[Congressional Record Volume 149, Number 47 (Monday, March 24, 2003)]
[Senate]
[Pages S4326-S4328]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN:
  S. 692. A bill to require the Federal Trade Commission to issue rules 
regarding the disclosure of technological measures that restrict 
consumer flexibility to use and manipulate digital information and 
entertainment content; to the Committee on Commerce, Science, and 
Transportation.
  Mr. WYDEN. Mr. President, today I am introducing the Digital Consumer 
Right To Know Act. The thrust of this bill is quite simple. Digital 
media companies are racing to develop technologies to combat piracy. 
Some of these anti-piracy measures could have the effect of restricting 
lawful, legitimate consumer uses as well as unlawful copying. My bill 
says that if digital content is released in a form that prevents or 
limits reasonable consumers uses, consumers have a right to be told in 
advance.
  The shift from analog to digital technologies carries many potential 
benefits for all concerned--for technology companies, for producers of 
music, video, and other content, and above all, for consumers. Digital 
technologies, together with the rise of the Internet, promise to expand 
exponentially the possibilities for circulating, marketing, 
manipulating, and using creative works. There is so much more you can 
do, and so many fertile fields for innovation.
  The shift to digital, however, also carries twin risks. The first, 
and the one on which Congress has focused most of its attention to 
date, is the risk of piracy. Digital technologies can greatly 
facilitate unlawful copying and distribution. This is a real problem, 
because people and companies that create copyrighted works must be 
fairly compensated. America's information-based economy depends on it.
  The second, closely related risk is that, in combating piracy, the 
baby will get thrown out with the bathwater. In the name of anti-piracy

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protections, legitimate consumer uses could be stifled. Encryption or 
other ``digital rights management'', DRM, schemes could be employed 
that restrict consumers' ability to take full advantage of the 
potential of the new digital technologies. In the end, it's not 
inconceivable that digital media could be more restricted and less 
flexible than other copyrighted items--an ironic result for a 
technology that was supposed to represent a great step forward for 
consumers.
  The bill I am introducing today focuses on this second risk. 
Significantly, it would not in any way dictate to content companies 
what types of copy protection or DRM schemes may or may not be used. 
Instead, it would ensure that consumers are fully informed of any 
impact on their ability to use and manipulate the content they buy.
  Advance notice of technology-based use limitations is a matter of 
basic fairness. Consumers have developed a number of legitimate 
expectations concerning how they may use and manipulate content, and 
are likely to develop new expectations as technology develops. For 
example, consumers increasingly expect to be able to shift legally 
purchased content between different devices--to access it on their 
computers, or in their cars, or using portable devices like MP3 
players. They should be told in advance if these expectations won't be 
met, so that they can factor this information into their purchasing 
decisions. Consumers should know what they are getting or not getting.
  In addition, I believe that imposing this kind of notice requirement 
will help promote the development of solutions that strike an 
appropriate and acceptable balance between protecting against piracy 
and preserving utility and flexibility for consumers. Overly 
restrictive approaches would require disclosures that content providers 
could find embarrassing, and consumers could be alienated by measures 
that don't seem to respect the importance of user flexibility. In 
short, full disclosure would strengthen the market-based incentive to 
avoid technologies that are too restrictive of consumer flexibility.
  My bill would also make a clear statement that Congress expects that 
there will be competition in the retail distribution of copyrighted 
digital content. This shouldn't be controversial: today, compact discs, 
books, and movie videos are distributed via many competing retail 
stores. They also often face competition with stores selling used 
content, and with rentals and libraries. But what if new DRM 
technologies permit copyright holders to limit or prevent the ability 
of unaffiliated entities to sell or distribute content on a secondhand 
basis? Could the copyright holder sharply reduce competition at the 
distribution level, and thus increase its market power? My legislation 
addresses this risk by expressing the sense of the Congress that it is 
important to retain competition among distribution channels for digital 
information and entertainment content.
  As the debate over digital copyright issues continues, I intend to 
listen to all sides. This country needs balanced approaches that 
respect the interests of copyright holders and consumers alike. But the 
bill I introduce today is a significant step that Congress could take 
now that would protect consumers of digital content and promote market-
based solutions, all without rewriting any copyright laws. I urge my 
colleagues to join me in this effort.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 692

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Digital Consumer Right to 
     Know Act''.

     SEC. 2. CONGRESSIONAL FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds the following:
       (1) Consumers have developed a number of legitimate 
     expectations concerning how they may use and manipulate 
     legally acquired information or entertainment content for 
     reasonable, personal, and noncommercial purposes. In 
     addition, as digital technology creates new ways to use and 
     manipulate content, consumers are likely to develop new 
     expectations that reflect the new technological 
     possibilities.
       (2) Digital technologies also can facilitate unlawful 
     reproduction and distribution of information or entertainment 
     content subject to copyright protection. To combat this 
     problem, technology and content companies are developing and 
     deploying technologies to prevent or deter such unlawful 
     behavior.
       (3) Such technologies could help promote a competitive 
     digital marketplace in which consumers have a broad range of 
     choices and media businesses can pursue a variety of business 
     models. However, there are also significant risks.
       (4) There is a risk that technologies developed to prevent 
     unlawful reproduction and distribution of digital information 
     and entertainment content could have the side effect of 
     restricting consumers' flexibility to use and manipulate such 
     content for reasonable, personal, and noncommercial purposes.
       (5) There is a risk that such technologies could unfairly 
     surprise consumers by frustrating their expectations 
     concerning how they may use and manipulate digital content 
     they have legally acquired.
       (6) There is a risk that such technologies could result in 
     greater market power for the holders of exclusive rights and 
     reduce competition, by limiting the ability of unaffiliated 
     entities to engage in the lawful secondhand sale or 
     distribution of such content.
       (b) Purposes.--The purposes of this Act are--
       (1) to ensure that consumers of digital information and 
     entertainment content are informed in advance of 
     technological features that may restrict the uses and 
     manipulation of such content, so that--
       (A) consumers may factor this information into their 
     purchasing decisions; and
       (B) there will be a strong, market-based incentive for the 
     development of technologies that address the problem of 
     unlawful reproduction and distribution of content in ways 
     that still preserve the maximum possible flexibility for 
     consumers to use and manipulate such content for lawful and 
     reasonable purposes; and
       (2) to express the sense of Congress concerning the 
     importance of retaining competition among distribution 
     channels for digital information and entertainment content.

     SEC. 3. FAIR DISCLOSURE OF TECHNOLOGICAL USE RESTRICTIONS.

       (a) FTC Rulemaking.--Not later than 1 year after the date 
     of enactment of this Act, the Federal Trade Commission shall 
     issue rules to implement the disclosure requirements 
     described in subsection (b).
       (b) Disclosure Requirements.--
       (1) In general.--If a producer or distributor of 
     copyrighted digital content sells such content or access to 
     such content subject to technological features that limit the 
     practical ability of the purchaser to play, copy, transmit, 
     or transfer such content on, to, or between devices or 
     classes of devices that consumers commonly use with respect 
     to that type of content, the producer or distributor shall 
     disclose the nature of such limitations to the purchaser in a 
     clear and conspicuous manner prior to such sale.
       (2) Manner of disclosure.--The Federal Trade Commission 
     shall prescribe the manner of disclosure required under this 
     subsection, which may include labels on packaging or such 
     other means as the Commission determines appropriate to 
     achieve the purposes of this section. The Commission may 
     prescribe different manners of disclosure for different types 
     of content and different distribution channels.
       (c) Disclosure of Certain Limitations on Reasonable 
     Consumer Activities.--The following are examples of 
     limitations which shall trigger the disclosure requirements 
     of subsection (b):
       (1) Limitations on the recording for later viewing or 
     listening (popularly referred to as ``time shifting'') of 
     audio or video programming delivered--
       (A) via free over-the-air broadcasting; or
       (B) as part of a multichannel video or audio system in 
     which the consumer obtains the programming as part of a 
     subscription package, with no per view charges and no ability 
     to select the specific time at which individual programs will 
     be delivered.
       (2) Limitations on the reasonable and noncommercial use of 
     legally acquired audio or video content--
       (A) in different physical locations of the consumer's 
     choice (popularly referred to as ``space shifting''); or
       (B) on the electronic platform or device of the consumer's 
     choice, including platforms or devices requiring that the 
     content be translated into a comparable format before such 
     use.
       (3) Limitations on making backup copies of legally acquired 
     content distributed in a form or medium that is subject to 
     accidental erasure, damage, or destruction in the ordinary 
     course of use, including through computer failure or computer 
     viruses, to be used only in the event that the original 
     copies are lost or damaged.
       (4) Limitations on using limited excerpts of legally 
     acquired content for purposes such as criticism, comment, 
     news reporting, teaching, scholarship, or research.
       (5) Limitations on engaging in the secondhand transfer or 
     sale of legally acquired content to another consumer, 
     provided that the transferor does not retain the content or 
     any copy thereof and that the transferee obtains only such 
     rights to the use and enjoyment of

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     the content as the transferor possessed at the time of 
     transfer.
       (d) Exception to Disclosure Requirement.--The Federal Trade 
     Commission shall not require disclosure under subsection (b) 
     with respect to any limitation that applies only to uses--
       (1) that are sufficiently unusual or uncommon that the 
     burdens of prior disclosure would outweigh the utility to 
     consumers; or
       (2) that have no significant application for lawful 
     purposes.
       (e) Annual FTC Review.--On an annual basis, the Federal 
     Trade Commission shall review the effectiveness of its rules 
     implementing this section to determine whether revisions are 
     warranted to serve the purposes of this section. In 
     conducting this review, the Commission shall consider whether 
     changes in technology or in consumer practices have led to 
     new, legitimate consumer expectations concerning specific 
     uses of digital information or entertainment content that 
     would result in consumers suffering unfair surprise if a 
     technology were to limit those uses without prior notice.

     SEC. 4. EFFECT ON OTHER LAWS.

       (a) No Limiting Effect on Fair Use.--Nothing in this Act 
     shall be interpreted to suggest that a consumer activity not 
     referred to in section 3(c) or in the Federal Trade 
     Commission's rules implementing this Act may not constitute a 
     fair use within the meaning of section 107 of title 17, 
     United States Code.
       (b) Unlawful Reproduction or Distribution.--Nothing in this 
     Act shall be interpreted to permit the otherwise unlawful 
     reproduction or distribution of copyrighted content or to 
     shield a person engaging in such activity from any type of 
     legal action or judgment.

     SEC. 5. COMPETITION IN DISTRIBUTION CHANNELS.

       It is the sense of Congress that--
       (1) competition among distribution outlets and methods 
     generally benefits consumers; and
       (2) just as copyright holders have sold content embodied in 
     tangible products such as audio cassettes, videotapes, and 
     compact discs to multiple competing retail distributors, 
     copyright holders selling digital content in electronic form 
     for distribution over the Internet should offer to license 
     such content to multiple unaffiliated distributors, to enable 
     competition among different distribution models and 
     technologies.
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