Jan. 23 (Bloomberg) -- The collapse of anti-piracy bills in Congress has left Hollywood studios searching for a compromise with Internet companies after an online protest by Google Inc. and Wikipedia unraveled support for the legislation.
A decision by congressional leaders to shelve the House and Senate measures marked a defeat for the Motion Picture Association of America and its chairman, Christopher Dodd. The Hollywood lobbying group had built bipartisan backing for the legislation before unprecedented Web opposition prompted at least 13 co-sponsors to abandon the bills.
Dodd, a 30-year veteran of the Senate who joined the MPAA last year, said that he welcomed “a sincere discussion” about piracy, while Markham Erickson, executive director of technology industry group NetCoalition, said the hiatus offers “a chance to reset the dialogue.” Both sides have said they agree on the need to curb online theft of copyrighted materials such as new movie releases and popular televisions shows.
“Somewhere between the hysteria of the last few days and the tunnel vision of the Hollywood and the music industry, lies a solution,” Tom Giovanetti, president of the Institute for Policy Innovation, a Lewisville, Texas-based research firm, said in an interview. “The real problem is both sides just brought out their big guns.”
The anti-piracy bills would have allowed the Justice Department to seek court orders forcing Internet-service providers, search engines, payment processors and online ad networks to block or stop doing business with non-U.S. sites linked to selling counterfeit goods. The measures would also have let private copyright holders seek court orders forcing payment and ad companies to cut off such websites.
Internet companies, including Google and Facebook Inc., had said the Hollywood-backed bills would hinder innovation, chill free expression, and disrupt the Web’s functioning.
The Internet industry is willing to work with copyright owners and content producers to resolve their concerns, said Erickson. Members of his Washington-based NetCoalition include Google, Yahoo! Inc. and Bloomberg LP, the parent company of Bloomberg News.
“There are principles in the proposed bills that we’ve always said are worth building on,” he said. “The concern had been the proposals went way too far.”
Erickson said his group favors severing financial support to “rogue” websites outside the U.S., by cutting their links to advertising and payment services such as Visa Inc. and PayPal Inc., if the sites are found by a court to be unlawful due to an action by the U.S. Attorney General.
Google, Facebook and other companies have rallied around alternative legislation introduced by Senator Ron Wyden, an Oregon Democrat, and Representative Darrell Issa, a California Republican. That bill, the Open Act, would make the U.S. International Trade Commission the arbiter of complaints about piracy by non-U.S. websites.
The MPAA criticized the alternative bill in a Jan. 11 statement, saying the measure defines “rogue” websites too narrowly and does not require any action by search engines. The group questioned the ITC as a venue, saying the agency may be too slow and put artists at a disadvantage by requiring them to travel to Washington rather than their local federal court.
The movie and music industries and the U.S. Chamber of Commerce, the nation’s largest business-lobbying group, had supported the Senate’s Protect IP Act and the House’s Stop Online Piracy Act as a way to fight sales of pirated content by non-U.S. websites.
The administration of President Barack Obama cast doubt over the Hollywood-backed legislation’s prospects on Jan. 14, saying in a blog post before the Web protest that it wouldn’t support measures that encourage censorship or disrupt the structure of the Internet.
Google, owner of the world’s most popular search engine, said more than 7 million U.S. residents used the site to petition Congress to reject the legislation during its Jan. 18 Web protest. Visitors to Google’s home page were greeted that day by a black box covering the company’s familiar icon, and a message that read “Tell Congress: Please don’t censor the Web!”
All four Republican presidential candidates said during a televised debate on Jan. 19 they opposed the House version. The bill would “have a potentially depressing impact on one of the fastest growing industries in America, which is the Internet, and all those industries connected to it,” former Massachusetts Governor Mitt Romney said.
White House Summit
A day later, Senate Majority Leader Harry Reid, a Nevada Democrat, canceled a procedural vote on the Senate measure, the Protect IP Act, after Minority Leader Mitch McConnell, a Kentucky Republican, called for a delay. House Judiciary Committee Chairman Lamar Smith, a Texas Republican, said his panel would postpone consideration of the House bill.
As support dissolved, Dodd said in an interview with the New York Times that he would welcome a summit between Internet companies and content companies, possibly at the White House.
“The perfect place to do it is a block away from here,” Dodd said, pointing from his office toward the executive mansion, the Times reported.
Asked about the possibility of a White House summit on piracy as Dodd suggested, Obama administration spokesman Jay Carney didn’t directly respond at a Jan. 20 briefing, saying the White House made its principles clear before the protests.
“This is a legislative process that folks on the Hill can take up, working with those with strong opinions on both sides of the issue,” Carney said.
--With assistance from Laura Litvan, Tom Schoenberg, Derek Wallbank and Roger Runningen in Washington and Michael White in Los Angeles. Editors: Steve Walsh, David Ellis
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