IT’S THE MONEY, STUPID - The next Enron
by Greg Gibson

One of the impediments to full use/benefits from the introduction of High Definition (HD) technology into the marketplace is the “side-show” war being waged by Hollywood. Hollywood is “concerned” that legitimate intellectual property rights (i.e., royalties for movies, songs, etc.) can be stolen in “quality-format” from HD broadcasts, and immediately distributed worldwide via the Internet. As a result, Hollywood interests have been lobbying for copyright protection to require exotic digital scrambling and encrypting methods to prevent copying, and even has proposed (and Congress is considering) a special tax on digital-recording devices that would be returned to them.

If you have ever had an early VCR, you realize that copy protection often causes picture degradation (to the point of become unusable). Worse, adding a “tax/fee” to digital VCRs (and giving the money to Hollywood) punishes every consumer for something they did not do.

Importantly, there is the significant likelihood of a Hollywood scam here, which would rival ENRON and WORLDCOM. Suppose you go to Congress and “testify” that your Industry needs this tax on HD-VCRs to recoup a trillion dollars that you “magically” calculate to be your lost revenue [recall the old adage that “Figures lie and liars figure”]… if Congress buys it, you now have a “cash-stream” and permanent major income. Suppose however, that you really didn’t “lose a trillion dollars” – that it was only $50… you have basically embezzled the consumer into paying for “stolen rights and theoretical lost revenue” - which cannot be quantified with any precision.

Clearly, there is a dilemma here – copyright protection is vital and fundamental. If everyone rips-off the inventor/creator/artist/publisher then no one will create anything.

That is why there are National and International copyright laws, and criminal and civil penalties for stealing and reproducing copyright protected works! Congressional focus should be on the FBI (recall the warning at the beginning of every DVD and VHS tape) for not aggressively identifying and prosecuting copyright law violations.

Commentary By: Greg Gibson - email