philadelphia Inquirer op-ed piece on file-
sharing, ``Stealing is not among our values.'' Schools may not 
subscribe to that paper, but they certainly subscribe to that view. Now 
is the time to show it.
    Thank you.
                                 ______
                                 
    Chairman Keller. Thank you for your testimony, Mr. Sherman.
    Ms. Elzy, you are recognized.

    STATEMENT OF CHERYL ELZY, DEAN OF UNIVERSITY LIBRARIES, 
                   ILLINOIS STATE UNIVERSITY

    Ms. Elzy. Good morning, Chairman Keller, Congressman 
Kildee, members of the committee. I am Cheryl Elzy, Illinois 
State University's dean of libraries and DMCA agent.
    Thank you for your invitation to appear today to share with 
you our plans to combat illegal piracy on our campus. I will 
briefly describe our Digital Citizen project, outline for you 
why we feel our approach the illegal downloading issue has been 
unique, and share how we feel this committee can help us.
    Illinois State University is a comprehensive institution of 
about 20,000 students and 700 faculty, offering a small-school 
feeling with the opportunities of a large university. Located 
in the great corn desert of middle America, we are a typical 
campus, with great students, great faculty, never enough money 
or space or time.
    Like every other campus across the country, our students, 
faculty and staff are not bad people, but dozens of studies in 
recent years have shown that people on college campuses 
everywhere share digital materials of all kinds. Unfortunately, 
a good deal of it without copyright permission.
    As the DMCA agent, I sometimes get 20 to 30 complaints a 
day. In 2005, I received nearly 500. When we notified students 
of complaints against them, responses ranged from threats to 
tears. A pivotal moment for me personally came when we received 
four subpoenas for information on some of our students who were 
going to be sued for copyright infringements. I think I felt 
the situation more deeply because I myself have a son attending 
Illinois State.
    What would I think or how would I react if this was my 
child? The truth is, I would be raising hell with the 
university for not protecting my son. Why did they let him do 
this? Why wasn't someone watching? We knew we needed to stop 
just reacting, but what could we do to protect our students and 
police ourselves, while still complying with the law?
    A rather simple solution to us seemed to be, why don't we 
just go ask them what they want us to do. Them, in this case, 
was RIAA. So we did. Later, MPAA joined the conversations, 
adding even more scope, depth and encouragement to the 
discussions. The association suggested the metaphor of a three-
legged stool, with a program of policing and enforcement, of a 
legal online media service, and of education.
    What ultimately emerged at Illinois State after 18 months 
of discussions and hard work is more of a six-legged bench, as 
we added three more legs to give the program more foundation 
and strength. Education expanded and actually rose to the top 
of the list, and enforcement evolved. The idea of one legal 
media service grew to incorporating five legal sources of media 
covering all portable player platforms.
    Beyond that, Illinois State University's Digital Citizen 
project includes components tackling easier and more definitive 
guidance on educational fair use in classrooms, coupled with 
easier avenues to copyright permissions, development of 
teachable moments on copyright, and legal use of media for the 
K-12 audience. Knowing that a carrot is nearly always more 
effective than a stick in getting attention, we are exploring a 
system of rewards for those who participate.
    We are envisioning a program of legal downloading services 
that we are calling Bird Trax, a name derived from Illinois 
State's athletics team name, the Redbirds. Participants and 
nonparticipants alike will be subject to the self-monitoring 
and enforcement of copyright protections as we continually work 
to eliminate all known avenues for illegal downloads.
    We won't be able to capture every incident, but we hope to 
identify most and by offering an opt-in program, if the network 
user is not someone who downloads, he or she doesn't have to 
participate. However, if the user tries to download a 
signatured electronic file, the activity will be stopped.
    Managing copyright complaints is costing college campuses 
tens of thousands of dollars each year, perhaps more in staff 
costs and infrastructure. But Bird Trax won't be financed by 
tuition or student fees, nor will it be free. In today's market 
economy, we feel users need to be conditioned to pay for what 
they use, so there will be charges attached to joining the 
program. Digital Citizen's revenue stream will come from modest 
participation charges.
    Our hope is that Illinois State is to serve as a kind of 
Consumers Report on the digital media scene, testing, reviewing 
and implementing new services as they emerge in the market, 
while serving as a resource to colleges and universities on the 
education side of the equation. We absolutely know we very well 
may prove what does not work, as much as what does.
    We are working productively and positively with so many 
agencies, associations and vendors who are engaged in this 
sometimes contentious area, something we have learned is unique 
to ISU. In addition to our RIAA and MPAA, we are working with 
Educause and the American Council on Education, and with some 
of the leading vendors in this field, such as Audible Magic, 
Red Lambda, Ruckus, Cdigix, Pass Along Networks, XM 
Satellite+Napster, and Apple. We have been both embraced and 
ignored by some of the best and biggest in the industry.
    In conclusion, as we prepare for the full launch of our 
Digital Citizen project later this fall, we know we have far to 
go. Illegal downloading of music, videos, movies and games is a 
symptom. It is not the problem, nor is technology the answer. 
The problem is changing behavior, almost changing a culture.
    To that end, Illinois State can have a significant impact 
on peer-to-peer behaviors in another more important way. Our 
teacher education grads number in the top five in the nation. 
Almost 1,000 new teachers walk out our door each year, and each 
teacher will influence the lives of at least 20 to 30 students 
each year. If our graduates can learn good digital behaviors 
while on campus, they will imprint that ethical and legal 
perspective on perhaps 20,000 children annually.
    ISU's Digital Citizen program can be the pedal in the pond, 
with its impact having a dramatic ripple effect in classrooms 
around the state and the nation. That is not to say that 
Illinois State has all the answers. We certainly do not. We 
know that there is no one-size-fits-all solution for colleges 
and universities.
    The long-term goal of ISU's Digital Citizen project is to 
create a nationally recognized program that is cost effective, 
based on comparison and research of the products available, and 
replicable on other college campuses. If a central place for 
education, conversation, trial and admittedly error can get a 
foothold, then everyone benefits.
    Chairman Keller. Ms. Elzy, let me get you to wrap up there 
because we are a couple of minutes overtime. OK?
    Ms. Elzy. Your committee can help us in at least four ways. 
Your assistance in providing for funding for the kind of 
practical research and open-book results we suggest can be 
dramatic. Your help is essential in emphasizing development of 
even more practical materials for the K-12 classrooms.
    Your support is crucial in insisting that the entertainment 
industry and higher education associations join us in a 
national conversation on and understanding of practical fair 
use and copyright permissions for libraries and classrooms. And 
finally, your programmatic and financial support for 
comprehensive efforts like the Digital Citizen program will be 
invaluable.
    Thank you very much.
    [The prepared statement of Ms. Elzy follows:]

   Prepared Statement of Prof. Cheryl Asper Elzy, Dean of University 
    Libraries and Federal Copyright Agent, Illinois State University

    Chairman Keller, Congressman Kildee, and Members of the Committee: 
Good morning. I am Cheryl Elzy, Illinois State University's Dean of 
University Libraries and our designated agent for notification of 
claims of infringement under Section 512(c) of the Copyright Act. In 
other words, I am the DMCA agent on campus. Thank you for the 
invitation to appear today to share with you Illinois State 
University's plans to address peer-to-peer downloading on our campus 
network by students, faculty, and staff. The overall project has come 
to be known in our discussions with various groups and internally as 
the Digital Citizen Project. I'm using this opportunity to testify 
today to tell you Illinois State's story of how this program evolved 
and what it involves.
    After listening to the introductions of my illustrious and powerful 
colleagues here at the table today and then inevitably comparing my 
somewhat different set of credentials with theirs, you may inevitably 
be asking yourself why I am here. I have asked myself that very 
question many times over the last several days, actually. But why a 
librarian? Why not a Chief Information Officer or some other technology 
expert? Why is a librarian the campus DMCA agent? To us at Illinois 
State University the answers to all those questions make perfect sense. 
The four project leaders for Illinois State's Digital Citizen Project 
represent diverse perspectives. We have an academic CIO, a student 
technology director, a library dean, and a nationally known technology 
consultant. My operation interprets literally dozens of copyright 
questions almost daily. Copyright expertise on my campus, and on a lot 
of campuses across the country, is most intensively developed in the 
library. While copyright protects intellectual property, it is my 
library's job to put that property, that information, into the hands of 
the students, teachers, researchers, and casual readers who need it. 
Technology is only a means to an end in a whole lot of ways. Illegal 
peer-to-peer downloading is NOT a technology problem. It doesn't have a 
``technology'' solution. It is about legal access to materials or 
information resources. It is connecting users with the right tools. It 
is education and changing behaviors. How we do that is what we have 
been exploring for the past eighteen months and will describe for you 
today.
Illinois State University as an Institution
    Illinois State University is an institution of 20,261 students with 
17,842 of those being undergraduates. The first public university in 
Illinois, Illinois State University was founded in 1857 as a teacher 
education institution, a tradition still very much in evidence today as 
Illinois State is among the top five producers of classrooms teachers 
in the nation and has more alumni teaching in classrooms today than any 
other university in the country. Our institution is a comprehensive 
University offering more than 160 major/minor options in six colleges 
delivered by around 700 outstanding faculty.
    We embrace as our core values individualized attention to the 
unique educational needs and potential of each student placing the 
learner at the center of our teaching and research; public opportunity 
for an accessible, affordable education through high-quality programs, 
faculty, facilities, and technology; active pursuit of learning inside 
and outside the classroom; diversity underpinning a sense of community 
and an informed respect for differences among our faculty, students, 
and staff; and creative response to change through innovation in 
curriculum, pedagogy, research, creative activities, and public 
service. Students benefit from ``the small-school feeling they get from 
this large university, and the incredible opportunities they 
encounter.'' (Yale Daily News Insider's Guide to Colleges, 2000)
    Located in central Illinois about 100 miles south of Chicago, we 
attract first-generation college students; urban students who want to 
get away from home, but not too far; and downstate learners from large 
and small communities. As you might expect in the heart of farm 
country, the farm boys from the ag fraternity empty out on fall harvest 
weekends to help in the fields. Statewide and Chicago loyalties dictate 
that the halls across campus are bare when the Bears are on TV. Our 
football team is currently ranked Number 6 nationally in I-AA, and our 
student scholars are winning national awards for physics, actuarial 
science, civic engagement, and much more. We enjoy the highest 
retention rate in our history, along with the highest incoming GPA's 
and ACT scores. There is a lot of construction going on across campus 
that we both celebrate and suffer through. The campus has been selected 
as one of just eight universities nationwide to implement a student-
centered political engagement initiative under the American Democracy 
Project sponsored by the American Association of State Colleges and 
Universities. Despite continuing and severe budget problems, times are 
good at Illinois State University. We are proud that Illinois State's 
fortunes and reputation are on the rise with ambitious goals and 
accomplishments at the state, national, and international level.
Getting at the Problem
    The point I want to make here is that we are a typical campus: 
great students, great faculty, never enough money or space or time. 
That's just exactly what virtually every other representative of every 
other campus would tell you. Our faculty teach, research, innovate, and 
share experiences. Our students like to do typical things: interact 
with professors they admire, volunteer for a lot of service projects, 
try to avoid studying whenever possible, once in a while maybe party a 
little too much, and, of course, listen to music and watch movies and 
videos. All in all, we have a terrific faculty, staff, and students.
    Which brings us to the point of why you've asked me here today. 
Like every other campus across the country, our students, our faculty 
and staff, are not certainly bad. They don't carry off armloads of CD's 
from the local music store. They aren't ripping through Blockbuster 
with dozens of movies under their jackets. But dozens of studies in 
recent years have shown time and again that college students everywhere 
share music, a good deal of it without copyright permission. Add to 
that movies, videos, and television programs. And games. And software. 
There are some teachers on campuses everywhere bootlegging home copies 
of media to use in classrooms. Yes, I'm making some sweeping 
generalizations here, but you understand my point. Why would good 
people do such a thing? What leads them to think this is okay when it's 
not? Ethically, financially, legally or morally.
    My own simple answer, in part, is that the technology today makes 
it easy. But perhaps a more accurate answer is that, for the most part, 
they don't really know any better or don't care. All their friends and 
colleagues do it. They think it's not hurting anyone really. It's 
anonymous, quick, direct, and easy. To put this very, very 
simplistically, ``it's just once, just one copy.'' And then another and 
another. But there is no one easy solution, no shrink-wrap fix that 
will make this problem or the DMCA complaints go away. The solution to 
this overwhelming and all-pervasive problem lies in education coupled 
with enforcement of existing laws and direct avenues to legal ways of 
getting the tunes, the tracks, the games, and the videos that are an 
integral part of today's student and faculty lives.
    We all know, or at least suspect, the scope of the problem. It's 
national. It's worldwide. It's bigger than we'd first imagined and a 
significant problem, we think, for higher education. Frankly it's a 
problem at all levels of education, including K-12. You've been 
provided lots of numbers from lots of sources and from practically 
every perspective. You don't need me to add to your information 
overload. You know there is a problem with students, and in some 
respects, faculty and staff, downloading media for which they have not 
paid. My purpose here today is not to talk about the global landscape 
or the national picture. I'm here to share what one university in the 
great corn desert of Middle America is trying to do to address not just 
the problem of illegal downloading, but its comprehensive root cause.
    That is not to say that Illinois State has all the answers. We 
certainly do not. We don't know what works because, after eighteen 
months of difficult and time-consuming work, we are only just publicly 
launching the Digital Citizen Project. We don't have a lot of results 
to report yet because we're just gearing up. But working with the 
associations represented here today [the Recording Industry Association 
of America and the Motion Picture Association of America], consulting 
with leading professional associations like EDUCAUSE and the American 
Council on Education, and finally collaborating with the nation's 
principal network monitoring developers as well as legal music and 
video source corporations [Audible Magic, Red Lambda, Apple, Cdigix, 
Ruckus, Pass Along Networks, and XM Satellite Radio+Napster], we have 
designed what we feel is a comprehensive program to address downloading 
issues. We've even gone beyond our own campus to invite an academic 
colleague, Dr. Samuel C. McQuade III from the Rochester Institute of 
Technology and a nationally recognized expert on cyber crime, to join 
our research and investigative team later this fall to explore the 
social and psychological aspects of illegal downloading and compare 
results from our two institutions.
    More about the Digital Citizen Project in a bit, though. Let's back 
up to how we started eighteen months ago.
The Background of Illinois State's Digital Citzen Project
    As the University's DMCA agent, I'm the one who formally receives 
any copyright complaints filed by individuals, associations, or 
corporations. Like any good administrator, I delegate. I have a group 
of exceptional colleagues who do the actual work of managing the 
complaints: network engineers, appropriate use coordinators, paralegals 
in the student judicial office, copyright experts within the library. 
But it's my name out in front.
    As the DMCA agent and as a librarian whose core mission is to 
provide access to information and materials my university community 
needs, I became increasingly dismayed a couple of years ago as the 
number of copyright complaints began increasing dramatically. In 2001, 
2002, and 2003 we received a few scattered complaints throughout the 
year, but nothing particularly overwhelming. By 2004 Illinois State was 
seeing a little more DMCA activity, but in 2005 everything just seemed 
to explode across our screens. Sometimes there were days when we were 
getting 20 or 30 notices a day, several days a week, primarily from 
entertainment industry associations. In the fiscal year ending in June 
2005, Illinois State University had received 477 formal DMCA complaints 
from the Business Software Alliance, the Entertainment Software 
Association, Sony, Fox, NBC, HBO, MPAA, and RIAA. The problems on 
campus were stemming from activity in the residence halls, Greek 
houses, other places on campus, and dial-up access. We even had the 
dubious distinction of managing complaints against our university's 
Office of Advancement, the Rec Center, and even some of our own 
technology operations that were hijacked by outside programs due to 
some worm-infected machines. Staff time to manage these increased 
exponentially. Our student judicial office saw much heavier traffic 
referred to them for discipline. Follow-ups and tracking seemed to take 
forever.
    When we followed DMCA procedures and contacted users about their 
illegal files, responses from students ranged from tears to threats. 
Most students complied quickly when contacted. A few had complaints 
filed on materials that they actually owned legally. A few more shot 
back that ``you can't look at my stuff'', demonstrating a quaint 
naivete about what can and can't be tracked on the Internet. ``My 
brother's a lawyer, and he'll sue you'' was another memorable response. 
A common come-back, and a somewhat concerning one frankly, was ``I 
didn't know I had anything like this on my machine, honest.'' Did they 
really not know? The tears and fears about how to clean up their 
computers really hit us hard. It was frustrating that we could not 
respond to the students who begged us to ``scan my machine to make sure 
I'm okay.'' Since we did not know how the complainants' search engines 
navigated our user files, we couldn't replicate that kind of search. We 
couldn't help our own users. Literally.
    Naturally we began asking questions among those working in the 
appropriate use areas on campus. Why the sudden rise in numbers? Were 
our students doing more illegal downloading or were they just getting 
caught? Were we somehow targets of new enforcement campaigns? Why the 
rise at universities when the problem is so much more widespread? What 
was all this costing us? How much costly technological bandwidth was 
this taking besides the obvious investment in staff? How could we 
possibly be satisfied with simply reacting, instead of being proactive 
on the part of our students?
    The pivotal moment for me personally came when we received four 
subpoenas for information on some of our Illinois State University 
students who were going to be sued in federal courts for copyright 
infringements. At that moment my campus was faced with decisions with 
no options particularly attractive. Do we comply (as other campuses 
had) or do we fight release of the information (as still other campuses 
had)? Do we warn the students about the subpoenas or do we stand aside? 
I think I felt this whole situation more deeply because I myself have a 
son attending Illinois State. What would I think or how would I react 
if this was my child? The truth is I'd be raising hell with the 
University for not protecting my son! Why did they let him do this? Why 
did they make it possible for him to get into this mess? Why didn't 
they block this kind of thing? Why wasn't someone watching?
    The university complied with the subpoenas and provided the 
information. Then we stepped back to think and to plan. David 
Greenfield, who directs ISU's Student Technology Support Services and 
is the University's appropriate use coordinator, and I sat down with 
our technology consultant, Warren Arbogast of Boulder Management Group, 
to talk about how we could make this problem stop. What could we do to 
protect our students while still complying with the law? How could we 
educate and direct our students? What could we do to police ourselves?
    The rather simple solution seemed to be, literally and in the exact 
words I used back in February a year ago, ``Why don't we go ask them 
what they want us to do?'' ``Them'' in this case was the Recording 
Industry Association of America. So we did.
    Our consultant, who is based here in Washington, DC, went to the 
RIAA offices on DuPont Circle to pose our question. The fascinating 
thing looking back is that, initially, he was met with momentary 
silence. It certainly was not that RIAA didn't have any answers. It was 
just that no one had asked them the question out of the blue before. 
Indeed no institution had come directly to them unsolicited before. The 
great news is, though, that RIAA was willing to talk. A terrific and 
productive dialogue began almost immediately. That was the beginning of 
a great collaboration 18 months ago.
    In the beginning phases of what came to be this Digital Citizen 
project, being trained scholars and researchers, we scanned the 
literature and technology landscape for what other institutions were 
doing to combat illegal downloading and reduce DMCA complaints. As 
complex and diverse as our institutions of higher education are across 
the country today, we expected that the approaches to the peer-to-peer 
file-sharing issues would be, and continue to be, equally complex and 
diverse. We were right. Today more and more colleges and universities 
are taking significant steps to tackle the illegal downloading issues. 
But judging by what we could find in the professional literature 
eighteen months ago, the answer appeared to be: not much. We knew 
anecdotally that some institutions were actually throwing the 
complaints away. A number of institutions were delivering educational 
or public service campaigns, often with a unique local twist. There 
were a few that were putting up a single legal music or movie service 
and hoping students, in particular, would be attracted to it. Recently, 
Drexel University put up two legal music services rather than just one, 
offering both iTunes and Napster to their campus community. A few other 
universities simply shut down all bandwidth available for peer-to-peer 
activities of any kind, legal or not. Some reported limiting the amount 
of bandwidth available to peer-to-peer applications. All of these 
programs reported little or varying degrees of success. From our 
perspective, most universities and colleges seemed to be waiting for 
someone to prove to them that the problem was real and needed 
attention. Others were waiting for ``the'' solution.
Illinois State University's Digital Citizen Program
    Back to the ``what do they want us to do'' question, though. Our 
colleagues at RIAA did ultimately provide us an answer. Their ideal 
program to address downloading was described as a ``three-legged 
stool''. Each leg requires the other to be successful, to be balanced. 
Those three legs were policing and enforcement of the network, 
providing legal options for digital media, and education. That's 
actually a very easy concept to grasp when described that way. But as 
our conversations continued over the ensuing months, with the Illinois 
State Digital Citizen Project leaders coming to Washington, DC for 
extensive meetings hosted by RIAA, and with several members of the RIAA 
executive staff coming to Illinois State's campus for day-long meetings 
with a variety of campus constituents serving on an advisory team, the 
three-legged stool evolved into something more closely resembling a 
six-legged bench.
    This new concept incorporated the education, enforcement, and legal 
services aspects from early discussions, but subtle changes were 
emerging. Education was now first, not last. That was important to us 
as educators. Added to the mix were some unusual new features, some 
additional ``legs''. Near and dear to me as a librarian first and above 
all was a more clear definition of fair use of media in the classroom 
along with easier paths for copyright clearance of media we needed to 
use. We felt that faculty needed to model appropriate, legal behavior 
for their students, so we needed to make legal fair use as easy as 
possible. Further, all of us working on the Digital Citizen Project 
knew absolutely that downloading behaviors start much earlier than when 
a student arrives on a college campus. Their behaviors are learned in 
high school or before, at home, at school, and at play. K-12 education 
needed to be addressed. Finally, to entice students to a comprehensive 
program of legal, ethical online behavior it would be extremely 
desirable to be able to offer some sort of rewards for those who 
participated. So we ended up with our six-legged bench: education/
public relations, institutional self monitoring and enforcement, an 
array of downloading services that are legal rather than only one, a 
curriculum of K-12 teachable moments at point of need, establishing 
legal/fair use in the classroom and beyond, and possible rewards for 
students participating as good digital citizens.
    Overall, the long-term goal of ISU's Digital Citizen Project is to 
create a nationally recognized program that could be cost-effective, 
that is based on comparison and research of the products currently 
available, and that is replicable on other college campuses. We are far 
from there, but we're laying a solid foundation. And we absolutely know 
that there is no one-size-fits-all institutional solution. Not at all. 
But if a central place for education, conversation, trial, and 
admittedly error can get a foothold, then all of higher education 
benefits.
    The education ``leg'' of the bench: In tackling the ``leg'' on 
education and public relations, we worked to build on some programs we 
already had in place. Illinois State has always offered technology 
orientation and educational programs for students, especially those new 
to campus. In the past few years, more time and attention has been 
placed on the ethics and practices of downloading. In Fall 2005, we 
supplemented campus-developed material with videos supplied by RIAA of 
``named'' artists speaking on the subject. For Fall 2006, we utilized 
the new www.campusdownloading.com material including a segment of the 
video along with live student testimonies, as well as online and 
clicker-based surveys and educational modules. For a different 
perspective, our technology staff also used the new video material with 
technology student workers in a focus group setting. Future educational 
efforts will include spreading the message through library information 
literacy instruction and will be reinforced in the university's Tech 
Passport program. We will explore ads and public service announcements 
in student-targeted publications, web sites, campus TV and radio 
stations, and beyond. Eventually point-of-use software with educational 
modules on the ethics of Internet behavior will be utilized.
    The self-monitoring and enforcement ``leg'' of the bench: Illinois 
State's network engineers are in the last phases of testing newly 
developed commercial monitoring and enforcement software that will be 
managed and operated by campus personnel for our campus community. This 
monitoring software tracks the content of peer-to-peer file transfers 
as it enters or leaves the campus network from the Internet. The 
monitoring software is designed to stop downloading of copyrighted 
material while educating the user. This reinforces institutional 
policies that prohibit all types of illegal behaviors on our campus 
network, including illegal downloads. The software will scan network 
traffic automatically for the electronic signatures of copyrighted 
material and interrupt a network user's online transaction if it is 
suspected that the activity is illegal. It is very important to note 
that the software only scans against databases of known copyrighted 
materials. Those databases are very small right now, relatively 
speaking. Very, very early indications are that only about half of 
Illinois State's peer-to-peer traffic even has an electronic signature 
right now. Back to the user, though. He or she will be directed to 
legal avenues of downloading the desired item. The monitoring software 
also provides a bit of education and the promise of penalties if the 
user attempts further illegal downloads. The activity does not involve 
``reading'' a user's email. It is simply a scan of network traffic that 
blocks files identified as copyrighted, just as we scan and block 
network traffic identified as containing viruses.
    The legal downloading services ``leg'' of the bench: ISU's Digital 
Citizen Program will offer a menu of legal downloading services 
offering music, movies, and other media at reduced costs covering the 
spectrum of portable devices options rather than supporting just one 
make, model, or manufacture. This provides the research opportunity to 
compare and contrast services, provide feedback to vendors on desired 
or needed improvements in what they offer, and track how users are 
attracted to various services through the purest form of evaluation: 
their business. Providing more than one platform also eliminates the 
excuse that a user's MP3 player doesn't work with whatever service is 
offered.
    We're envisioning a program of legal downloading services that we 
are calling ``Bird Trax'', a name derived from our Illinois State 
athletic teams' name, the Redbirds. Students, faculty and staff may 
elect to opt into this legal option for downloading. It's important to 
remember that all participants and non-participants will be subject to 
the monitoring and enforcement of copyright protections. There won't be 
an avenue on the Illinois State network for illegal downloads. We may 
not be able to capture every incident, but we should identify most. By 
offering an opt-in program, if the network user is not someone who 
downloads, they don't have to participate. However, if a user tries to 
download a signatured electronic file, the activity will be stopped.
    Bird Trax won't be financed by tuition or student fees. It won't be 
free, either. In today's market economy we feel users need to be 
conditioned to pay for what they use, so there will be charges attached 
to participation. The program's revenue stream will come from modest 
participation charges. We're modeling this on our school's athletic 
participation card program where students purchase a card to enter any 
number and types of athletic events. Students participating in the Bird 
Trax program will have access to the legal downloading services we're 
providing if they choose.
    The K-12 education ``leg'' of the bench: Education, as said 
earlier, must start before students get to a college campus. However, 
asking any K-12 teacher to ``teach'' yet another course in their 
already full days won't work in our opinions. As an alternative, 
Illinois State University would like to capitalize on its nationally 
recognized College of Education and its K-12 lab schools on site to 
develop and test a K-12 curriculum with perhaps 50 or so ``teachable 
moments'' or learning modules to be utilized at the point of use. These 
might start the educational process on cyber ethics as early as 3rd or 
4th grade. A teacher could incorporate a teaching moment or module on 
legal downloads of images, for example, when instructing young people 
on how to create Power Point presentations or slides.
    The fair use ``leg'' of the bench: Similarly, teachers and 
professors need to model appropriate legal and ethical behavior. 
Current guidelines on educational fair use for media are unclear and 
hard to apply. While some in the higher education community like the 
vagueness and benefit from it because it leaves room for 
interpretation, others of us who work on the front lines really want 
some more specific guidance. Copyright permissions are very difficult 
to acquire. A classic concrete example emerged in the course of this 
project. Illinois State wanted to use some music video footage in one 
of its orientation programs in Fall 2005. We asked for a little help 
from our colleagues at RIAA, beginning the permission process in early 
April. We still could not secure permissions in August five months 
later, even with help from the very association that promotes legal use 
of media. If they can't get permissions in a timely fashion, then who 
can?
    We have to make copyright permissions for in-class and academic use 
of pre-recorded music, movies, and television programs easier and 
faster. Ironically, this very issue came up here in the House Judiciary 
Committee last week as reported in CQ Today (September 20, 2006, page 
15). There is or was a bill pending that would make copyright 
permissions easier to acquire for the digital music services. The bill 
(HR 6052) would ``simplify the complex royalty system for the licensing 
of digital music, including music delivered over the Internet and via 
satellite radio.'' Can we not find a way to extend that simplification 
to libraries and educational institutions?
    The rewards ``leg'' of the bench: To reward participants and 
encourage more participation in the program, Bird Trax hopes to offer 
incentives, rewards, carrots versus sticks, or whatever will work to 
keep them legal. While the dream might be to provide incentives such as 
free concerts, major movie premieres, workshops with noted artists, 
actors, and performers, or similar high-visibility events for those 
participants who have stayed legal through the year or the life of the 
program, more realistically we should at least be able to offer some 
free downloads, reduced subscriptions, or an array of vendor-related 
give-aways.
The Early Data
    It is important to remember that we are only just beginning the 
research side of the Digital Citizen Project.
    Downloading is a complex issue. Universities are complex 
operations. Deciphering technology is an extraordinary undertaking. 
Research is a complex task. To be effective, the Digital Citizen 
Project must be comprehensive. So the entire spectrum of what we're 
looking becomes exponentially complex.
    In August 2005 we were able to test some monitoring systems that 
were just beginning to appear on the market. Using new monitoring 
hardware and software from Audible Magic for a short trial, we 
benchmarked a 17-day period in mid-August 2005 capturing a revealing 
snapshot of activity on our network. While this may seem like an odd 
time to collect data since the fall term was just starting, it was the 
point at which our partner company provided the program to capture the 
snapshot. Of the 13,000 computers on our network, only 26% used a peer-
to-peer application, legal or illegal. That is a little less than 3,400 
machines, a figure that is lower than any of us had expected. Of that 
figure, 97% of the traffic originated in the residence halls, 
indicating that we may be able to concentrate our educational efforts 
on those groups.
    In April and August 2006 we performed studies similar to those of 
August 2005. In addition to trend information on network activity, 
bandwidth usage, electronic signatures, and content, these studies have 
also begun to yield some new data about darknets, which are peer-to-
peer networks whose traffic remains on campus.
    We also took the opportunity this summer to survey high school 
seniors who were coming to campus to register for classes at ISU. 
Notice, please, I'm not calling them college freshmen, but rather high 
school seniors. Their attitudes and behaviors had been established 
before any exposure to our campus. We probed their use of digital media 
and what kind of mobile players they used. Of the 217 responding 
students, 89% reported they had a portable music player. 67% of those 
devices are Apple iPods with the rest scattered among 26 different 
kinds of players. 93% played music and 51% watched movies/TV/videos 
from their computers. When asked how these incoming students acquired 
their music and movies, the responses demonstrated an extreme range of 
sources from actually buying CDs to commercial services like iTunes. 
Various P2P networks such as Limewire, Bearshare, and Bit Torrent were 
mentioned by 39% of the seniors. While not testing the legal vs. 
illegal use of these networks, the naivete we've seen elsewhere shown 
through as we found comments such as ``Not legally'', ``pirate from 
XXXX'' or ``illegally downloaded''. To us, this absolutely shows that 
our new students come with habits entrenched in a digital lifestyle. 
That is why the K-12 component of our program is so essential to any 
effort that seriously, and effectively, addresses illegal downloading 
activities in America's higher education community.
    We quite honestly have mountains of data to analyze before we even 
formally start the Digital Citizen Project. We anticipate sharing some 
of our early findings at the upcoming EDUCAUSE national conference in 
Dallas on October 10. We would very much like to have had the data 
available and ready for today's hearing, but our time grew too short 
for an accurate, understandable review of the results. And it is 
obvious that we will accumulate far more hard data. We hope to soon 
hire research assistants to help us analyze the massive amounts of 
information we have if we can secure some outside funding. But, because 
our discs full of data promise to grow significantly with each passing 
day, analysis and management becomes part of the problem of running 
this project, which means finding enough staff time and personnel 
dollars to correctly run and research our results.
What's Unusual About ISU's Digital Citizen Project?
    The multi-faceted, comprehensive approach that Illinois State 
University is taking to address illegal peer-to-peer sets it apart from 
most, if not all the campus programs that we're aware of. Because 
Illinois State is a national leader in the education field, it is 
natural and appropriate that we tackle the difficult and far-ranging 
challenges presented by K-12 cyber education. We know many agencies and 
institutions are creating programs of many kinds for the K-12 
classroom. Illinois State would like to review, test, and compare all 
of those in our lab schools and professional development schools, 
offering advice and expertise to those interested in implementing such 
programs. Pursuing the point-of-need teachable moments is a different 
and appealing approach that we also want to develop.
    Beyond the program itself, though, is the truly unique fact that we 
are working productively and positively with so many agencies, 
associations, and vendors who are engaged in this sometimes contentious 
area. To work closely with RIAA, seen by many campuses as almost the 
``enemy'', has been a surprising and welcome endeavor. Adding the voice 
of MPAA to the Digital Citizen Project has provided still more 
encouragement, expertise, and direction.
    Long-range, our hope at Illinois State is that we really will serve 
as a kind of ``consumer's reports'' on the digital media scene, 
testing, reviewing, and implementing new services as they emerge in the 
market while serving as a resource to higher education on the education 
side of this equation. We absolutely know that we very well may provide 
evidence of what DOES NOT work as much as what does. Illegal 
downloading may need far more effort and much broader approaches than 
we can bring to bear on the problem as a single institution, a single 
university.
    Working with vendors to secure participation in our ``consumer's 
report'' approach to the downloading arena has had its challenges and 
successes. Convincing most of the vendors that they won't be the ONLY 
service or software at Illinois State University has been challenging, 
but it was something we needed to do for the integrity of the Digital 
Citizen Project and its research goals. At one extreme, our project and 
our expertise has been so valued that we are working in complete 
partnership to develop new modules and releases of one service. At the 
other end of the spectrum, we have been completely ignored in our 
repeated attempts to bring one of the leaders in the downloading field 
into our project. Some vendors who really want to be a part of ISU's 
Digital Citizen Project and Bird Trax just aren't ready for complete 
implementation and roll-out yet, so we hope to include those in Phase 
II of the research and offerings.
Conclusion
    As we prepare for full launch of our Digital Citizen Project and 
Bird Trax later this fall, we know we've come a long way and have far 
to go. We have the attention of the major entertainment associations, 
many vendors, satellite radio, the higher education professional 
associations, and even some studios. The entertainment industry is very 
supportive of the monitoring and enforcement side as well as our trials 
of service providers. The educational and public relations aspects are 
not quite as attractive to them yet, nor is the need for effective K-12 
teaching resources. But perhaps with your help and encouragement, we 
will get there.
    Downloading music, movies, and games is a symptom, an outcome. It 
is not THE problem. The problem is changing behavior, almost changing a 
culture. The media industry needs to change its business model because 
peer-to-peer isn't going to go away. Higher education, and education in 
general, needs to adapt to this all-pervasive change in student desires 
for mobile music, movies, and entertainment. It's a part of their 
lives. That will take time, education, and constant reinforcement for 
years to come. Getting teachers to use all intellectual properties 
legally is an important signal. Getting young people, not to mention 
their older fringe hippie wannabee counterparts, to use music and 
movies legally is the core goal.
    Illinois State University can have a significant impact on peer-to-
peer behaviors in another, more subtle way. As was said very early in 
this paper, Illinois State's teacher education graduates number in the 
top five in the nation. 800 new teachers walk out our doors each year, 
and each teacher will influence the lives of 20-30 children each year. 
If Illinois State's graduates can learn good Digital Citizen behaviors 
while on campus, they will imprint that legal and ethical perspective 
on perhaps 20,000 children annually. ISU's program can be the pebble in 
the pond with its impact having a dramatic ripple effect in classrooms 
around the state and nation.
    Your help is essential to directing the conversations toward 
education starting with the nation's very young, and your support for a 
national conversation on practical fair use and copyright permissions, 
can point the way to creating great role models. Your support for 
comprehensive efforts like our Digital Citizen Project, with funding 
and with using us as a resource for higher education in general, will 
be invaluable.
    For more information visit www.digitalcitizen.ilstu.edu.
                                 ______
                                 
    Chairman Keller. Thank you, Ms. Elzy.
    Dr. Fisher, you are recognized.

 STATEMENT OF WILLIAM W. FISHER, DIRECTOR, THE BERKMAN CENTER 
          FOR INTERNET AND SOCIETY, HARVARD LAW SCHOOL

    Mr. Fisher. I would like first to thank Representative 
Keller and Representative Kildee for holding this hearing and 
for providing me the opportunity to appear. The problem of 
unauthorized file sharing on university campuses is important 
and difficult, and I am grateful for the chance to participate 
in your deliberations.
    Everyone here agrees that the downloading of copyrighted 
audio and video recordings by college students is common and 
that it contributes to the current crisis in the recording 
industry and to the potential for a crisis in the film 
industry. The question before you is what colleges and 
universities can and should do about this problem.
    It is not a new issue. Universities have been struggling 
for several years to determine the best way to deal with this 
behavior. Deciding upon the optimal response is difficult 
because it requires the universities to balance several 
competing considerations. On the one hand, the large majority 
of the ways in which students employ most peer-to-peer systems 
is illegal. Downloading copyrighted recordings violate section 
106(1) of the Copyright Act, and sending recordings to others 
in the system violates section 106(3).
    Universities have a responsibility to curtail those 
activities, just as they have a responsibility to curtail other 
illegal conduct like illegal drug usage by their students. That 
interest is reinforced by the fact that the frequent use by 
students of peer-to-peer systems to obtain music and films 
places heavy loads on the universities' networks, loads that 
the schools would like to reduce.
    On the other hand, when deciding how best to curb this 
activity, the schools are legitimately concerned about some 
potential adverse side effects. First, a small but growing 
percentage of the material that students and faculty obtain on 
peer-to-peer services consist of recordings that are either no 
longer covered by copyright or have been placed on those 
services voluntarily by the copyright owners. Downloading such 
material is lawful.
    Next, some unauthorized use of peer-to-peer services are 
also lawful, typically because they constitute fair uses within 
the meaning of section 107 of the Copyright Act. An example 
would be a film studies professor or student obtaining a copy 
of a film in order to include excerpts from it in a lecture or 
an assignment. At present, the percentage of peer-to-peer 
traffic that is educational and transformative in this sense is 
very small, but it is growing.
    Next, peer-to-peer systems are being employed for entirely 
legitimate purposes increasingly often by universities 
themselves and by other businesses and government agencies. 
Examples include the LionShare project developed at Penn State; 
the Jury System used by the Department of Homeland Security; 
the IRIS system funded by the NSF; and the ad hoc communication 
networks increasingly employed by the Defense Department.
    All use peer-to-peer architecture. Plainly, peer-to-peer 
technology is not inherently pernicious. It has both good and 
bad uses. Schools therefore want to be careful not to organize 
their network policies in ways that prevent students from 
learning about that architecture.
    Finally, most universities wish to respect the privacy of 
their students and are thus reluctant to scrutinize what they 
are watching or listening to.
    In trying to balance these competing considerations, 
colleges have a variety of tools: education, penalties for 
violating university policies, bandwidth limits, filtering, and 
legal alternatives. In my written testimony, I review the 
contents of this tool kit in some detail, but you have already 
heard here about many of these tools from the other witnesses, 
so I won't repeat what they have helpfully added to the 
discussion.
    I would only add an important general point: none of the 
tools are perfect. Generally speaking, currently, the more 
effective they are, the more serious are their adverse side 
effects. In that sense, they are a bit like cancer treatments. 
For example, the most effective of all, as some of the other 
witnesses have suggested, is filtering. But the existing 
filtering systems either block a good deal of legitimate 
activity or create serious risks of privacy invasions. They are 
getting better, but they are not yet perfect.
    The most promising of the devices in the long run are legal 
alternatives. Again, previous witnesses have described a 
growing number of services of this sort. In my written 
testimony, I also describe a new voluntary system that, with 
funding from the MacArthur Foundation, the Berkman Center, the 
institute I direct, is currently building in Canada and China a 
system that we believe will work well there.
    Indeed, we recently negotiated an agreement that will 
provide the service to all of the 20 million university 
students in China. If adapted to the very different legal and 
economic climate in the United States, it could work well here 
as well, to wean students from illegal activity and provide 
copyright owners much larger sources of revenue.
    Already, more students in the United States use legal 
services than engage in unlawful downloading, and the number is 
rising. The best thing about the legal alternatives is that 
they escape the whack-a-mole problem that for years has beset 
this field. You beat down one form of illegal conduct, and a 
different version just springs up in its place. The increasing 
deployment and usage of legal options promises to break that 
cycle.
    The central point for your purposes her is that the 
universities have to balance competing goals and they have to 
pursue their goals with blunt instruments. The goals and the 
instruments are changing. In this environment, it is crucial 
that the schools have the flexibility to decide how best to 
proceed.
    It is not as though they are sitting on their hands. The 
large majority of institutions, as we have heard, have already 
instituted policies vis-a-vis file sharing. It would be a 
serious mistake for the Federal Government to force them into a 
common mold.
    Thank you very much.
    [The prepared statement of Mr. Fisher follows:]

Prepared Statement of William W. Fisher III, Hale and Dorr Professor of 
Intellectual Property Law, Harvard University; Director, Berkman Center 
                        for Internet and Society

    The problem we are discussing today is serious. Since 1999, large 
numbers of students at most American colleges and universities have 
been using peer-to-peer (P2P) file-sharing services to exchange, 
without authorization, digital copies of copyrighted works. Successful 
lawsuits brought by the copyright owners against some of the early 
services (e.g., Napster, Scour, Aimster, and Grokster), plus over 
15,000 lawsuits brought against individual students, have curbed this 
activity to some degree. But new P2P systems (e.g., eDonkey, 
BitTorrent, myTunes, Direct Connect) continue to appear, and, by most 
accounts, their use by students remains common.\1\
    Colleges and universities have been struggling for several years to 
determine the best way to deal with this behavior. Deciding upon the 
optimal response is difficult because it requires the universities to 
balance six competing considerations:
    First, at present, the large majority of the ways in which students 
employ most P2P systems are illegal. Most of the material distributed 
through those systems consists of audio and video recordings, the 
copyrights in which are owned by organizations that object to their 
circulation. When a student uses a P2P network to ``download'' a copy 
of such a recording to his or her computer, he or she violates section 
106(1) of the Copyright statute; when a student ``uploads'' a copy of 
such a recording to the system--i.e., sends a copy to another user--her 
or she violates section 106(3) of the statute.\2\ On occasion, for 
reasons discussed more fully below, such a violation is excused by 
other provisions in the statute, but those excuses are inapplicable to 
the large majority of acts of downloading and uploading. In short, most 
of the students' activities are unlawful, and universities have an 
interest in curtailing those activities, just as they have an interest 
in curtailing underage drinking or illegal drug usage by their 
students.
    Second, the frequent use by students of P2P systems to obtain music 
and films places heavy loads on universities' information-technology 
networks. Strengthening the networks so that they can bear those loads 
and still provide students, faculty, and staff the research and 
communication services for which they were originally built is 
expensive. For obvious reasons, the universities would like to reduce 
those costs. The most direct way to do so is to curb students' use of 
the systems to gain access to entertainment.
    Third, a small but growing percentage of the material that students 
and faculty obtain on P2P services consists of recordings that either 
are no longer covered by copyright or have been placed on those 
services voluntarily by copyright owners. Downloading such materials is 
lawful. Here are some examples:
    a) A growing group of artists--among them, Wilco, Janis Ian, Pearl 
Jam, Dave Matthews, and John Mayer--have licensed the distribution of 
some of their recordings through P2P networks.\3\
    b) Project Gutenberg, a large online library of digital copies of 
books that are in the public domain (typically because copyrights in 
them have expired) encourages the distribution of its holdings through 
P2P networks.\4\
    c) The owners of the copyrights in many more recently created books 
and sound recordings have released them to the public under ``Creative 
Commons'' licenses and encourage consumers to share them through P2P 
systems. A partial list of such works may be found on the website, 
``Legal Torrents.''\5\
    d) Many open-source computer programs are distributed with 
permission through BitTorrent, one of the more popular and efficient 
P2P systems.\6\
    e) Warner Bros. recently announced a plan to ``make hundreds of 
movies and television shows available for purchase over the Internet 
using BitTorrent software.''\7\
    f) The Digital Bicycle system, soon to be released to the public, 
will enable the creators of programming for local-access television 
stations to distribute their works both among themselves and to wider 
audiences via BitTorrent.\8\
    Fourth, some uses of P2P services, although they involve 
unauthorized sharing of copyrighted material, are nevertheless lawful--
typically because they constitute ``fair uses'' within the meaning of 
section 107 of the Copyright statute.\9\ For example, teachers of film-
studies courses and their students, when preparing lectures or doing 
assignments, frequently must use unencrypted digital copies of movies. 
If they are unable to obtain them by removing the CSS coding that 
protects DVDs containing the movies (a practice that violates the 
Digital Millennium Copyright Act), they sometimes get them through P2P 
systems. That practice, because it is noncommercial, 
``transformative,'' and educational in character, most likely qualifies 
as a lawful ``fair use.''\10\ The percentage of P2P traffic that 
currently consists of privileged behavior of this sort is very small. 
But, as more and more educational activities come to depend upon 
transformative uses of digital media, the percentage will grow.\11\
    Fifth, P2P systems are being employed for entirely legitimate 
purposes increasingly often by the universities themselves and by 
businesses and government agencies outside the universities. For 
example, the LionShare project, developed at Pennsylvania State 
University, uses P2P technology to enable ``faculty, researchers, and 
students to trade photos, research, class materials, and other types of 
information that may be not be easily accessible through current 
technology.''\12\ The Coral Project, developed at New York University, 
likewise uses P2P technology to enable website operators inexpensively 
``to run a web site that offers high performance and meets huge 
demand.''\13\ The Department of Homeland Security uses the JRIES 
(``Joint Regional Information Exchange System'') P2P file-sharing 
system to communicate sensitive but unclassified information among its 
regional offices and other government entities.\14\ The IRIS 
(``Infrastructure for Resilient Internet Systems'') Project, sponsored 
by the National Science Foundation, uses P2P architecture to support 
large distributed computing applications that are resilient to ``denial 
of service'' attacks.\15\ Even the Department of Defense is relying 
upon P2P technology when developing ``large-scale, highly distributed, 
mobile networks-of-networks that are increasingly wireless, deal with 
time-critical problems, and face potential attackers who are extremely 
dedicated and sophisticated.''\16\ Of course, none of the ventures 
mentioned in this paragraph is employed by students to exchange 
commercial audio and video recordings, and no one is suggesting that 
the universities should block access to these projects. Nevertheless, 
students argue that, when they graduate, they will be better prepared 
to work with and contribute to the proliferating enterprises of this 
general sort if they are already familiar with parallel technologies 
developed primarily for the exchange of entertainment. This argument is 
flimsy as applied to simple services like the original Napster, which 
taught their users little. But it gains force as applied to the more 
complex and flexible modern services.
    Sixth, most universities wish to respect the privacy of their 
students. Monitoring what they read or the content of their 
conversations would plainly be inappropriate--and in some instances 
would be illegal. For similar reasons, most universities are 
justifiably loathe to scrutinize what their students are watching or 
listening to in the form of entertainment.
    The first two of these factors, it should be apparent, provide 
universities good reasons to curtail file-sharing or to block it 
altogether. The other four factors, however, set limits on their 
ability or willingness to do so.
    In the past few years, American universities have developed and 
deployed a wide variety of tools to aid them in their efforts optimally 
to balance these competing considerations. Here are the primary ones:
    a) Education. The large majority of American colleges and 
universities now provide their students information concerning the 
illegality of unauthorized P2P file sharing of copyrighted 
materials.\17\ The methods by which they inform their students vary. 
Most have adopted and have posted on their websites university policies 
on the subject. Large numbers incorporate presentations on the subject 
in their freshman-orientation programs. Many distribute videos and 
posters.\18\ At least one (the University of Virginia) requires 
students to take a quiz, which includes questions about file-sharing, 
before they are granted network access.\19\ Most use a combination of 
these methods.\20\
    b) Enforcement. Many schools back up their policies against illegal 
file-sharing with serious sanctions. One commonly used system is the 
so-called ``three strikes'' approach. A student caught violating the 
policy for the first time receives a formal warning. If caught for a 
second time, his network privileges are temporarily suspended. If 
caught for a third time, his privileges are suspended indefinitely.\21\ 
Other schools permit students only two ``strikes.''\22\ UCLA employs a 
``quarantine'' system, under which students caught file-sharing 
illegally are disconnected from the school's network until they sign an 
electronic statement verifying that they have removed the infringing 
files.\23\ A few schools have gone so far as to raid the dorm rooms of 
students who engage in illegal file-sharing.\24\
    c) Network access limitations. Some universities limit the amount 
of bandwidth their students may use in an effort to curtail the 
downloading of large media files. Students who exceed the limit receive 
warnings and may have their network privileges revoked. Schools that 
have employed this strategy include the University of California at 
Berkeley, Pennsylvania State University, Vanderbilt, Central Michigan 
University, and the University of Texas at Austin.\25\ At least one 
college outside the United States--Churchill College of Cambridge 
University--has adopted the same approach.\26\ Though helpful in 
reducing loads on the universities' networks, this strategy has the 
disadvantage of curtailing students' access to large files lawfully 
available through P2P systems (or elsewhere on the Internet).
    d) Filtering. A small group of universities use software to try to 
prevent their students from downloading material they shouldn't. Two 
technologies are now available to schools that want to go this route. 
``Icarus,'' developed at the University of Florida, is a network-based 
system that blocks the transmission of any information bearing the 
signature of a P2P application.\27\ ``CopySense'' is a network filter 
that scans song files, hunts for digital fingerprints of copyrighted 
recordings, and stops file transfers when it finds matches.\28\ Both 
have advantages and disadvantages. Icarus has virtually eliminated P2P 
traffic at the University of Florida.\29\ Unfortunately, a side effect 
has been to block all lawful downloads (of the sorts discussed above) 
from the forbidden services. CopySense is more precise but also more 
intrusive. Roughly 40 schools now employ it, but they have been 
criticized by their students and others on the ground that the system 
invades students' privacy.\30\ The University of Wyoming, swayed by 
this criticism, discontinued use of the system.\31\
    e) Legal Alternatives. A rapidly growing group of schools are 
attempting to wean students from illegal file-sharing by offering them 
inexpensive, legal ways to download copyrighted recordings. 
Pennsylvania State University pioneered this strategy, striking a deal 
in 2003 with the reformed version of Napster to provide its students 
free access to Napster's catalogue of recordings. Other companies that 
have struck analogous deals with other schools include Cdigix, Ruckus, 
MusicRebellion, and Apple.\32\ Over 70 universities--among them, the 
University of Southern California, the University of Miami, George 
Washington University, Cornell University, Middlebury College, Wright 
State University, Yale University, Duke University, Wake Forest 
University, the University of Colorado at Boulder, Ohio University, 
DePauw University, and Northern Illinois University--now offer their 
students legal options of this sort.\33\ One of the advantages of this 
approach is that, by relying on carrots rather than sticks, it avoids 
the frustration--often likened to a ``Whack-a-Mole'' game--experienced 
by copyright owners and their representatives when stamping out 
unlawful P2P services, only to see new services spring up in their 
place.
    At the same time as the universities have been experimenting with 
strategies of these various sorts, the legal and economic background 
has been changing. The high-profile lawsuits brought by the 
entertainment companies both against individual file-sharers and 
against P2P services (including the decision of the Supreme Court in 
Grokster) have increased sharply public awareness of the illegality of 
the activity. Simultaneously, a rapidly growing group of companies have 
begun offering consumers convenient, inexpensive ways to download music 
and films lawfully. Some of these companies (e.g. the Apple iTunes 
Store) charge for each download.\34\ Others (e.g., Rhapsody; some of 
the variants of MTV's new service, URGE; and Starz' new movie 
distribution site, Vongo) allow subscribers to download or stream large 
numbers of files for a flat monthly fee.\35\ Still others (e.g., 
YouTube and the new NBC Broadband service) are ``free'' to consumers, 
but rely on advertising revenue to compensate creators.\36\ Students 
have been taking advantage of these opportunities in growing numbers. A 
survey conducted recently by the Intellectual Property Institute of the 
University of Richmond revealed that the percentage of American college 
students who download recordings from the authorized, for-fee services 
(39%) is now larger than the number who download recordings from the 
unauthorized free services (34%).\37\
    As should be apparent from the foregoing analysis, at least four 
dimensions of the problem of campus P2P traffic are in flux: First, the 
nature of the unauthorized P2P services that students employ is 
constantly changing. As some are shut down, others, employing different 
architectures, emerge. Second, the set of lawful uses of those services 
continues to increase, thus raising the costs associated with blocking 
access to them altogether. Third, the technologies available to 
universities that enable them to limit their students' access to these 
services--or to employ them in improper ways--are changing rapidly. 
Icarus and CopySense are quite new applications. Each, as we have seen, 
has important drawbacks. Others, more subtle and precise, are likely to 
emerge in the near future. Fourth and finally, companies that enable 
students to obtain digital audio and video recordings lawfully are 
proliferating, and students are using them increasingly often. The 
problem of illegal file-sharing is far from over, but it may be 
abating.
    In this environment of complex, competing considerations and 
rapidly changing technologies, it is crucial that each university 
remain free to select the combination of tools that it considers best, 
and to modify its approach when it sees fit. There is not--and cannot 
be--a single set of ``best practices.'' Instead, as the Education Task 
Force of the Joint Committee of the Higher Education and Entertainment 
Communities wisely observed, ``[e]ach institution must decide on the 
combination of educational, technological, and disciplinary approaches 
that best meet its pedagogical, legal, and ethical needs and 
objectives.''\38\
    I would like to close my testimony by briefly describing a system 
that the Berkman Center, with generous funding from the MacArthur 
Foundation, is currently building that, in our judgment, could go a 
long distance toward solving this problem. The gist of the system is 
that it would legally provide consumers unlimited online access to 
copyrighted recordings, unencumbered by encryption, while ensuring that 
the owners of the copyrights in those recordings were fully and fairly 
compensated. Here is how such a seemingly improbable outcome could be 
achieved:
    In each country in which the system were instituted, copyright 
owners (record companies, music publishers, film studios, etc.) would 
license a nonprofit private enterprise to distribute digital copies of 
their works. (The name of the enterprise would vary by country, but the 
name we have selected for Canada is Noank Media.) Noank Media would, in 
turn, enter into contracts with major access providers: Internet 
service providers (like Comcast or Verizon); mobile phone providers 
(like T-Mobile); and, last but not least, universities. Those contracts 
would oblige Noank Media to provide the customers, employees, and 
students served by the access providers unlimited downloading and 
streaming services. In return, each access provider would agree to pay 
Noank Media a certain amount each year for each of its customers, 
employees, or students.
    To gain access to the Noank Media catalogue, each customer, 
employee, or student would download to his computer a simple software 
program, which in turn would connect him to a constantly updated index 
of all of the recordings within the system and provide him various ways 
(e.g., downloading from a central server, downloading through a P2P 
network, or streaming) of obtaining those recordings. In addition, the 
software program would count the number of times that each consumer 
listened to or watched each of the recordings he obtained (either on 
his computer or on portable devices dependent on that computer) and 
would periodically relay that information to Noank Media (much the way 
that TiVo machines regularly communicate with the TiVo company). That 
data would be be aggregated without revealing the identities of 
individual users, thus respecting consumers' privacy rights.
    The money collected from the access providers would be distributed 
as follows: 15% would be paid to a for-profit operating company, in 
return for developing and maintaining the technology, for negotiating 
the contracts, for marketing the service, and for running a dispute-
resolution system that would fairly resolve any disputes over ownership 
of the copyrights on the works within the system. (This 15% is smaller 
than the percentage of revenues withheld for administrative purposes by 
any other collecting society in the world.) The remaining 85% would be 
distributed to the copyright owners in proportion to the relative 
frequency with which their works had been consumed during the preceding 
reporting period. (A chart showing how these various revenue streams 
and contracts interact is appended to this testimony.)
    Notice that this system is entirely voluntary. Copyright owners 
would contribute their works to the system only if they decided that it 
was in their best economic interests. And their ability to withhold 
their works would give them considerable clout, collectively, when the 
rates that the access providers must pay are set and periodically 
adjusted.
    That, in brief, is the essence of the plan. I would be happy to 
provide additional details if the Committee would find them useful.
    The system is rapidly taking shape--not in the United States, where 
resistance to this approach has thus far been strong, but in other 
countries, most notably in Canada and China. In China, for example, we 
recently entered into an agreement with Tsinghua University (the 
leading technology university in the country, analogous to the 
Massachusetts Institute of Technology or the California Institute of 
Technology in the United States). Among many other things, Tsinghua 
oversees the development and management of the CERNET network, which 
provides Internet access to the roughly 20 million university students 
in China. Under the terms of our agreement, Tsinghua will not only help 
design and implement the independent Chinese version of Noank Media 
(called ``Fei Liu''), but also will make the service available to all 
of the universities in CERNET network in return for the payment by each 
university of per-student annual fees. Once the system is fully 
operational, the revenue stream reaped by copyright owners from this 
one source alone could be quite large. Lining up access providers, like 
Tsinghua, is of course important, but equally important is ensuring 
that the system will contain a generous catalogue of recordings. So 
far, Shanghai Media Group, Radio Television Hong Kong, and Jingwen 
Records, each with very large holdings of audio and video recordings, 
have tentatively agreed to license to Fei Liu much or all of their 
catalogues for a trial of the system. We are actively pursuing other 
leads in this area.
    To work, a system of this sort requires voluntary participation 
from all of the major sectors of the entertainment industry: copyright 
owners; artists; access providers; and consumers. Cooperation of this 
sort will be difficult to achieve. But if all sectors can be persuaded 
to join, they will all benefit. Consumers will gain unlimited access to 
recordings that they can play on any equipment and can freely share, 
while paying less, on average, than they currently do for much more 
limited material. Copyright owners and the artists whose interests they 
ultimately serve will make more money than they currently do. (The 
benefits to copyright owners are obvious in a jurisdiction like China, 
where ``piracy'' rates are currently very high. But, if the per-
customer fees are set properly, copyright owners will also enjoy a 
substantial net benefit in jurisdictions like Canada or the United 
States, where ``piracy'' rates are not so extreme.) Finally, we will 
all benefit from elimination of the legal strife that has wracked the 
entertainment industry in recent years.
    The purpose of the foregoing summary is not to persuade you that 
American universities should immediately adopt the Noank Media model. 
For various reasons, it will be harder and more time-consuming to 
implement the system in this country than in most other jurisdictions. 
Rather, my objective is to emphasize the rapid pace of innovation in 
this field. New potential solutions to the P2P crisis are emerging 
monthly. Universities must remain free to adopt the system (or 
combination of systems) that best matches their individual needs--and 
to change approaches when those needs or the possible ways of 
addressing them shift.
    In drafting this testimony, I have been assisted by Elizabeth 
Barchas, Michael Kaiser, Dan Kahn, Sean Kass, Christina Mulligan, and 
Eric Rice.
                                endnotes
    \1\ For indications of the scale of the problem, see Paul Devinsky 
and Robert H. Rotstein, ``The End of Peer-to-Peer File Sharing,'' 
Mondaq Business Briefing, 2006 WLNR 9316103 (May 31, 2006); Sarmad Ali, 
``Becoming Part of the Solution,'' Wall St. J. Abstracts, 2006 WLNR 
5837206 (April 6, 2006).
    \2\ 17 U.S.C. sections 106(1) and 106(3) grant ``the owner of 
copyright under this title * * * the exclusive rights to do and to 
authorize any of the following: (1) to reproduce the copyrighted work 
in copies or phonorecords; [and] * * * (3) to distribute copies or 
phonorecords of the copyrighted work to the public by sale or other 
transfer of ownership, or by rental, lease, or lending.'' It is now 
well settled that downloading and uploading copyrighted recordings 
using P2P services violates these provisions. See, e.g., A&M Records v. 
Napster, Inc., 239 F.3d 1004, 1014 (9th Cir. 2001).
    \3\ See MGM Studios, Inc. v. Grokster, Ltd., 125 S.Ct. 2764, 2789 
(2005) (Breyer, J., concurring).
    \4\ The catalogue of books made available, lawfully, to the public 
by Project Gutenberg is available at http://www.gutenberg.org/catalog/. 
The project's endorsement of P2P distribution of its materials is set 
forth on: http://www.gutenberg.org/wiki/Gutenberg:File--Sharing--How-
To.
    \5\ See http://www.legaltorrents.com/index.htm. Other sites where 
copyrighted material that has been licensed for distribution through 
P2P systems may be found include http://www.jamendo.com/en/; http://
www.cactusesmovie.com/; http://orange.blender.org/. An example of a 
popular film circulated with permission in this fashion is 
``Outfoxed.'' See http://creativecommons.org/press-releases/entry/4401.
    \6\ See http://linux.mybookmarkmanager.com/.
    \7\ Julie Bosman and Tom Zeller, Jr., ``Warner Bros. to Sell Movies 
Using the Software of Pirates,'' New York Times, May 9, 2006, Section 
C; Column 1; Business/Financial Desk; Pg. 3. Under the plan, users 
``will be prevented from copying and distributing files they purchase 
through two mechanisms: one that requires them to enter a password 
before watching a file, and another that allows the file to be viewed 
only on the computer to which it was downloaded.''
    \8\ See http://digitalbicycle.org/.
    \9\ For a general discussion of the application of the fair-use 
doctrine to educational uses of digital recordings, see ``The Digital 
Learning Challenge: Obstacles to Educational Uses of Copyrighted 
Material in the Digital Age'' (2006), available at http://
cyber.law.harvard.edu/media/files/copyrightandeducation.html, section 
3.2.
    \10\ See Universal City Studios, Inc. v. Reimerdes, 111 F.Supp.2d 
294, 322 (SDNY 2000), aff'd sub nom. Universal City Studios, Inc. v. 
Corley, 273 F.3d 429 (2d Cir. 2001) (describing ``the preparation by a 
film studies professor of a single CD-ROM or tape containing two scenes 
from different movies in order to illustrate a point in a lecture on 
cinematography'' as a use ``that might qualify as `fair' for purposes 
of copyright infringement''). For discussion of the increasing 
frequency and educational importance of this practice, see William 
Fisher and Jacqueline Harlow, ``Film and Media Studies and the Law of 
the DVD,'' Cinema Journal 45:3 (Spring 2006).
    \11\ The BBC Creative Archive has both fostered and documented many 
creative, educational uses of digital media. A film shown by Paul 
Gerhardt, Joint Director of the Archive, at a recent conference on 
``Open Content and Public Broadcasting,'' contained some extraordinary 
examples. Such activities are bound to increase in the near future.
    \12\ See Genaro C. Armas, ``Researchers Develop More Efficient 
File-Sharing Tech,'' TechWebNews, (September 21, 2005), available at 
2005 WLNR 14923554; http://lionshare.its.psu.edu/main/info/
docspresentation/LSFinalWhitePaper.pdf.
    \13\ See http://www.coralcdn.org.
    \14\ See http://www.dhs.gov/dhspublic/display?content=3350.
    \15\ See http://project-iris.net/; David Cohen, ``New P2P Network 
Funded by US Government,'' NewScientist.com, October 1, 2002, available 
at http://www.newscientist.com/article.ns?id=dn2861.
    \16\ Statement of Dr. Tony Tether, Director of the Defense Advanced 
Research Projects Agency, Submitted to the Committee on Science, United 
States House of Representatives, May 14 2003, available at http://
www.house.gov/science/hearings/full03/may14/tether.htm.
    \17\ See Reducing Peer-to-Peer (P2P) Piracy on University Campuses: 
A Progress Update Before the Subcomm. on Courts, the Internet, and 
Intellectual Property of the H. Comm. on the Judiciary, 109th Cong. 
(2005) [hereinafter ``Reducing Peer-to-Peer Piracy on University 
Campuses''] (testimony of Norbert W. Dunkel, Director of Housing and 
Residence and Education at the University of Florida), available at 
http://commdocs.house.gov/committees/judiciary/hju23572.000/hju23572--
0.HTM (finding that 92 percent of institutions with high-speed 
connections had taken steps to educate their students).
    \18\ A video on the subject, developed at the University of 
Virginia and now also being used at other schools, is available at 
http://www.itc.virginia.edu/pubs/docs/RespComp/videos/home.html.
    \19\ See Andrea L. Foster, ``U. of Virginia Turns to Parody to Warn 
Students About Misusing Computers,'' The Chronicle of Higher Education 
(Aug. 30, 2001), available at http://chronicle.com/free/2001/08/
2001083001t.htm.
    \20\ Examples of schools using multifaceted educational programs 
include: the University of Wisconsin-Madison (published policy, videos, 
radio spots, posters--see http://www.doit.wisc.edu/security/policies/
rules.asp); Emory University (poster campaign, newsletter, 
advertisements in the school newspaper, e-mail to students discussing 
illegal file sharing--see Brock Read, ``Downloading to a Lawful Beat,'' 
The Chronicle of Higher Education, at 43, Oct. 22, 2004); Princeton 
(detailed public policy, presentations at residential colleges--see 
Education Task Force of the Joint Committee of the Higher Education and 
Entertainment Communities, University Policies and Practices Addressing 
Improper Peer-to-Peer File Sharing (2004), at 4, available at http://
www.acenet.edu/AM/Template.cfm?Section=Legal--Issues--and--Policy--
Briefs2&TEMPLATE=/CM/ContentDisplay.cfm&CONTENTID=8503); Purdue 
(students required to agree to an Acceptable Use Policy before using 
computer resources, student-government forum on unauthorized file 
sharing--see id. at 3); and the University of Miami (public policy, 
orientation flyers highlighting the policy and outlining enforcement 
procedures--see http://www6.miami.edu/security/
ITSecStudentOrientationBrochure.pdf).
    \21\ See Jason Putter, ``Copyright Infringement v. Academic Freedom 
on the Internet: Dealing with Infringing Use of Peer-to-Peer Technology 
on Campus Networks,'' 14 J.L. & Pol'y 419, 466--67 (2006).
    \22\ See Education Task Force of the Joint Committee of the Higher 
Education and Entertainment Communities, supra note 21, at 5.
    \23\ See Charlotte Hsu, ``UCLA Uses Its Own Creation to Fight 
Illegal File-Sharing,'' Daily Bruin, Oct. 5, 2004, available at http://
www.dailybruin.ucla.edu/news/articles.asp?id=30169.
    \24\ See Jane Black, ``Music Pirates at the Naval Academy?,'' 
Business Week Online, Nov. 27, 2002, available at http://
www.businessweek.com/technology/content/nov2002/tc20021127--2314.htm; 
Brandon Worth, ``File-Sharing Hub Hums Away at OU, Despite 
Controversy,'' The Athens News, May 18, 2003, available at http://
www.athensnews.com/issue/article.php3?story--id=12618.
    \25\ See Progress During the Past Academic Year Addressing Illegal 
File Sharing on College Campuses: A Report to the Subcomm. on Courts, 
the Internet, and Intellectual Property of the H. Comm. on the 
Judiciary, 108th Cong. (2004) (report by the Joint Committee of the 
Higher Education and Entertainment Communities), available at http://
commdocs.house.gov/committees/judiciary/hju96286.000/hju96286--0.HTM; 
Reducing Peer-to-Peer Piracy on University Campuses, supra note 17 
(testimony of Daniel A. Updegrove, Vice President for Information 
Technology at the University of Texas at Austin).
    \26\ See http://www.chu.cam.ac.uk/members/computing/internet--
usage.php.
    \27\ See Reducing Peer-to-Peer Piracy on University Campuses, supra 
note 17.
    \28\ See Jeffrey R. Young, ``Two Universities Test Controversial 
Filter to Fight Online Piracy,'' The Chronicle of Higher Education, 
April 16, 2004, at 31.
    \29\ See See David Joachim, ``The Enforcers--The University of 
Florida's Icarus P2P-Blocking Software Has Clipped Students' File-
Sharing Wings. Do Its Policy-Enforcing Capabilities Go Too Far?,'' 
Network Computing, Feb. 19, 2004, available at http://
cyber.law.harvard.edu/home/uploads/331/6/Icarus--at--
UF.pdf#search=%22Joachim%20the%20enforcers%22.
    \30\ See Hsu, supra note 23.
    \31\ See Young, supra note 28.
    \32\ See Jeffrey R. Young, ``Napster and 6 Colleges Sign Deals to 
Provide Online Music to Students,'' The Chronicle of Higher Education, 
July 30, 2004, at 1.
    \33\ See id.; Reducing Peer-to-Peer Piracy on University Campuses, 
supra note 17 (report from the Joint Committee of the Higher Education 
and Entertainment Communities).
    \34\ See ``Disney CEO touts new iTunes movie downloads,'' Reuters 
News, September 19, 2006.
    \35\ See http://www.rhapsody.com/-unlimited; www.urge.com; 
``FACTBOX--Online download firms compete for DVD market,'' Reuters 
News, July 19, 2006.
    \36\ See Kevin J. Delaney and Ethan Smith, ``YouTube Model Is 
Compromise Over Copyrights,'' Wall St. J., September 19, 2006, at B1; 
``NBC to offer new shows on Web to build audiences,'' Reuters News, 
September 14, 2006.
    \37\ The survey is described at http://law.richmond.edu/news/
view.php?item=187. The relevant questions and the responses to them can 
be found at http://law.richmond.edu/ipi/pdf/SurveyResults.pdf.
    \38\ See http://www.acenet.edu/AM/
Template.cfm?Section=Search&section=Legal--Issues--and--Policy--
Briefs1&template=/CM/ContentDisplay.cfm&ContentFileID=721.
                                 ______
                                 
    Chairman Keller. Thank you, Dr. Fisher.
    Now, I am pleased to recognize for questioning or comments 
the chairman of the full committee, Buck McKeon.
    Mr. McKeon. Thank you, Mr. Chairman.
    First of all, I would like to congratulate you and your 
wife Deedee on your new baby daughter, the new addition to your 
family. That is a great way to start a new year for that baby.
    Second, I would like to thank you for holding this hearing. 
This is something that I know we have grappled with. I know I 
have talked to several of you about this issue. I know when I 
went to China last year, we took a codel to China, and this was 
on the agenda with any meeting we had with government leaders, 
with industry leaders, with education leaders over there, 
because it is such a problem over there.
    At the same time as I was talking to them, though, I felt a 
little twinge because I knew we had the problem right here at 
home and we couldn't totally expect them to clean up their 
problem, if we didn't clean up our own.
    I come from the retail industry, and we used to have 
shoplifting, both from our employees and from customers. But it 
was something that I think everybody when they took a pair of 
socks or when they took a pair of boots or when they took 
something, they knew they were breaking the law. I am concerned 
that sometimes when people steal copyrights, they don't 
understand that that is also stealing, just the same as if they 
stole a physical thing, a garment of clothing out of a store.
    With the education that people have, and they know they are 
stealing something out of a store that is of a tangible nature, 
it is much less percentage-wise, much smaller because of the 
education part. So it seems to me that we have to do a lot 
more. The tools that were mentioned by most of you, we have to 
do a lot more of that.
    Education really has to be at the forefront, and I think it 
has to start with, if not in the home, at least at 
kindergarten, because young children when they learn this, most 
of them the rest of their life will never have a problem with 
it. That leaves us with the small percentage of people that 
will knowingly break the law, and that has to be taken care of 
in other ways.
    What I am hopeful of is that it can be worked out between 
the industry and between the schools, that we don't have to 
take legislative remedies, because, as has been mentioned once, 
we pass a law. It becomes intrusive. Unintended consequences 
always set in. You know, I have seen enough times when we pass 
a law and the regulations are written, and what you start out 
to do and what you end up with is not something we want to see.
    So I am really hopeful that we can have good collaborative 
work on this and solve this issue. We will do all we can with 
the bully pulpit or whatever we can do to encourage people. We 
can get the department engaged in things that don't necessarily 
take passage of a law. But it is important.
    This hearing today will be important in the coverage that 
will come from it, and then your desires to work together to 
solve the problem. I want to commend you and thank you, and 
encourage the subcommittee chair to keep heavily involved in 
this through his committee because it is something we all have 
to work to solve.
    Thank you very much.
    Chairman Keller. Thank you, Mr. Chairman.
    I now yield 5 minutes to Mr. Kildee.
    Mr. Kildee. Thank you very much, Mr. Chairman.
    From the time of the code of Hammurabi, and it was a code, 
stealing was always considered wrong. And that is really what 
we are basically down to here. It is how we control this 
stealing and how we let people realize that there is theft 
involved here, but to do that without placing an unreasonable 
burden upon the colleges, but also to recognize that there is 
stealing.
    As a matter of fact, all of us, if I may, take an oath of 
office here, and Dan, you and I did it on January 3, 1977, we 
take an oath to support the Constitution. And the Constitution 
embodied that, too. Article I, Section 8, the Congress shall 
have power to promote the progress of science and useful arts, 
securing for limited times to authors and inventors, the 
exclusive right to their respective writings and discoveries.
    So the founding fathers recognized that this was a 
property. This was something that Congress had the right to 
protect that property. We are sitting here in that capacity, 
really, upholding that Constitution.
    In preparing for this hearing, I was very interested to 
learn that peer-to-peer technology is becoming an integral part 
of our global economy. In fact, in legal forms, many 
corporations and even the Department of Defense has been using 
it on a large scale.
    I would like to submit, without objection, Mr. Chairman, 
for the record an excerpt from Dr. Tony Tether, the director of 
Defense Advanced Research Projects Agency, DARPA, at the 
Department of Defense who testified before the Committee on 
Science in 2003 discussing peer-to-peer networks in the context 
of our national security.
    Chairman Keller. Without objection, so ordered.
    [The excerpt follows:]

Excerpt From a Statement by Dr. Tony Tether, Director, Defense Advanced 
 Research Projects Agency, Submitted to the Committee on Science, U.S. 
                 House of Representatives, May 14, 2003

    Much of what we have done, particularly for wired systems, has 
proved useful in both commercial and military systems. But, our focus 
is the specific problems DoD needs solved for network centric warfare.
    The military-specific problems that we are working on go beyond 
those faced by the commercial world today. Military networks, more than 
commercial networks, involve large-scale, highly distributed, mobile 
networks-of-networks that are increasingly wireless, deal with time-
critical problems, and face potential attackers who are extremely 
dedicated and sophisticated. Failure in military networks has extreme 
consequences.
    Moreover, network centric warfare involves networks that must 
assemble and reassemble on-the-fly on an ad hoc basis without having a 
fixed or set infrastructure in-place. In effect, we must achieve what 
has been called, ``critical infrastructure protection'' without 
infrastructure.
    In the most advanced cases, these are peer-to-peer or 
``infrastructure less'' networks. There is no fixed, in-place network 
equipment--the whole network architecture is fluid and reassembles 
dynamically. It could be that, in the long term, commercial networks 
will acquire some of these features, but, for now the Department of 
Defense is in the lead in facing these problems. (Emphasis added.)
                                 ______
                                 
    Mr. Kildee. I think that it is necessary to crack down on 
all illegal uses. I would like to hear from all our witnesses 
briefly, starting with Dr. Fisher, about your thoughts on the 
need to proactively develop positive alternatives for students 
and consumers to use for educational and entertainment purposes 
the network.
    Mr. Fisher. Suppressing illegal activity of this sort will 
never be fully effective unless good alternatives are 
available. Already, students defeated by the shutdown of the 
major peer-to-peer services like Napster and Grokster, are 
turning to much harder to detect local networks within their 
own dormitories to exchange files. So suppression by itself 
will not ever be the long-term solution. We have to build 
proactively better alternatives.
    Now, for better or worse, students have proven reluctant to 
opt into the legal alternatives. So those services that give 
them a choice have not worked anywhere near as well as services 
made available to them automatically as students. So if the 
universities adopt a policy, we are going to impose upon you a 
fee, a certain amount of money, just as they impose on student 
fees for athletic services and student entertainment and so 
forth without choice, and use that money to compensate 
copyright owners, those systems have, not surprisingly, proved 
much more popular among students than those they have to opt 
into.
    So that, in my view, is the direction that we have to 
continue to innovate. We have to build mechanisms that will 
appeal to the copyright owners and induce them voluntarily to 
contribute their materials to a catalogue that we can then make 
available to students automatically, and use the revenues 
collected from them without consent, to pay the copyright 
owners.
    That, in my view, is the best long-term solution, and it is 
that insight that we have been pursuing in constructing a 
system of this sort with aid from the MacArthur Foundation. So 
far, it looks pretty promising.
    Mr. Kildee. Mr. Glickman, do you feel that would help 
address the problem?
    Mr. Glickman. First of all, I do agree that the pursuit of 
legal alternatives, what I call hassle-free reasonable cost 
alternatives, are important. But I also would point out that 
legal services have difficulty taking root where illicit peer-
to-peer activity goes unchecked.
    So if it is there, it is ubiquitous, and it is available 
for everybody, it is pretty darn hard to get a creative mind, 
which most students are, and clever, and much more 
technologically proficient than I am, to go to the road that 
costs them a little bit of money, when in fact they can get it 
for free, particularly when they haven't been trained on the 
fact that it is illegal.
    So yes, I think legal options are extremely important, and 
both the record and film industries are offering these in kind 
of a revolutionary manner, in fact using peer-to-peer 
technologies legally because, as Professor Fisher said, peer-
to-peer is not inherently illegal if you have legal material 
being circulated on it. But I don't think that this will just 
automatically happen if the illicit peer-to-peer is there and 
it is unchallenged, and if students aren't educated into 
believing that it is wrong, or that they can be penalized for 
doing that.
    So I think it was John Maynard Keynes who once said, for 
every complicated problem, there is a simple and a wrong 
solution. I think this area is no different. This is a 
complicated problem in terms of the transfer of information 
through modern communication networks. It just takes a 
multifaceted approach, and one of the answers is offering legal 
alternatives.
    Chairman Keller. We are out of time, but let me just give 
the other witnesses a chance. Do you have any thoughts? Can you 
give us a short statement on your response to Mr. Kildee's 
question?
    Mr. Kirwan. I would just like to mention that I think the 
combination of education through programs at orientation of 
students, through course requirements, coupled with the kind of 
suggestion that Dr. Fisher made could go a long way to solving 
this problem. Universities are used to charging fees to 
students who may not use that service.
    Most institutions have an athletics fee. Not everybody goes 
to athletic contests. Most institutions have a recreation fee. 
Not every student takes advantage of those. So I think having a 
fee along the lines Dr. Fisher suggested is a very practical 
way to address this problem.
    Mr. Sherman. If I could just echo Mr. Glickman's comments. 
We have actually had the opportunity to study the opt-in rate 
for legitimate services at universities that either do or do 
not employ technical measures to inhibit illegal fire sharing. 
What we find is that the opt-in rate is much lower where the 
illegal mechanisms are still readily available, and the opt-in 
rates soar when getting the illegal material is far more 
difficult.
    So using some technical measures to inhibit illegal fire 
sharing has made the most difference in terms of the success of 
legitimate alternatives on campus.
    Ms. Elzy. I believe everything that has been said at the 
table confirms the multidimensional approach that we are trying 
at ISU, that both monitoring and legal services and education, 
as well as some of the other side issues, need to be addressed.
    I would point out, though, that I don't think universities 
are going to be as successful if they only present one legal 
option for these, because for example, if you pick Cdigix or 
Ruckus, you are ignoring two-thirds of the market that had I-
pod platforms, and those don't work with each other.
    Chairman Keller. I thank the witnesses.
    I will now recognize myself for 5 minutes of questions.
    Mr. Glickman, let me start with you. You pointed out in 
your testimony that education is an important part of any anti-
piracy campaign, and you cite the very well-publicized Supreme 
Court case of Grokster, talking about how it is wrong to 
legally download and that there is infringement on a gigantic 
scale.
    I agree with you 100 percent, but I think we have our work 
cut out for us on the education front. I would point to a very 
recent survey that showed three-quarters of the American public 
can correctly identify two of Snow White's seven dwarfs, but 
only one-quarter can name two Supreme Court justices. 
Strangely, I think Justice Souder was on both of those lists.
    [Laughter.]
    Since we are talking about stealing, I stole that line from 
Letterman, in the interests of straight talk. But it points out 
that a lot of folks are not going to be aware of the Grokster 
decision like you or Mr. Sherman are.
    I want to go beyond that, though. I think we can all 
understand your testimony about how Internet piracy affects 
movie studios and how it negatively affects the Federal 
Government because we are getting less tax revenues. Can you 
talk about the impact on those individuals who earn a living in 
the less glamorous, behind the scenes roles that a lot of us 
don't see who go to movies?
    Mr. Glickman. Perhaps the best story is told by the several 
hundred thousand, or about 95 percent of people who work in the 
movie industry, in the crafts, in the trades, and the members 
of trade unions and the like, from the grips to the camera 
operators to everybody else that form the heart of this 
business. Often, their jobs are not terribly predictable. These 
are working men and women who work based on the fact that a 
movie is being produced or not.
    That is just not in Los Angeles or New York, but movies now 
are made in virtually every state in the country, and states 
are offering all sorts of incentives to bring movies there. So 
in each one of your states now, film and television is a 
growing part of your local economy, and it is dependent on 
predictability. Without predictability, capital will not flow 
in to make the product, particularly the smaller and 
independent films that need that kind of predictability.
    We can give you some studies. In fact, there will be a 
study that is coming out. The Institute for Policy Innovation 
is coming out with studies at the end of this week which will 
amplify our piracy studies, which shows the economic impact on 
collateral industries, working people nationwide to demonstrate 
the impact that piracy will continue to have on the bulk of the 
film and television industry. I think it shows that this is a 
comprehensive problem.
    One other point I would make. You know, entertainment is 
one of the few industries in this country that we still have a 
significant economic position in terms of the rest of the 
world. I am not saying that they don't produce good movies and 
good music elsewhere in the world, but the heart of this 
business is in America, and we need to do what we can to 
preserve and strengthen this key industry.
    Chairman Keller. Let me follow that up. I am going to ask 
you a question about the cooperation between the entertainment 
community and the higher education community. If I had a magic 
wand and was the president of MPAA for a day, I am guessing 
what I would want to do is sit down with university presidents 
and say, on the carrot side, we would like you to purchase 
technology like CGRID that the University of Florida uses, or 
some other similar technology that will effectively block the 
illegal downloading. Now, there is maybe money available from 
the Federal Government to help you.
    And then on the enforcement side, I would like you to have 
some sort of three-strikes policy that you give people a 
warning when they do it illegally, and maybe step it up after 
that with some sort of temporary revocation of their network 
privileges.
    Are you having those conversations with the university 
presidents? And how are they responding to what you are talking 
with them about?
    Mr. Glickman. We are absolutely having them. I think Mr. 
Sherman can talk about this as well because his interest 
predated mine. But Dr. Kirwan is now co-chair of basically a 
committee composed of university and entertainment people to 
try to find comprehensive solutions to this problem. As Mr. 
Sherman talked about, frankly, some schools have really stepped 
up to the plate, and some haven't. They have resisted.
    That is why we have to have a comprehensive approach. The 
technology can be a big part of the solution, and I think that 
is where you all may be able to come in to provide some 
resources for these new technologies. But I also notice that in 
terms of orientation material, not a lot of schools spend a lot 
of time orienting students and parents about the dangers of 
peer-to-peer piracy.
    So there are a myriad of things we can do, and the positive 
thing about this hearing is you have brought us together, and I 
think that will continue to facilitate these discussions.
    Chairman Keller. I am about out of time. Mr. Sherman, since 
your name was brought up, do you have any thoughts on that last 
question, briefly?
    Mr. Sherman. Well, certainly the work with the joint 
committee has been exceptionally collaborative in terms of how 
to address this problem constructively. We have helped to get 
out information to all of the universities about what the law 
is, about what the practices are that are being used by other 
universities so that every university doesn't have to reinvent 
the wheel.
    We have actually brought together technology vendors with 
university people. We have brought together legitimate services 
with university people. So there has been a great deal of very 
helpful work. When we have a problem with specific 
universities, where they are getting an enormous number of 
notices and so on, we actually go and ask for a meeting with 
the president. We talk with the president.
    Very often we find the president was unaware of the 
problem. The president has a lot of other things going on. This 
is completely understandable. We get a very good reaction about 
trying to do something to solve it. But sometimes we get, 
sorry, we have other problems, solve it yourself.
    Chairman Keller. Thank you, Mr. Sherman.
    I now recognize Mr. Scott for 5 minutes.
    Mr. Scott. Thank you, Mr. Chairman.
    Mr. Glickman, it is good to see you. I sat right in front 
of you in the Judiciary Committee a couple of years ago. It is 
good to see you again.
    Is there any question, Mr. Glickman, whether or not 
stealing copyrighted material constitutes a crime? This is a 
crime, isn't it?
    Mr. Glickman. It certainly is a crime in most 
jurisdictions. It obviously depends on the scope, the dollar 
amount, all those kinds of things; whether it is a felony or 
misdemeanor, that kind of thing, and whether it is intentional 
or willful, or whether it is accidental, if there is such a 
thing.
    Mr. Scott. So if you go up on the Web and find songs or 
things like that, and just download them, file share, download 
them, is that a crime?
    Mr. Sherman. The Department of Justice has begun bringing 
criminal actions against some P2P file sharers, so obviously 
they agree that it is a crime.
    Mr. Scott. Well, whether they enforce it or not is a second 
question, but there is no question that it is a crime. Then the 
next question is, is it enforced?
    Mr. Glickman. It tends not to be highly enforced, unless it 
is part of a larger conspiracy or syndicate or that kind of 
thing.
    Mr. Sherman. There is one particular action that the 
Department of Justice brought against somebody who was part of 
a piracy ring, where they specialized in putting pre-release 
movies and music on Web sites for downloading to illegal peer-
to-peer networks. He was arrested. He had a plea bargain and he 
has now been featured in some videos that we put out talking 
about the risk to students when they engage in this behavior.
    Mr. Glickman. Mr. Scott, also last year, Congress passed 
the Family Entertainment Copyright Act which does create 
additional criminal penalties for copying pre-release material, 
pirating that. And there have been some cases brought under 
that statute.
    Mr. Scott. If you share without a profit, if you share for 
free, is that a crime?
    Mr. Sherman. It doesn't matter.
    Mr. Scott. It doesn't matter. Then what would it take to 
actually enforce the law?
    Mr. Sherman. It would require more resources by the 
Department of Justice to go after this kind of activity. Those 
resources have been increased in recent years as intellectual 
property has become a more significant component of the 
economy, and the recognition that intellectual property crime 
is a significant economic crime in the country. Therefore more 
units have been created for this type of computer crime, but 
more prosecutions would be valuable.
    Mr. Glickman. I would say the states have also engaged in a 
whole litany of new statutes, criminal, some misdemeanor, some 
felony, on illegal camcording of movies and related activities.
    Mr. Scott. Well, if you are not enforcing the law, then an 
educational program wouldn't be very effective, it would seem 
to me, because you would just be educating people to the fact 
that it could be done and you are not going to be caught.
    Mr. Sherman. That is why the record companies have taken it 
upon themselves to enforce their rights civilly. We think that 
education is very important, but we found, as you just said, 
that it wasn't enough, that we needed to reinforce that by 
creating a risk of consequences when one didn't listen to the 
educational message. We have brought a great number of 
lawsuits. It has had an extraordinary impact in terms of 
educating people that this is illegal.
    Mr. Scott. Now, there are some legal downloading where you 
pay a fee and can download legally, having paid for it. Do 
these screening mechanisms stop you from doing that? These 
screening programs?
    Mr. Sherman. No, they would not interfere with legal 
downloading services in any way.
    Mr. Scott. How would the program differentiate a legal 
download from an illegal download?
    Mr. Glickman. There might be a filter. There might be a 
watermark. There are technological ways to permit the 
copyrighted material to go through that the non-copyrighted 
material wouldn't have on them. There are other kinds of 
technological ways.
    Mr. Scott. So there is copyrighted material that you paid 
for.
    Mr. Glickman. That's correct.
    Mr. Sherman. For example, when you buy an iTunes song, it 
is encrypted when it comes down. So a filter would not filter 
it out because it would just pass through as unrecognizable.
    Mr. Glickman. Mr. Scott, if I might just mention, the 
Justice Department has created and upgraded their intellectual 
property, both civil and criminal units fighting intellectual 
property crimes, not only with respect to movies and music, but 
also with respect to pharmaceuticals, business software and the 
like. So there has been a fairly significant upgrade in 
attention at the Justice Department level in the last few 
years.
    Chairman Keller. Thank you.
    I have just been notified we are going to have votes in a 
couple of minutes, so I want to try to make sure we all get our 
member questions in. So I recognize Mr. Van Hollen for 5 
minutes.
    Mr. Van Hollen. Thank you, Mr. Chairman. I thank you and 
the ranking member for holding this hearing.
    And thank you to all the witnesses.
    Like Mr. Keller and Mr. Scott, I also serve on the 
Judiciary Committee. Obviously, we spend a lot of time there 
focusing on intellectual property issues. I think all of us are 
aware on both committees of the tremendous losses to the 
creative community as a result of copyright violations and 
other intellectual property violations.
    As all of you have said, the higher education community is 
one of the creative engines in our country, and they obviously 
have a stake in protecting copyrights and intellectual property 
specifically.
    I am very pleased to have Mr. Kirwan here, Bill Kirwan 
testifying. We are very proud of him in Maryland, as chancellor 
of our university system. As many of you know, he previously 
headed the University of Maryland at College Park. We lost him 
for a little while to Ohio, but we are always pleased to have 
him back.
    And thank you for your service in trying to bring the 
higher education community together in partnership with others 
to address this issue in a way that reduces the abuses, but 
also, as you have all said, preserves the legitimate services 
and uses of peer-to-peer technology.
    If I could, Mr. Kirwan, just ask you to talk a little bit 
more about the role of the joint committee of the higher 
education and entertainment communities, exactly where you see 
that process going, and to what extent you are getting the full 
cooperation from the membership. The testimony here has been 
that the response from the higher education community has been 
mixed, that some people have been responsive and some have not.
    To what extent is this joint committee a good vehicle that 
you can use to expand cooperation through the full higher 
education community? I would be interested in any ideas we have 
from other members of the panel of how we might make this 
vehicle an even better tool, as one of the tools in the tool 
kit that Dr. Fisher mentioned, and what kind of approach it can 
recommend to everybody in the higher ed community.
    Mr. Kirwan. Thank you, Congressman Van Hollen. Let me say 
as a citizen of the state of Maryland how pleased and proud I 
am to see you sitting on this committee.
    I am just now joining this joint committee, so my 
experience with it so far has been in communications I have 
received from it. But my sense from that experience, and in my 
orientation to the work of the committee, I think it is an 
excellent vehicle to help higher education address this 
problem.
    You know, one of the unfortunate facts about higher 
education is things don't always move as quickly as the people 
outside higher education would like to see. What I am observing 
is that there is a growing awareness of this problem within 
higher education, and an increasing participation on the part 
of institutions, I think largely because of the communication 
efforts of this joint committee and the work of it.
    I know that we are going to be convening groups, 
circulating new material, getting on association annual 
meetings, making this a topic of discussion. As has been 
pointed out, new technologies, new ideas are coming out. So as 
an optimist, I believe we can get our hands around this problem 
and get this issue resolved.
    Chairman Keller. Thank you, Mr. Van Hollen.
    Ms. Davis, we will yield to you as much time as you are 
willing to consume, under 5 minutes, I hope.
    Mrs. Davis of California. Thank you. I will be brief. I am 
sorry I missed some of the testimony.
    I wanted to just raise the issue, sort of this balance. Do 
we have, certainly artists and musicians out there who really 
are seeking to have their music out there in the public, 
essentially, and among the students? I don't know whether you 
have a sense of whether they are fighting this, or how do we 
balance that? Because in some ways, we know that there are 
individuals who feel that short of this, they are really not 
able to access the public citizenry.
    Mr. Sherman. Those artists should have the opportunity to 
have their music on a peer-to-peer system if they want it to 
be. The beauty of some of the technologies available now is 
that their music can be on and pass freely to whomever wants 
it, while other artists who choose not to have their music on 
it will be filtered out, and those illegal transmissions will 
be stopped. It isn't an all-or-nothing situation. The 
technology has advanced to the point where an artist who wants 
his or her work to be freely available can do so, while other 
artists don't have to be forced to make that same decision.
    Mr. Glickman. I would also point out, Congresswoman, that 
during the Grokster case, as the case went through all the way 
to the United States Supreme Court, where the court basically 
ruled, without being too precise, if you encourage people to 
put the illegal stuff on a peer-to-peer network, that would be 
wrong.
    Well, the overwhelming number of artists of all sizes, from 
film to music, were in support of that Grokster decision. So I 
think you can accomplish what Mr. Sherman said within that 
Grokster case, and do it legally.
    Mrs. Davis of California. So you think that that issue is 
really not substantive anymore? That we really can do that and 
that shouldn't be an issue? Is that in the public domain in 
terms of education?
    Mr. Sherman. Well, it isn't technically in the public 
domain as a matter of copyright law, but it is basically 
licensed use that is authorized by an artist. When this problem 
started, these technologies didn't exist. The Audible Magic 
technology is so sensitive now that it can distinguish between 
a live and a studio version of a song by the same group. It has 
really become phenomenally useful in terms of being able to 
distinguish the infringing use from the non-infringing use.
    Mrs. Davis of California. Thank you. I appreciate that.
    Ms. Elzy, you mentioned the Digital Citizens project. Just 
what does that cost students to be part of that? Anything?
    Ms. Elzy. Since we are still in the formative stages of the 
program, we are finalizing that right now. We are talking in 
figures of about perhaps $20 for the year, $20 to $40, but we 
will be deciding that in the next month.
    Mrs. Davis of California. And your response from students?
    Ms. Elzy. It has been surprising. One of the early meetings 
we had with student leadership was almost non-interest. The 
chair of the group said, we trust you to do what is right for 
us and to protect us, so if you say this is what we need to do, 
this is what we will do. Now, that was one student group out of 
20,000 students, I admit, but we are hopeful that while we know 
we will have some blowback, that in general once they 
understand the full scope of the program, the students will 
take to it.
    Mr. Glickman. May I just make one comment? In light of 
Illinois State, which is doing such a great job, I would point 
out the GAO is trying to ascertain, get data about what 
universities are doing in this area. There is some reluctance 
on universities, which has been reported in the education 
press. So anything this committee could do to try to get 
universities to comply with what the GAO is getting would be 
greatly appreciated.
    Mrs. Davis of California. Great. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Keller. Thank you, Ms. Davis.
    I wish to thank the witnesses for their valuable time and 
testimony, and the members for their participation.
    If there is no further business, the subcommittee stands 
adjourned.
    [Whereupon, at 12:11 p.m., the subcommittee was adjourned.]

                                 
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