Distributed Computing
Industry Association

Statement of Martin C. Lafferty, CEO, Distributed Computing Industry Association (DCIA)
Before the Subcommittee on Commerce, Trade, and Consumer Protection Regarding "Online Pornography: Closing the Doors on Pervasive Smut"
Washington, DC
May 6, 2004


Chairman Stearns and Members of the Subcommittee, thank you for the opportunity to testify at this hearing. The Distributed Computing Industry Association (DCIA) is a trade organization, established in July 2003, for the purpose of commercially developing peer-to-peer file sharing and more advanced distributed computing applications for legitimate purposes. Our charter calls for representative membership among content providers, software suppliers, and platform companies. We currently have fifteen (15) members (listed alphabetically with links to their websites on the Join page at www.dcia.info) and are actively recruiting to expand our balanced and solutions-focused membership.

(1) The Internet is of immense value to society, particularly through its evolving and increasingly varied and decentralized usage as a tool for productivity, enabling exponentially faster and lower-cost means for connecting individuals globally, facilitating the exchange of all types of data, and creating a radically more efficient marketplace for commercial transactions. As with prior great communications inventions, Internet technology is neutral – facilitating communication without regard to whether content, or a transaction itself, may be deemed legal or illegal. Peer-to-peer file sharing, one of the newest advances of the Internet, is accomplished by client software search engines, returning queries from file directories, replacing costly and relatively slow centralized servers for both discovery and delivery of content, with an infinitely scalable number of participating PCs.

(2) Some content rights holders in the entertainment industries have failed to stay current with technology advancements, and not taken reasonable precautions to protect their products from unauthorized copying and online redistribution. They have confused the public by selectively enforcing their rights, and have boycotted prospective and willing new distributors rather than licensing them. In the absence of their broadly authorizing mainstream content online and labeling it to protect users from inadvertent exposure to inappropriate material, as in offline media, the Internet overall has attracted a disproportionate amount of pornographic content, and adequate safeguards to consumers are for the most part not yet being provided..

(3) Many computer users believe that the content they encounter on the Internet has been licensed and authorized as in other media that they routinely use such as television, radio, online subscription services, and various recording and playback devices. In Congressional hearings, computer users who have been sued by the record industry for alleged copyright infringement associated with online music redistribution, for example, have testified that they felt abused, prompting at least one US parent to sue the RIAA under RICO laws. Pornography on the Internet was initially limited by low bandwidth and limited sources. Those restrictions disappeared as modem speeds increased, broadband services proliferated, and pornography websites and chat-rooms multiplied. It has been challenging for Congress to balance consumer protection from undesired exposure with First Amendment rights issues. Credit-card routines intended to keep under-age users from accessing commercial pornography, for instance, have unfortunately proven easy to circumvent.

(4) More broadly, the dissemination of pornography, ranging from legal adult material to criminally obscene content, including the most pernicious category of child pornography, is facilitated online by such increasingly sophisticated electronic means as Internet browsers, search engines, e-mail, instant messaging, websites, peer-to-peer software, chat-rooms, and news groups, which technologies are now used regularly by tens of millions of US citizens.

(5) Such trafficking in pornography creates new challenges for content rights holders, computer manufacturers, software developers, and Internet service providers, to help protect minors from inadvertent exposure to such material online, and to educate the public, deter potential abusers, and enforce laws against dissemination of illegal material.

(6) In light of these considerations, responsible content providers and legitimate technology companies have an increasing opportunity to collaborate to protect consumers from inadvertent exposure to undesirable and illegal content, through appropriate and applicable technical solutions, business practices, and educational programs. All stakeholders should be encouraged to explore such measures in good faith as well as adopting business models for legitimate content to be digitally distributed.

(7) With the increasingly decentralized topology of the Internet, users themselves, including consumers of pornography, now serve frequently as the sources of content being entered into distribution, as well as being the recipients of it. Therefore, unfortunately, it is not remarkable that pornography is being distributed through many online technologies. As this activity has grown, it has become more difficult to obtain accurate data as to exact quantities and the precise nature of such content. Nevertheless, the following studies and reports demonstrate salient facts regarding such pornography on the Internet:

  • (A) April 2004 reports from Websense, Nilesen/NetRatings, BigChampagne, and WebSpins indicate that pornography websites have increased seventeen-fold (17X) from eighty-eight thousand (88,000) in 2000 to nearly one-million six-hundred thousand (1,600,000) today; thirty-four million (34,000,000) people or about one-in-four US Internet users visit them monthly, and thirty-seven percent (37%) have visited a porn-site at work; approximately four and one-half percent (4.5%) of downloaded peer-to-peer content is pornographic images, while approximately nineteen and three-tenths of a percent (19.3%) is pornographic videos.
  • (B) A November 2003 supplemental report from the General Accounting Office (GAO) to the Senate Judiciary Committee stated that the risks of inadvertent exposure to pornographic content using peer-to-peer file-sharing software are no greater than those posed by other uses of the Internet (such as browsers, e-mail applications, instant messaging, websites, chat-rooms, news groups, or commercial search engines). Some 840 instances of reported child pornography were attributed to peer-to-peer software usage out of a 62,000 yearly total. 45,035 were on the Web, 12,043 were by e-mail, and 1,128 were on Usenet bulletin boards.
  • (C) According to the National Center for Missing and Exploited Children (NCMEC), reported child pornography on peer-to-peer was down from 2% in 2002 to 1.4% in 2003, with the vast majority of the remaining 98%+ coming from websites and chat-rooms.
  • (D) Further, as confirmed by DCIA member reports, unlike websites, there is no commercial child pornography distributed by means of peer-to-peer applications.

(8) Thus, while the use of file sharing software for the distribution of pornography is regrettable, it is less of a problem than activity in many other online environments. Finally, the leading file-sharing software suppliers provide tools enabling parents to protect their children from exposure to undesirable content. Users can choose options to block adult content, which is the default setting, add more keywords to be blocked, prevent all video and images from being downloaded, and password-protect their filter settings. While parental controls designed for search engines and other Internet applications, or distributed as stand-alone programs, may not automatically work with peer-to-peer software applications, the customized filtering solutions that have been incorporated in the leading file-sharing software programs are unexcelled in the levels of protection they provide and are setting the standard. Use of these tools and monitoring of use by parents and custodians must remain the primary protection of children from inappropriate Internet content.

(9) Beyond the provision of parental control tools, leading peer-to-peer software companies have also worked cooperatively and proactively with law enforcement agencies on programs to facilitate prosecution of abusers of their technology, who attempt to distribute criminally obscene content. It should soon become apparent to distributors of such material that sharing it via peer-to-peer public folders is the best way to expose themselves to identification and prosecution. Leading peer-to-peer software companies are also working voluntarily on deterrence and education programs to further combat child pornography before enforcement actions are necessary. The DCIA, for example, is focusing its resources on a collaborative program to enable peer-to-peer users to recognize, report, and remove criminally obscene content from their computers.

(10) While no amount of child pornography can be tolerated, the charge made by entertainment interests that peer-to-peer software exposes even children conducting unfiltered searches to a greater amount of pornography than those using an unfiltered Internet search engine is unsupported by evidence. Furthermore, in contradiction to these disingenuous allegations, using family filters included with leading peer-to-peer software applications set at the maximum level, in direct refutation of specific entertainment industry allegations, no files retrieved on searches for popular terms like “Britney”, “Pokemon”, and “Olsen Twins,” will contain pornography, child pornography, or child erotica. By contrast, searching on these same terms using unfiltered search engines will yield many thousands of pornographic and criminally obscene results.

(11) Entertainment industry comparisons of relative growth of pornographic files are also misleading. Their cited peer-to-peer figures typically correspond to the period of greatest growth in the consumer adoption of peer-to-peer software and actually represent a more than fifty percent (50%) reduction in the complaint-to-user ratio. By contrast, websites, chat-rooms, news groups and bulletin boards, already well established and relatively mature, represented more than ninety-seven percent (97%) of reported incidents in this period. The record demonstrates that these issues have been and are being addressed, despite the greater challenges posed by a decentralized, user-generated file-sharing environment, resulting in a user experience comparable to, if not better than, that of surfing the Internet generally. While this concludes comments on the specific subject of this hearing, the following addresses other issues raised by the Subcommittee.

(12) The innovative companies developing and distributing publicly accessible file-sharing software have also responded to other issues identified by Congress and through self-regulatory processes by making steady improvements. Additional relevant examples of their commendable track record include the integration of strong anti-virus software with peer-to-peer file sharing applications, and the implementation of default settings and procedures to prevent inadvertent sharing of private or confidential data. Users can flexibly select the frequency of updating virus definitions; leading peer-to-peer companies promptly alert users of known attacks; and protected users help shield other users of file-sharing applications. With respect to safeguarding private information, current leading peer-to-peer software requires users to take multiple affirmative steps in order to share files that may include personal data. Peer-to-peer software suppliers have affirmed their commitment to further reduce risks and enhance both the safety and value of the user experience on behalf of their consumers and the public at large.

(13) The DCIA is currently addressing spyware/adware, in part by working with two DCIA member companies in the Center for Democracy & Technology (CDT) led Consumer Software Working Group (CSWG) since its inception. The DCIA also testified at the Federal Trade Commission’s workshop in April 2004. At this event, it was made a matter of public record that leading peer-to-peer file-sharing suppliers, in addition to integrating powerful anti-virus software, now also certify that their programs are spyware-free. In addition, these suppliers offer consumers a choice of paid or ad-supported versions of their programs, with no pop-up ads appearing in the paid versions. Targeted advertising in the ad-supported versions collects no personally identifiable information, provides clear attribution as to its source, and is up to 40 times more efficient than traditional online advertising, meaning far fewer intrusions for users. Notifications are provided to consumers pre-installation, at download, and during operation; and the uninstallation of peer-to-peer programs, along with any associated advertising software, follows the same standard add/remove procedure as other legitimate applications. The DCIA readily acknowledges that more needs to be done to achieve its goal of establishing best practices in this area, and welcomes the opportunity to also coordinate with Congress on this issue.

(14) As noted earlier, however, the real obstacle to realization of the full potential of peer-to-peer technology is the refusal of key content owners to license their content for legitimate, paid distribution via peer-to-peer file sharing. In this regard, the DCIA commends the Subcommittee for scheduling a hearing on HR 107 “The Digital Media Consumers’ Rights Act” on May 12, 2004, in contrast to the Judiciary IP Subcommittee’s introduction and reporting in a single day, with no hearing, of HR 4077, a measure that could criminalize millions of young Americans, given its vague negligence standards, for merely storing digital music on a networked device. The entertainment industries’ strategy is to combine their refusal to license content with their aggressive attempt to demonize peer-to-peer technology, in an attempt to crush what they erroneously view as a threat to their interests. This is the same time-dishonored strategy they tried in the futile fight against photocopiers, video recorders, and many other innovations that have brought great benefits both to consumers and to the companies that at first opposed them. And it is this which deserves to be the subject of Congressional investigation.

(15) DCIA members alone represent, with an average of 50 million licensed files now distributed monthly, the largest form of distribution of legally traded copyrighted music, movies, software, and video games on the Internet. This is accomplished primarily through agreements with small independent content suppliers, while the major studios and music labels continue their boycott of peer-to-peer. Nevertheless, licensed content distribution continues steadily to increase via peer-to-peer software programs. The challenges presented by digital content are indeed multifaceted, and no single response is sufficient. But among the different solutions that have been tried by the major music and movie rights holders, the most glaring omission is the most obvious one – providing consumers with legitimate choices in each digital medium, including peer-to-peer.

(16) However, the continuing failure of the major labels and movie studios to license the peer-to-peer distribution channel exposes these users to potential lawsuits from the record industry for copyright infringement. This is the only unique threat that users of these applications face, and Congress should urge major labels and movie studios to swiftly license their content for all digital media, including peer-to-peer, in furtherance of the public interest.

(17) The full potential of peer-to-peer technology to benefit consumers has yet to be realized, and will not be achieved until content rights holders license their copyrighted works on a non-discriminatory basis for legitimate distribution by means of file-sharing applications. The ongoing boycott by major music labels and movie studios poses an increasingly serious threat, causing substantial damage to consumers, who are being harassed and threatened unnecessarily with lawsuits; to their shareholders, to whom they are denying a promising new revenue stream; and to content creators, particularly the independent labels and filmmakers seeking to monetize their copyrighted works using peer-to-peer distribution channels. The widespread availability of unprotected content from the majors severely disadvantages the independents from competing to sell their products using this most advanced and cost-effective distribution method.

(18) The companies that develop and distribute peer-to-peer file-sharing software have made energetic efforts to license content from the major labels and movies studios, but have been consistently rebuffed, in what may constitute a collusive refusal to deal. Related to this, a technical amendment to HR 1417, providing a blanket anti-trust exemption for music in all digital media, was passed without hearing, resulting in a thousand-fold windfall benefit to record labels.

(19) The current legitimate digital music marketplace is inadequate to properly serve consumers. Pricing at now licensed online music stores, for example, is maintained at artificially high levels so as not to compete with offline CD sales through an entrenched distribution infrastructure. Online store technology represents an older generation, less efficient centralized architecture. The quantity and quality of digital files made available for online sale are kept low so as not to be competitive with CD sales. Comparatively few users access these stores and fewer purchase files from them. The legitimate digital music marketplace needs to be expanded to encompass current and future technologies, including not only the latest Internet-based application, peer-to-peer file sharing, but also future technologies, with the requirement that music rights holders, and copyright holders generally, who wish to monetize their content in the digital realm, license it on non-discriminatory terms for all digital media.

(20) Returning to the subject of this hearing, the entertainment industries are lobbying Congress with claims that file sharing is perilous to children and that peer-to-peer companies, though they have no control over user actions, should be responsible for the content of files some users independently share. At the same time, these entities intentionally and continuously bombard impressionable children and youth with shameful material. Major labels peddle hate-filled and reprehensible lyrics condoning, even promoting, criminal conduct, from drug trafficking and matricide to rape and theft. By their actions, these companies demonstrate they are motivated by a determination to protect their revenues and not by any tenderness for the young. Their conduct goes beyond unclean hands to a pernicious business model that should be reviewed by Congress as part of its media indecency initiative. Can it be that to incentivize the creation of a wide range of responsible entertainment we must at the same time make wealthy those bloodless cynics who shamelessly trade children’s innocence for money and who undermine values such as faithfulness, work, sacrifice, selflessness, tolerance and self-discipline? Is this what the framers of the Constitution had in mind when they authorized the creation of copyright laws?

(21) There can be no doubt that the ultimate motivation for such works is money. It cannot be supposed that any artist or corporate official has taken on partner abuse, child abandonment, robbery, date-rape, homicide, or revenge as social missions that they would pursue absent the lure of dollars. Yes, such expressions are protected under the First Amendment, but where is the policy that says we must also facilitate the enrichment of their creators and promoters by imposing draconian measures on the citizenry? While this last line of argument takes us beyond the parameters of this hearing, the astonishing hypocrisy of the entertainment industries in this regard had to be pointed out.

(22) A primary reason the DCIA has felt compelled to comment at such length is that the entertainment industries’ ongoing campaign to destroy the peer-to-peer software companies and to strangle file-sharing technology has gone largely unanswered. It is based upon the unproven assertion that labels and studios are suffering great economic damage through the copyright infringement of individual users. The DCIA’s mission is to develop and promote the legitimate uses of P2P functionality, and to help foster business models that make partners, rather than litigants, of content owners, technology companies, Internet service providers, peer-to-peer software companies, and consumers.

(23) The entertainment industries’ continuing emphasis on peer-to-peer pornography is unreflective of the much greater relative presence of pornography on the Web, and of the much greater ease of transmitting pornography via e-mail and instant messaging attachments, not to mention the far greater risks of criminally obscene content available on websites, and of predatory dangers in chat-rooms. And it is so dismissive of peer-to-peer providers’ efforts to work with law enforcement and to incorporate parental control software into their products that it starts to take on the character of a red herring. The inaccurate pornography charge too, is one of the pillars of the entertainment companies’ platform for destroying the nascent distributed computing industry, oblivious to the damage wrought by their own intentional and shameful role.

(24) Both copyright infringement and exposure of children to pornography are real problems, and we condemn them. However, we also encourage Congress to consider the possibility that the entertainment industries’ ceaseless chant of piracy, and their unbalanced and diversionary claim of pornography, are not such issues as demand an inexorable tightening of the legislative screws on millions of Americans, young and old, by an angry Congress on behalf of unworthy supplicants. Instead, we commend to you the idea that these campaigns, on which so much money and so many words have been spent, are excuses that serve the purpose of shielding poor management from investor scrutiny, and of substituting for a lack of strategic business vision and for a lack of artistic creativity, and for an inability to learn from the lessons of the past regarding the development of earlier media distribution technologies.

(25) How much more beneficial and constructive it would be for the United States and all of its citizens, and for the entertainment companies themselves and their shareholders, if as the next step in development of the new and rapidly changing decentralized digital distribution marketplace, Congress were to adopt an alternative along these lines: “To be effective on the date of initial publishing of a copyrighted work, any rights holder who wishes to monetize the digital redistribution of such work on the Internet and otherwise, shall be required to provide in advance terms and conditions on a non-discriminatory wholesale basis to all distributors, including software suppliers and individuals, who may wish to engage in such redistribution.” Once the law has been modified in such a way to ensure that the “carrot” of legitimate licensed content redistribution can be supported given the realities of technical advancements now affecting the topology of the Internet itself, then the “stick” of enforcement could reasonably be revisited, with more appropriate requirements for commercial parties who may then be expected to bear increased responsibilities for protecting the new forms of commerce so enabled. These would logically include appropriate labeling and warnings for adult content, actions to combat criminally obscene content, and other measures to fully legitimize online entertainment distribution.

Thank you for the opportunity to provide this testimony. We would be pleased to answer your questions and arrange a peer-to-peer technology demonstration at your convenience.

SUMMARY

DCIA is a trade association established 7/03 with 15 current content, P2P, and platform members.

(1) The Internet is a valuable productivity tool but neutral vis a vis content transfers/transactions.

(2) Entertainment companies have generally failed to keep pace with digital technology advances.

(3) Consumers are confused about what’s legitimate in entertainment content they find online.

(4) Pornography is accessible through a variety of Internet applications used by 10s of millions.

(5) This creates challenges for content, hardware, software, and ISP sectors to protect minors.

(6) Technical solutions, business practices, and educational measures are needed to address this.

(7) Consumers themselves increasingly introduce pornographic content into online distribution.

(8) In response, P2Ps now lead tech sector in providing powerful family filters to protect children.

(9) Leading P2Ps work cooperatively and proactively on deterrence, education, and enforcement.

(10) P2P represents a very small and declining percentage of criminally obscene content online.

(11) Websites and chat-rooms are the most dangerous sources of child pornography at 98+%.

(12) Leading P2Ps have added strong anti-virus software and private-data-protection measures.

(13) Leading P2Ps distribute no spyware and are working to ensure best practices for adware.

(14) Real obstacle to legitimate development is P2P boycott by major labels and movie studios.

(15) DCIA members are largest licensed online content distributors but with small independents.

(16) Only unique threat to P2P users is of infringement lawsuit from RIAA due to its label boycott.

(17) What is needed is non-discriminatory licensing of major entertainment content for P2P.

(18) P2Ps have tried to negotiate but been rebuffed forcing adoption of inferior business models.

(19) Current legitimate online content market is purposely non-competitive with offline channels.

(20) Entertainment industries do not have clean hands vis a vis their involvement in pornography.

(21) Part of solution might be to not support monetization of pornography with new measures.

(22) The entertainment industries are attempting to distract interested parties from core issues.

(23) Their emphasis on P2P does not reflect primary sources of online porn and is a red herring.

(24) Copyright infringement and pornography are real concerns that DCIA is seeking to address.

(25) Solution is for content rights holders to license content for distribution by all digital media.

Please feel free to ask questions and to arrange a P2P technology demonstration. Thank you

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