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



 
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                                 HEARING

                                BEFORE THE

                     SUBCOMMITTEE ON COMMERCE, TRADE, 
                          AND CONSUMER PROTECTION

                                  OF THE 

                          COMMITTEE ON ENERGY AND 
                                 COMMERCE

                          HOUSE OF REPRESENTATIVES


                         ONE HUNDRED NINTH CONGRESS

                               SECOND SESSION

                                   -------
                            SEPTEMBER 26, 2006


                                   -------
                            Serial No. 109-144

                                   -------

         Printed for the use of the Committee on Energy and Commerce


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                     COMMITTEE ON ENERGY AND COMMERCE
JOE BARTON, Texas, Chairman               MARSHA BLACKBURN, Tennessee               
RALPH M. HALL, Texas                      JOHN D. DINGELL, Michigan
MICHAEL BILIRAKIS, Florida                  Ranking Member
  Vice Chairman                           HENRY A. WAXMAN, California
FRED UPTON, Michigan                      EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida                    RICK BOUCHER, Virginia
PAUL E. GILLMOR, Ohio                     EDOLPHUS TOWNS, New York
NATHAN DEAL, Georgia                      FRANK PALLONE, JR., New Jersey
ED WHITFIELD, Kentucky                    SHERROD BROWN, Ohio
CHARLIE NORWOOD, Georgia                  BART GORDON, Tennessee
BARBARA CUBIN, Wyoming                    BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois                    ANNA G. ESHOO, California
HEATHER WILSON, New Mexico                BART STUPAK, Michigan
JOHN B. SHADEGG, Arizona                  ELIOT L. ENGEL, New York
CHARLES W. "CHIP" PICKERING,  Mississippi ALBERT R. WYNN, Maryland
  Vice Chairman                           GENE GREEN, Texas
VITO FOSSELLA, New York                   TED STRICKLAND, Ohio
ROY BLUNT, Missouri                       DIANA DEGETTE, Colorado
STEVE BUYER, Indiana                      LOIS CAPPS, California
GEORGE RADANOVICH, California             MIKE DOYLE, Pennsylvania
CHARLES F. BASS, New Hampshire            TOM ALLEN, Maine
JOSEPH R. PITTS, Pennsylvania             JIM DAVIS, Florida
MARY BONO, California                     JAN SCHAKOWSKY, Illinois
GREG WALDEN, Oregon                       HILDA L. SOLIS, California
LEE TERRY, Nebraska                       CHARLES A. GONZALEZ, Texas
MIKE FERGUSON, New Jersey                 JAY INSLEE, Washington
MIKE ROGERS, Michigan                     TAMMY BALDWIN, Wisconsin
C.L. "BUTCH" OTTER, Idaho                 MIKE ROSS, Arkansas                       
SUE MYRICK, North Carolina
JOHN SULLIVAN, Oklahoma
TIM MURPHY, Pennsylvania
MICHAEL C. BURGESS, Texas

                    BUD ALBRIGHT, Staff Director
                   DAVID CAVICKE, General Counsel
    REID P. F. STUNTZ, Minority Staff Director and Chief Counsel


     SUBCOMMITTEE ON COMMERCE, TRADE, AND CONSUMER PROTECTION
                  CLIFF STEARNS, Florida, Chairman
FRED UPTON, Michigan                      JAN SCHAKOWSKY, Illinois
NATHAN DEAL, Georgia                        Ranking Member
BARBARA CUBIN, Wyoming                    MIKE ROSS, Arkansas
GEORGE RADANOVICH, California             EDWARD J. MARKEY, Massachusetts
CHARLES F. BASS, New Hampshire            EDOLPHUS TOWNS, New York
JOSEPH R. PITTS, Pennsylvania             SHERROD BROWN, Ohio
MARY BONO, California                     BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                       GENE GREEN, Texas
MIKE FERGUSON, New Jersey                 TED STRICKLAND, Ohio
MIKE ROGERS, Michigan                     DIANA DEGETTE, Colorado
C.L. "BUTCH" OTTER, Idaho                 JIM DAVIS, Florida
SUE MYRICK, North Carolina                CHARLES A. GONZALEZ, Texas
TIM MURPHY, Pennsylvania                  TAMMY BALDWIN, Wisconsin
MARSHA BLACKBURN, Tennessee               JOHN D. DINGELL, Michigan
JOE BARTON, Texas                           (EX OFFICIO)                            
  (EX OFFICIO)


                                CONTENTS


                                                                       Page
Testimony of:
     Aho, Bill, Chief Executive Officer, ClearPlay, Inc.	        12
     Erb, Allan L., President, CleanFlicks Media, Inc.	                17
     Feehery, John, Executive Vice President, External Affairs, 
          Motion Picture Association of America	                        21
     Bronk, Robin, Executive Director, The Creative Coalition	        25
     Schultz, Jason, Staff Attorney, Electronic Frontier Foundation	28



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                                 -------
                     TUESDAY, SEPTEMBER 26, 2006

                      HOUSE OF REPRESENTATIVES,
                  COMMITTEE ON ENERGY AND COMMERCE,
                   SUBCOMMITTEE ON COMMERCE, TRADE, 
                       AND CONSUMER PROTECTION,
                                                           Washington, DC.


        The subcommittee met, pursuant to call, at 2:06 p.m., in Room 2322 
of the Rayburn House Office Building, Hon. Cliff Stearns (Chairman) 
presiding.
        
	Members present:  Representatives Radanovich, Bass, Murphy, 
Blackburn, Barton (ex officio), Schakowsky and Green.
	Staff present: Chris Leahy, Policy Coordinator; Will Carty, 
Professional Staff Member; Shannon Weinberg, Counsel; Brian 
McCullough, Professional Staff Member; Jonathon Cordone, Minority 
Counsel; Jonathan Brater, Minority Staff Assistant; and Billy Harvard, 
Legislative Clerk.
	MR. STEARNS.  Good afternoon.  The subcommittee will come to 
order.
	Our hearing today, in very simple terms, is about control--the control 
of an artist, in this case, a filmmaker, over artistic expression and the 
control of parents over the content of that artistic impression for home 
viewing by their children and their families.
	I believe there is no greater job than being a parent caring for your 
children and families as best you can.  In a society that is absolutely 
saturated with media content on television, on the Internet, on the radio, 
the movies, empowering parents and giving them more control over what 
their children hear, see and read is becoming increasingly difficult, 
challenging, but again is exceedingly important.  Year after year parental 
controls have become more and more complicated.  Although I think the 
MPAA ratings system has done a pretty good job over the years, other 
industry ratings systems seem to get more and more confusing and a lot 
less rigorous at examining the content the consumer actually will be 
exposed to.
	There is no better way to empower parents and provide them the 
control they deserve than by allowing them access to the technology and 
products that filter out sex, violence and other objectionable material 
they believe their kids can do without.  In fact, I doubt there is a parent 
out there who wouldn't welcome a little extra help protecting their 
children from this pervasive violence and sex in the media that touches 
their children almost every day.  It is about time we provide parents a bit 
more involvement in the decision-making about what their children see 
in movies rather than surrendering that extremely important 
responsibility exclusively to others with different priorities.
	I think the steps made in the Family Entertainment Copyright Act of 
2005 were in the right direction and gave parents more power and control 
to protect their children from objectionable content by, for example, 
allowing ClearPlay's filtering technology.  Today I would like to 
understand better why and how CleanFlick's approach of editing a 
legally-purchased copy of a movie for violent and sexual content and 
selling it as a clearly labeled edited copy at a higher price would hurt or 
hinder Hollywood's bottom line and artistic expression.  These edited 
copies are viewed privately and they are purchased legally.  It seems that 
these products simply allow parents to protect their children from 
inappropriate content without having to wear out the fast forward button 
on the DVD player or buy more-expensive filtering technology.
	My focus today is also to address how and why these innovative 
approaches and technologies that help better protect children from 
violent and sexual content can hurt content producers' bottom line and 
creativity other than giving American parents more control over their 
bottom-line responsibility when it comes to reviewing what is present in 
the movies they view with their children in their own home.  The fact is 
that the released films are all available to view in their entirety without 
edit if one simply chooses to do so.
	As I have said many times during a number of our hearings on fair 
use and content regulation, I believe technology can provide a solution 
that will satisfy the rights both financial and artistic of content producers 
like the filmmakers and studios as well as provide parents with the 
control they deserve over the content they purchase for family viewing in 
their own homes.  In fact, by providing this control of content to family 
consumers, some have argued that you are opening up a whole new 
potential market for artistic work rather than waiting for something to 
start appearing in the wild of the Internet or on the black market.  So I 
think pushing the market to find more novel ways to provide parents 
more control over what their children watch in movies is essential as 
media content, both the best and the worst, slowly finds its way into 
every facet of our lives and into the lives of our children.
	I would like to say that we did invite the head of the Motion Picture 
Association, Mr. Dan Glickman, to be here and the Directors Guild of 
America to be with us today but unfortunately they declined, and I called 
Mr. Glickman personally.  Therefore, I would like to especially thank all 
of you for joining us today and particularly the person representing the 
Motion Picture Association, Mr. Feehery, for his kindness in coming and 
standing in for Mr. Glickman.
	So this is an important issue and I appreciate all of you being here 
and I look forward to the testimony of our distinguished panel.
	With that, I recognize the Ranking Member, Ms. Schakowsky.
	[The prepared statement of Hon. Cliff Stearns follows:]

PREPARED STATEMENT OF THE HON. CLIFF STEARNS, CHAIRMAN, SUBCOMMITTEE ON 
COMMERCE, TRADE, AND CONSUMER PROTECTION

	Good afternoon.  Our hearing today, in very simple terms, is about 
control - the control of an artist, in this case a filmmaker, over artistic 
expression, and the control of parents over the content of that artistic 
expression for home viewing by their children and families.  I believe there 
is no greater job than being a parent and caring for your children 
and families as best as you can.  In a society that is absolutely saturated 
with media content - on television, on the Internet, on the radio, and in the 
movies - empowering parents and giving them more control over what their 
children hear, see, and read is becoming increasingly challenging but 
exceedingly important.  Year after year, parental controls have become more 
and more complicated.  Although I think the MPAA ratings system has done a 
pretty good job over the years, other industry content ratings systems 
seem to get more and more confusing and a lot less rigorous at examining the 
content the consumer actually will be exposed to.  There is no better way to 
empower parents and providing them the control they deserve than by allowing 
them access to the technology and products that filter out sex, violence, and 
other objectionable material they believe their kids can do without.  In fact, 
I doubt there is a parent out there who wouldn't welcome a little extra of 
help protecting their children from the pervasive violence and 
sex in the media that touches their children every day.  And let's be honest, 
it's about time we provide parents a bit more involvement in the decision 
making about what their children see in movies rather than surrendering that 
extremely important responsibility exclusively to others with different priorities.  
        I think the steps made in the Family Entertainment Copyright Act of 
2005 were in the right direction and give parents more power and control to 
protect their children from objectionable content by, for example, allowing ClearPlay's filtering technology.  Today, I'd like to understand better why 
and how Clean Flick's approach of editing a legally-purchased copy of a movie 
for violent and sexual content and selling it as an clearly-labeled edited 
copy  at a higher price hurts Hollywood's bottom line and artistic expression.  
These edited copies are viewed privately and purchased legally.  It seems 
that these products simply allow parents to protect their children from 
inappropriate content without having to wear out the fast forward button on 
the DVD player or buy more expensive filtering technology.  
        My focus today is also to address how and why these innovative 
approaches and technologies that help better protect children from violent and 
sexual content can hurt content producers' bottom line and creativity, other 
than giving America's parents more control over their bottom-line 
responsibility when it comes to reviewing what is presented in the movies they 
view with their children at home.  The fact is that the released films are all 
available to view in their entirety without edits, if one chooses. As I 
have said many times during a number of our hearings on fair-use and content 
regulation, I believe technology can provide a solution that will satisfy the 
rights, both financial and artistic, of content producers -- like the 
filmmakers and studios, as well as provide parents with the control they 
deserve over the content they purchase for family viewing in their 
homes.  In fact, by providing this control of content to family consumers, 
some have argued that you are opening up a whole new potential market for 
artistic work, rather than waiting for something similar to start appearing in 
the wild of the Internet or on the black market.  I think pushing the market 
to find more novel ways to provide parents more control over what their 
children watch in movies is essential as media content, both the 
best and the worst, slowly finds its way into every facet of our lives and 
into the lives of our children. 
        I would like to say that we did invite the head of the Motion Picture 
Association of America, Mr. Dan Glickman, and the Directors Guild of America 
to be with us today, but unfortunately each declined our invitation. 
Therefore, I would like to especially thank all of you for joining us today, 
including Mr. Feehery - who is standing in for Mr. Glickman.  This is a very 
important issue and I look forward to the testimony of this distinguished panel.
        Thank you.

	MS. SCHAKOWSKY.  Thank you, Mr. Chairman.  By exploring 
movie-editing technology, our subcommittee is once again grappling 
with digital content and fair use.  I must say I am a bit perplexed as to 
why we are holding today's hearing.  Many of the issues that we will be 
discussing have already been addressed by the courts and Congress last 
year.  We have given families tools to help filter out inappropriate movie 
content and the courts have ruled on what they felt fell outside the 
bounds of fair use.  I certainly hope that today's hearing is not just 
election-year politics.
	With that said, the ever-expanding flow of artistic material through a 
variety of media, from hand-held DVD players to iPods, has been a 
mixed blessing.  While those developments have meant that families 
have more opportunities to enjoy movies, there are also increased risks 
that children may be seeing and hearing more than we think they should.
	I think we can all agree that parents should be the first line of 
defense and are the best equipped to decide what movies their children 
should be allowed to watch.  I am sure that many parents and 
grandparents think long and hard about what is appropriate content to 
which their children and grandchildren should be exposed.  I know that I 
do.
	Many families, in their fight to protect their children from what they 
deem inappropriate, have been using advances in technology to limit the 
content that comes across their television screens.  While I am a strong 
proponent of consumers' right to fair use of products that they have 
purchased, I believe that some companies have been trying to stretch the 
application of fair-use principle too far.
	For instance, it cannot be argued, in my view, that re-editing and 
reselling a copyrighted movie, creating a derivative work without the 
express permission of the copyright holder, is within the boundaries of 
fair use. The U.S. District Court of Colorado, in its decision against 
CleanFlicks on July 6, 2006, said that this is a clear case of copyright 
infringement.  I agree.
	The passage last April of Public Law 109-9, the Family 
Entertainment and Copyright Act, provided a safe harbor for ClearPlay, 
legislatively determining that its technology fell within fair-use rights at 
a time when the issue was being litigated.  While I think it would have 
been better for Congress to let the courts decide, it does now seem that 
ClearPlay comes closer to striking a better balance than CleanFlicks 
does.  ClearPlay devices do not create a fixed or derivative copy of a 
protected work.  Its filtering technology functions like advanced fast 
forward and mute buttons while leaving the original material intact.  It 
gives consumers a greater amount of control by allowing families to set 
their own preferences as to which parts of a movie are shown.  If they 
don't want sex and violence, they can program that request into 
ClearPlay's control.  If they choose not to hear certain words, they can 
request that as well, and as children age if families decide to allow more 
of the content to be played, since the movie is still in its original form, 
they can change their settings.  ClearPlay's technology is not perfect.  
While it may catch some material a family objects to, some may slip 
through the filter.  That is why family involvement is still needed.  And, 
in the attempt to shelter children from objectionable material, the 
storyline, the mood and the artistic vision of the original product may be 
lost.
	Although it is easy to get caught up in what technology can do for 
families, I think it is also important to remember that movies are rated for 
generally accepted age-appropriateness.  When movies are made, the 
director decides whether he wants to appeal to all and make a G-rated 
movie or if he wants to make a movie that receives a more restricted 
rating.  More than technology and a for-profit company, if parents are 
concerned about what children are seeing, they can start by checking out 
the rating.
	I look forward to hearing from witnesses today.  Perhaps you can 
help me understand the need for today's hearing.  Thank you.
	[The prepared statement of Hon. Jan Schakowsky follows:]

PREPARED STATEMENT OF THE HON. JAN SCHAKOWSKY, A REPRESENTATIVE IN CONGRESS 
FROM THE STATE OF ILLINOIS

        Thank you, Mr. Chairman.  By exploring movie-editing technology, our 
subcommittee is once again grappling with digital content and fair use.  I 
must say that I am a bit perplexed as to why we are holding today's hearing.  
Many of the issues that we will be discussing have already been addressed by 
the courts and Congress last year.  We have given families tools to help 
filter out inappropriate movie content and the courts have ruled on what they 
felt fell outside the bounds of fair use.  I certainly hope that today's 
hearing is not just election year politics.   
        With that said, the ever-expanding flow of artistic material through a 
variety of media - from hand-held DVD players to i-pods - has been a mixed 
blessing. While those developments have meant that families have more 
opportunities to enjoy movies, there are also increased risks that children 
may be seeing and hearing more than we think they should.  
        I think we can all agree that parents should be the first line of 
defense and are the best equipped to decide what movies their children should 
be allowed to watch.  I am sure that many parents and grandparents think long 
and hard about what is appropriate content to which their children and 
grandchildren should be exposed.
        Many families, in their fight to protect their children from what they 
deem inappropriate, have been using advances in technology to limit the 
content that comes across their television screens.  While I am a strong 
proponent of consumers' right to fair use of products they have purchased, I 
believe that some companies have been trying to stretch the application of the 
fair use principle too far. 
        For instance, it cannot be argued that re-editing and reselling a 
copyrighted movie, creating a derivative work without the express permission 
of the copyright holder, is within the boundaries of fair use.  The U.S. 
District Court of Colorado, in its decision against Clean Flicks on July 6, 
2006, said that this is a clear case of copyright infringement.  I agree.
        The passage last April of Public Law 109-9, the Family Entertainment 
and Copyright Act, provided a safe harbor for ClearPlay, legislatively 
determining that its technology fell within fair use rights at a time when the 
issue was being litigated.  While I think it would have been better for 
Congress to let the courts decide, it does seem that ClearPlay comes closer to 
striking a better balance than Clean Flicks does.  ClearPlay devices do not 
create a fixed - or derivative - copy of a protected work.  Its filtering 
technology functions like advanced fast forward and mute buttons while leaving 
the original material intact.   It gives consumers a greater amount of control 
by allowing families to set their own preferences as to which parts of a movie 
are shown.  If they do not want sex and violence, they can program that 
request into ClearPlay's control.  If they choose not to hear certain words, 
they can request that as well.  And, as children age, if families decide to 
allow more of the content to be played, since the movie is still in its 
original form, they can change their settings.  
        ClearPlay's technology is not perfect.  While it may catch some 
material a family objects to, some may slip through the filter.  That's why 
family involvement is still needed.  And, in the attempt to shelter children 
from objectionable material, the storyline, the mood, and the artistic vision 
of the original product may be lost.  
        Although it is easy to get caught up in what technology can do for 
families, I think it is also important to remember that movies are rated for 
generally-accepted age-appropriateness. When movies are made, the director 
decides whether he wants to appeal to all and make a G-rated movie - or if he 
wants to make a movie that receives a more restrictive rating.  More than 
technology and a for-profit company, if parents are concerned about what children are seeing, they can start by checking out the rating.    
        I look forward to hearing from today's witnesses.  Perhaps you can 
help me understand the need for today's hearing.  Thank you.

	MR. STEARNS.  I thank the gentlelady.  The distinguished chairman 
of the full committee, Mr. Barton from Texas.
	CHAIRMAN BARTON.  Thank you, Mr. Chairman.
	The debate about consumers' and copyright holders' rights has been 
an important one for at least the last 200 years since the Constitutional 
Convention adopted the U.S. Constitution.  The decision to grant 
exclusive rights of creative works to their creators has been a great 
strength of our economy and of our country.  The discussion about those 
rights and their limits started many years ago and continues today in this 
Congress and this subcommittee.
	Today we are here to talk about Hollywood, artistic expression, fair-
use rights and so-called edited movie industries.  This hearing comes at a 
good time, I believe.  Last year, the Family Entertainment and Copyright 
Act became a public law.  Earlier this past summer a court decision was 
handed down that dealt with that law.  We are here today to learn more 
about those developments and what they mean for consumers, for parents 
and for families.
	Let us say that I buy a DVD.  I believe that I can take it home and 
make an edited version of my own to watch with my family.  Now, if I 
don't have the technical ability to make the edited vision, I believe that I 
should be able to ask someone to do it for me.  Can I pay that someone 
$5 or $10 or a similar amount for doing so?  If so, can my neighbor buy, 
and I emphasize the word "buy," an authorized copy and then sell me an 
edited version of that authorized copy?  That is really what we are here to 
talk about.
	I am very sympathetic to the movie industry's sense of creative 
ownership and with their fear of losing control over their work.  That 
said, in this area of TiVo and YouTube, in which consumers increasingly 
produce, manipulate and consume culture on their own digitized terms, 
an audience no longer passively consumes culture.  The audience has a 
mind of its own, and often ignores the creator's intentions.  Fast 
forwarding a movie or skipping songs on a CD is the reality of the digital 
world and it is a reality that consumers like and have come to expect.
	Many of these consumers are fed up with what they view as 
gratuitous sex, drug use and violence in the movies.  Two of our 
witnesses today have set out to serve these consumers by developing 
creative, technologically advanced ways to clean up these movies.  I 
believe that we need to be careful that the copyright owners and creative 
artists of our country are not harmed in that process but I also understand 
that it would serve the potential audience in a larger manner if we could 
find a common ground that everybody could agree upon.  I am anxious to 
hear about what options parents and others have in this growing market.  
It is a puzzlement to me that the movie industry itself doesn't offer edited 
versions of their movies like those that are played on the television or on 
airlines.  It would seem that that would expand their pie and give them 
more dollars with which to make more movies.
	I am also interested to learn from the movie perspective how this 
niche market that CleanFlicks and ClearPlay have developed has affected 
the industry.  Has it widened the pool of possible potential customers for 
the movies that are made in America?  Many who previously weren't 
buying or renting movies might have become customers for these edited, 
cleaned-up versions.  Why then have many of the industry attempted and 
indeed succeeded as this court case last summer points out in prohibiting 
some of these businesses from doing what they want to do?  From a 
business standpoint, this strategy of limiting the market to me doesn't 
seem to make much sense.  It only limits their sales.
	Having said that, a copyright is a time-honored and essential 
concept.  We must protect creators' rights and private property rights.  I 
understand that.  I would hope that in doing that though we don't curtail 
those consumers particularly when the consumers who wish a cleaner 
version are willing to pay their hard-earned dollars if they can get the 
basic movie content, just get it without all the gratuitous sex, violence 
and drugs.
	This is an important hearing, Mr. Chairman.  I want to thank you for 
holding it.  I look forward to hearing from our witnesses, and I am sure 
we will have a spirited discussion in the question-and-answer period.
	With that, I yield back.
	[The prepared statement of Hon. Joe Barton follows:]

PREPARED STATEMENT OF THE HON. JOE BARTON, CHAIRMAN, COMMITTEE ON ENERGY 
AND COMMERCE

        Good afternoon.  Thank you, Chairman Stearns, for holding this 
hearing.  The debate about consumers' and copyright holders' rights has been 
an important one in our country at least since 1787 when the Constitutional 
Convention adopted The U.S. Constitution.  The decision to grant exclusive 
rights of creative works to their creators has been a great strength of our 
economy and our Nation.  The discussion about those rights and their limits 
started those many years ago, and it continues today in this Congress and in 
this Committee.
        Today, we're here to talk about Hollywood, artistic expression, fair 
use rights, and the so-called "edited movie" industry.  And this hearing comes 
at a perfect time.  Last year, the Family Entertainment and Copyright Act 
became a public law, and earlier this past summer a court decision was handed 
down that dealt with similar issues.  We're here today to learn more about 
what these developments mean for consumers, for parents and families.
        Let's say I buy a DVD.  I believe I can legally take it home and make 
an edited version of my own to watch with my family.  Now if I don't have the 
technical ability to do this, I believe I should be able to ask my tech-savvy 
neighbor to do it for me.  Can I pay him $5 or $10 dollars for doing it?  If 
so, can my neighbor buy an authorized copy for $15 and then sell me an edited 
version for $20?  This is what is at the heart of the issue.
        I am very sympathetic with the movie industry's sense of creative 
ownership and with their fear of losing control over their work.  That said, 
in this era of TiVo and YouTube-in which consumers increasingly produce, 
manipulate and consume culture on their own terms-an audience no longer 
passively consumes culture.  The audience has a mind of its own, and often 
ignores the creator's intentions.  Fast forwarding a movie or skipping songs 
on a CD is the reality of digital entertainment and the reality consumers 
have come to expect.
        Many of those consumers have become fed up with what they view as 
gratuitous sex, drug use, and violence in the movies.  Two of our witnesses 
today set out to serve those consumers by developing ways to clean up the 
movies.  We need to be careful that copyright owners are not harmed in this 
process, and I understand that different companies have taken different 
approaches in trying to serve their potential customers.  I am anxious to hear 
about what options parents and others have in this growing market.  
For instance, why doesn't the movie industry offer edited versions of their 
movies, like those played on TV and on commercial airlines?
        Furthermore, I am very interested to hear how this niche market has 
affected the wider industry.  It seems to me that this would only broaden the 
possible pool of customers.  Many who previously weren't buying or renting 
movies have become customers for the movie makers.  Why then have many in the 
industry attempted-and indeed succeeded in some case-to prohibit these small 
businesses from doing what they do?  From a business standpoint, this strategy 
doesn't seem to be furthering sales.
        As I said, copyright is a time-honored and essential concept.  We must 
protect creators' rights.  I would hope that in doing that we don't curtail 
those of consumers, particularly when those consumers are parents trying to 
the right thing for their children.
        Thank you, Mr. Chairman.  I am glad you have continued the Committee's 
involvement on these important issues, and I look forward to hearing from our 
witnesses.
        I yield back the balance of my time.

	MR. STEARNS.  I thank the gentleman.  The gentleman from Texas, 
Mr. Green.
	MR. GREEN.  Thank you, Mr. Chairman.  I would like to thank you 
and our Ranking Member, Ms. Schakowsky, for holding the hearing.
	Congress addressed this issue in 2005 when they passed the Family 
Entertainment and Copyright Act.  That law made it clear that companies 
such as ClearPlay can offer devices that can take an unedited DVD and 
using the technology in the player provide a scalable edit of that movie to 
remove the violence, foul language and sexual content.  However, that 
law failed to address whether or not making edits or DVDs for content 
and redistributing them is permissible.  A recent court ruling said that 
doing so is an infringement on the copyrights held by the directors and 
production companies.  I support the spirit of our copyright law, and it 
was designed to foster creativity and allow flexibility, and our judicial 
system determined what constitutes fair use and what doesn't.  These 
issues are for our judiciary to decide on a case-by-case basis.
	While Congress can pass legislation in contrast to such a ruling, we 
should approach this issue with the consumer at the top of our priority 
list.  I have a granddaughter, and if I don't want her to watch movies that 
are overly violent or contain adult material, the easiest way for my 
family is to edit inappropriate content for my granddaughter that she 
might be exposed to.  I buy it and I edit it for ourselves but we should not 
be able to market that edited version.
	The issue today is whether or not we should allow a third party to 
acquire the original content, edit the content in that material that some 
may find objectionable and then resell it to consumers.  Once again, the 
committee finds itself exploring the issue of what constitutes fair use and 
how that impacts consumers.  I believe the better policy is when the 
consumers have more choices in the marketplace.  However, we must be 
careful not to infringe on the copyright protections offered under Federal 
law.  In listening to our Chairman's statement, I find I agree with him 
that if I own a copy that had a given movie and I would market the full 
content version but I also want to make money from marketing maybe a 
family-friendly version, you know, but that still protects their content 
because they have that copyright.
	I look forward to hearing what our witnesses have to say and I would 
like to thank the witnesses for being here today.  Thank you, Mr. 
Chairman.
	MR. STEARNS.  I thank my colleague.  We welcome the witnesses, 
the five of you, Mr. Bill Aho, Chief Executive Officer of ClearPlay; Mr. 
Allan Erb, President of CleanFlicks Media Incorporated; Mr. John 
Feehery, Executive Vice President, External Affairs, Motion Picture 
Association of America; Ms. Robin Bronk, Executive Director, The 
Creative Coalition; and Mr. Jason Schultz, Electronic Frontier 
Foundation.
	I understand from staff, Mr. Aho, that you will have a small 
presentation before we start these opening statements.  We are going to 
give you some extra time for this.  Perhaps a compromise might be, you 
could read your statement and then make your presentation.
	MR. AHO.  That is--in the spirit of compromise, I will accept that.
	MR. STEARNS.  Okay.  Just move the mic closer to you if you don't 
mind.

STATEMENTS OF BILL AHO, CHIEF EXECUTIVE OFFICER, CLEARPLAY, INC.; ALLAN L. 
ERB, PRESIDENT, CLEANFLICKS MEDIA, INC.; JOHN FEEHERY, EXECUTIVE VICE 
PRESIDENT, EXTERNAL AFFAIRS, MOTION PICTURE ASSOCIATION OF AMERICA; ROBIN 
BRONK, EXECUTIVE DIRECTOR, THE CREATIVE COALITION; AND JASON SCHULTZ, STAFF 
ATTORNEY, ELECTRONIC FRONTIER FOUNDATION

        MR. AHO.  Thank you, Chairman Stearns, and members of the 
committee.  My name is Bill Aho. I am the CEO of ClearPlay.  ClearPlay 
makes technology that can be implemented into consumer electronic 
devices such as DVD players, televisions, cable set top boxes to help 
parents control media in their homes.  Our movie product has been 
marketed under different brand names and it lets families filter out 
graphic violence, explicit sex, vulgar language from most popular 
Hollywood DVDs.  Our technology can be licensed.  It could be 
available not just on our brands but on multiple brands, I mean Sonys 
and Toshibas and whatever, in the same way you might think of being 
able to get Dolby or picture-in-picture. 
	Thank you for inviting me to testify today.  I am happy to provide 
some perspective on the Family Movie Act of 2005 but also the state of 
parental controls and the media, and in my opening statement I would 
like to address just three things if we could, first, why the Family Movie 
Act was passed in its present form; second, what is the status of parental 
controls today; and third, what options might be available to Congress to 
help families protect themselves further against unwanted media.
	To start with the Family Movie Act of 2005, it essentially clarified 
the copyright law to ensure that the right to filter content in movies in the 
home existed.  It basically gave moms and dads a right to watch movies 
in their home without the bad stuff, but there were three provisions of the 
bill which ultimately made it palatable to Congress and to the broad 
range of constituencies that sometimes are needed to get things done.  
The first is that it does not allow for the decrypting, the creation or the 
copying of tangible edited works.  There are no derivative works that are 
formed, and rather, the Act protects the right to use technology to make 
personal selections.  It is like having a remote control with fast forward 
and mute in your home.  Copyrighted works such as the DVD are never 
copied, modified or altered.  The only thing affected is how you choose 
to view them.  That was important I think to the committee.  The second 
is, the Family Movie Act only covered home use and not public displays.  
The third is that it was ensuring something that already was legal, at least 
according to the U.S. Register of Copyrights, who testified that in her 
opinion, what we did was legal.  Nevertheless, recognizing that 
technology often moves faster than our ability to clarify our laws, we felt 
like it was very likely there could be an endless stream of litigation as 
long as there was somebody in Hollywood willing to challenge the 
parents' right to do that.
	As the legislation was being developed, broader provisions in the bill 
were at various times considered.  One of these was protection of edited 
DVDs such as CleanFlicks.  This approach, as you know, involves 
making copies or admittedly creating a derivative work and proponents 
of fair-use rights have argued that fair-use rights should be extended.  
Unlike software technology solutions, the register said in her opinion this 
was not currently legal.  Content providers also tended to be more 
entrenched against this approach, and in general, congressional 
supporters of the Family Movie Act at that time were not interested in 
addressing this fair-use issue in the legislation.
	Just a couple of minutes also on parental controls.  The Family 
Movie Act has opened up a number of companies that are currently out 
licensing.  Three companies are out actively licensing this technology.  
The adoption has not been rapid amongst the consumer electronics 
industry.  There is I think sometimes a concern when they are told that 
sex sells and that the director's cut which is even more explicit sells 
more copies on DVD.  I think there is some skepticism frankly that the 
American people, you know, families want this despite all the research 
and not just ours but ABC News and Fox and USA Today and all the 
research points to about half the households would be interested in 
having something like this at some point.  But adoption has been slow.
	I am not sure frankly what steps Congress might take to help this 
technology move forward.  It is--I am not generally a fan of regulation 
and I think that what we did with the V-chip probably did not help our 
industry because everybody points to the V-chip and says this doesn't 
work, and so more parental controls aren't necessarily better.  It may be 
that as this committee or as Congress looks at this issue, there may be 
ways to simulate and nudge the industry.  We would support those, and 
certainly we would be willing to help and assist in that movement.  
Thank you.
	[The prepared statement of Bill Aho follows:]

PREPARED STATEMENT OF BILL AHO, CHIEF EXECUTIVE OFFICER, CLEARPLAY INC.

        Good afternoon Chairman Stearns, Chairman Barton, members of the 
committee.  My name is Bill Aho and I am the CEO of ClearPlay Inc.  ClearPlay 
makes technology that can be implemented into consumer electronic devices, 
such as DVD players, televisions and cable set-top boxes, to help parents 
control media in their homes.  Our movie product has been marketed under 
different brand names, and lets families filter out graphic violence, explicit 
sex and vulgar language from most popular DVD's.  
        Thank you for inviting me to testify today.   I am happy to provide 
some perspective on the Family Movie Act of 2005 and the state of parental 
controls and the media.  In my opening statement, I would like to address 
three questions:
        First, why was the Family Movie Act of 2005 passed in its current 
form?
        Second, what is the status of Parental Controls for American families?
And third, what options are available to the government to help families 
protect themselves against unwanted content in the media?
        Let's start with the Family Movie Act of 2005, which in effect 
clarified the copyright law to ensure the right to filter unwanted audio and 
video content from media in the home.  Basically, it gives moms and dads the 
right to watch movies in their homes without the bad stuff.  There were three 
provisions of this bill which ultimately made it palatable to Congress and to 
a broad range of constituencies:
        1. It does not allow for the decrypting, creation of or copying of 
tangible edited works.  No derivative works are formed. Rather, the Act 
protects the right to use technology to make your personal selections, like 
having a remote control that fast forwards or mutes unwanted scenes.  
Copyrighted works, such as DVD, are never copied, modified or altered in any 
way.  The only thing affected is how you choose to view them.
        2. The Family Movie Act only covered home use and not public 
broadcasting.
        3. It was ensuring protection for something that was already legal, at 
least in the opinion of the U.S. Registrar of Copyrights.  However, as is 
often the case, technology moves faster than the law, and the lack of clarity 
in the Copyright Act of 1976 opened up the likelihood of an endless stream of 
litigation as Hollywood fought to suppress this and similar technologies.  The 
Family Movie Act was an effort to simply clarify the legality of mechanically 
controlling content delivery in the home.

        As the legislation was being developed, broader provisions in the bill 
were at various times considered.  One of these was protection of edited 
DVD's, such as those previously offered by Clean Flicks.  This approach 
involves making copies of DVD's which have been edited; or admittedly, 
creating a derivative work.   Proponents have argued that Fair Use rights 
should be extended to include this type of action.  Unlike software technology 
solutions, the Registrar of Copyrights specifically noted that, in her 
opinion, this was not currently legal.  Content providers, including studios 
and directors, were also more entrenched against this approach, which they 
viewed as a more egregious violation of their copyrights.  And in general, 
Congressional supporters of The Family Movie Act were not interested in 
addressing this fair-use issue in the legislation, which could have a 
substantial ripple effect in copyright law.
        Perhaps it would be useful to look at the status of Parental Controls 
in the world of Consumer Electronics and media.  With the Family Movie Act, 
the movie filtering business is beginning to get traction, and both ClearPlay 
and at least two other companies have been actively marketing filtering 
technologies to the Consumer Electronics (CE) industry.  Specifically, these 
companies are lobbying to get effective parental controls incorporated into 
DVD players, televisions, Digital Video Recorders (like TiVo) and 
cable or satellite set-top boxes.
        Unfortunately, Parental Control adoption has moved slowly in the CE 
industry.  The V-Chip, despite the advertising package negotiated by the cable 
industry, is not likely to ever be broadly accepted by consumers.  It's simply 
not a very useful product, and the low usage rates have spooked many in the 
industry.  
        But let me paint a picture of what is possible for families, using 
available technology on existing consumer electronics.
         Families watch a movie on DVD and can choose to skip or mute 
over unwanted sex, violence and profanity.  
         The same capability can be easily downloaded to any of the 
estimated 60 million installed base of DVD's in home PC's and laptops at no 
initial cost.  
         Televisions are sold with the ability to mute profanity on 
command.  
         Cable companies offer set-top boxes with the capability to 
filter movies from Video on Demand and filter language on TV shows.
         Every family can use the Electronic Programming Guide through 
their cable provider to quickly and easily block television shows they don't 
want in their home-not based on obscure TV ratings, but actually choosing 
which shows to block. 
         Parents will be able to go online and actually see what TV 
and movie content their kids have been watching at home-and even on their 
iPods-including a description of the show.  If parents are uncomfortable with 
the content, they can discuss it with their children.

        All of these and more are well within reach of the consumer 
electronics industry at this time, and at surprisingly little cost.  In fact, 
any of these features could be added to CE devices for less than a cost of one 
dollar per unit.  The ability for parents to filter, control and monitor what 
their children are seeing on cable, satellite, TV, DVD and handheld devices is 
extraordinary.
        So finally, my third point, what options are available to the 
government to help make this vision a reality, to help get these tools into 
the hands of families.  Because frankly, the benefits are substantial, not 
just to families, but to multiple industries.  For instance, if tools are 
broadly available, there is less pressure on Congress to monitor and censor 
content providers.  If it was easy to block unwanted programming, there would 
be less uproar over inappropriate content on adult-oriented shows.  If 
filtering movies was broadly available, there would be less concern over 
issues such as the MPAA ratings creep.
        I must admit that I have never been a fan of increased regulation-
telling the CE industry how to make their products.  While it would be very 
good for my industry to have Parental Controls mandated, like the V-chip has 
been, I don't think that's generally the best approach for consumers or for 
industry.
        However, at a time when TV and DVD manufacturers are living on tight 
margins, when Hollywood and broadcasters (who are generally one and the same 
now) are preaching the gospel that more graphic violence and more explicit sex 
will sell better, it may be that Congress can give the industry a nudge in the 
right direction.  Maybe there are ways to work with the FCC to encourage the 
industry to provide effective and responsible Parental Controls.  Maybe 
through tax credits, which I think could be quite modest to be effective.  Or 
maybe it's with the Congressional language that industry has always understood 
best-police yourselves or we'll regulate for you.  As representatives 
of the Parental Control industry, we would be glad to help find solutions that 
are palatable for all constituents.
        In conclusion, I want to applaud the passage of The Family Movie Act.  
It didn't create any additional burdens on content providers or consumer 
electronics manufacturers.  Rather, it just cleared the way for companies to 
provide these benefits, which are starting to come to market in 2007.  I also 
congratulate this committee on taking an interest in this issue.  I believe it 
is a fruitful area of interest for Congress, with the potential to solve 
multiple problems and provide important societal benefits.  And finally, I 
want to reinforce my belief that the tools to help parents and families really 
control media in their homes are out there.  The technology has been created.  
It is a classic win-win for families and the industry.  And if this committee 
can find ways to overcome the present inertia and push industry along the road 
to that vision, the benefits to society, to families, and to industry would be 
significant.

	MR. STEARNS.  We will take a look at your demonstration.
	MR. AHO.  In the spirit of--
	MR. STEARNS.  You can drop the lights if you want.
	MR. AHO.  I am going to show a clip from "The Patriot."
	[Video]
	MR. AHO.  Okay.  Some argue and some suggest that can you still do 
a war movie, can you do battle scenes.  You certainly can.  Take a movie 
like "The Patriot" and with just a couple of minutes of skips throughout 
the entire movie, turn an R-rated movie into something that I feel 
comfortable sharing with my 11-year-old son.
	MR. STEARNS.  So that was already edited?
	MR. AHO.  The way this works is, you control this edit, so for 
instance, you may say, you know, do I want to edit strong violence, 
disturbing images, am I concerned about--maybe you are okay with 
essential content for older kids or you are okay with crude language and 
humor but you don't like the F word.  You can decide how you want to 
watch the movie based upon who watches it.  You can also turn it on and 
off.  So let us watch that same scene with ClearPlay on.
	MR. STEARNS.  So now, this is the edited version?
	MR. AHO.  This is not edited.
	[Video]
	MR. STEARNS.  So the first version was the edited version?
	MR. AHO.  The one where the head was taken off was the one--
	MR. STEARNS.  That was the first clue.  You can put the lights back 
on.  Mr. Aho, thank you.
	Mr. Erb, welcome.
MR. ERB.  Chairman Stearns and members of the subcommittee, my 
name is Allan Erb.  I am the President of CleanFlicks.  Thank you very 
much for the opportunity to testify here today.
	I would like to address two main issues.  One is the current state of 
affairs of the media industry as I see it in our country, and secondly, the 
inadequacy of the Family Movie Act.
	First, the current state of affairs.  Public entertainment in America 
has increased its usage of sexual content, graphic violence, nudity and 
profanity.  Unquestionably there are those who will argue this point but 
that really is not the reason we are here.  The issue is whether families 
should have a choice in the content they wish to have in their homes, and 
if so, how to provide it.  One argument is that those who do not want to 
view offensive content should simply not look, but that is not really a 
choice.  Even for those who are not offended by this content, we are a 
country premised on freedom of choice among a wide variety of options 
in virtually every area of life where nearly every item comes in multiple 
colors, tastes, shapes and sizes.  Why isn't that true here?
	Hollywood produces extraordinary movies with exceptional subject 
matter.  Sadly, many of those productions are also laced with needless, 
often gratuitous content which is not important to the storyline, subject 
matter, content or impact of the movie.  Its removal does no harm to the 
movie.  This seems to be acceptably true even for the studios and 
directors since movies are regularly edited for content for television, 
airlines, cruise ships and some foreign countries.  Why the Hollywood 
studios and directors have chosen not to make these edited movies 
available to the public at large is a question which simply seems 
unanswerable.
	Why is the editor's cut readily available to those who want it while 
the edited cut is hardly available to the millions of parents and families 
who want it?  The demand is there.  Why isn't the supply?  Why are the 
voices of millions of Americans who live value-centered lives go 
unheard?
	While the hold that Hollywood has on the production and 
distribution of movies in America may not rise to the legal definition of 
an antitrust violation, in practicality, the vast majority of public 
entertainment comes from a narrow sector of our society.  The values of 
that sector may not always reflect the values of other potentially large 
segments of society.  Whether these other segments are large or small is 
certainly open to debate but surveys conducted show ranges from 40 to 
60 percent of the general public would prefer to see movies with some or 
all of the offensive content edited out.  This group feels like the media 
industry, movie and television, have simply left them behind.
	Who is to make the determination of what constitutes offensive 
materials?  Should that be extended to only those who have produced the 
offensive content in the first place?  Should it be allowed only to the 
individual family even though the technical expertise simply does not 
exist at this level, or should it be extended to others who are responsive 
to the requests of that segment of society which they seek to serve?
	Secondly, the inadequacy of the Family Movie Act.  In 2005, 
Congress passed the Intellectual Property Protection Act.  The bill taken 
in its entirety was largely an accession to Hollywood's effort to solidify 
its protection of intellectual property in an ever-changing electronic 
environment.  Understandably, the digitization of intellectual property 
threatens to test the current copyright laws in a variety of ways.  Many 
have suggested that this area of the law now requires complete overhaul 
in order to maintain applicability to advancing technology.
	One small portion of the bill was the Family Entertainment and 
Copyright Act purported to provide families with access to movies edited 
to a more family-oriented standard.  Public statements about this bill 
suggested that Congress by its passage had taken major strides in the 
effort to give those who desired it the ability to control the content of 
movies brought into their home.
	In actuality, these characterizations are a dramatic overstatement as 
to the practical usability of the provisions of the Act.  The Act allows for 
only a narrow exception that the ability to deliver the promised result to a 
wide variety of families is simply not possible.  Furthermore, patents on 
the process of delivery that is simultaneous editing as allowed by the 
Family Movie Act limit its distribution to a single company, ClearPlay, 
although another company, Nissim, has challenged the patents, and 
although ClearPlay is willing to license, they are still the only potential 
provider of this product.  By disallowing any production of a fixed copy 
of an edited movie, the Act arguably precludes virtually any delivery 
system other than the one patented.  As currently drafted, the Act 
arguably does not even allow an individual in their own home to produce 
a fixed copy of an edited version of a movie.
	As a result of this, the United States District Court in Colorado 
recently issued a decision putting a number of edited movie providers to 
include us out of business with the following language:  "During the 
pendency of this case, Congress enacted the Family Movie Act.  Thus, 
the appropriate branch of government had the opportunity to make the 
policy choice now urged and rejected it."
	Issues like terrorism and immigration will not command public and 
congressional attention forever.  I sincerely hope that Congress can 
wrestle with this problem and broaden the accessibility of edited movies 
to the general public while safeguarding the fundamental protections to 
intellectual rights.
	Thank you.
	[The prepared statement of Allan L. Erb follows:]

PREPARED STATEMENT OF ALLAN L. ERB, PRESIDENT, CLEANFLICKS MEDIA, INC.

TO:  The House Subcommittee on Commerce, Trade, and Consumer Protection
         The Honorable Cliff Stearns, Chairman

FROM:  Allan L. Erb
              CleanFlicks Media, Inc., President

RE:  Committee Hearing "Editing Hollywood's Editors: Cleaning Flicks for  
              Families" scheduled for 2:00 PM, September 26, 2006

It is my intent to address two main issues:

        1. The current state of affairs 
        2. The inadequacy of the Family Movie Act

I.  The current state of affairs
        Public entertainment in America has increased its usage of sexual 
content, graphic violence, nudity and profanity.  Unquestionably, there are 
those who will argue this point even though a recent Harvard study empirically 
demonstrates the change in movie ratings vs. content, and we all know by our 
own experience that movie content has changed.  Yet, there will still be those 
in our society today who will loudly disagree with even the obvious.  But, 
that is not the debate.  
        The issue is whether families should have a choice in the content they 
wish to have in their homes, and, if so, how to provide it.  One argument is 
that those who do not want to view offensive content should simply not look.  
But, that is not really a choice.  Even for those not offended by this 
content, we are a country premised on freedom of choice among a wide variety 
of options in virtually every area of life, where nearly every item 
comes in multiple colors, tastes, shapes and sizes.  Why isn't that true here? 
        Hollywood produces extraordinary movies with exceptional subject 
matter.  Sadly, many of those productions are also laced with needless, often 
gratuitous, content which is not important to the storyline, subject matter 
content, or impact of the movie.  Its removal does no harm to the movie.  This 
seems to be acceptably true, even for the Studios and Directors, since movies 
are regularly edited for content for television, airlines, cruise ships, and some foreign countries.  Why the Hollywood Studios and Directors have 
chosen not to make these edited movies available to the public at large is a 
question that seems unanswerable.  Why?
        Why is the editor's cut readily available to those who want it, while 
the edited cut is hardly available to the millions of parents and families who 
want it?  The demand is there, why isn't the supply.  Why are the voices of 
millions of Americans who live value-centered lives going unheard?  Why?    
        While the hold that Hollywood has on the production and distribution 
of movies in America may not rise to the legal definition of an anti-Trust 
violation, in practicality, the vast majority of public entertainment comes 
from a narrow sector of society.  The values of that sector may not always 
reflect the values of other, potentially large, segments of society.  Whether 
these other segments are large or small is certainly open to debate.  But 
surveys conducted show ranges from 40-60% of the general public would prefer 
to see movies with some, or all, of the offensive material edited out.  This 
group feels like the media industry, both movie and television, has simply left them behind.
        Who is to make the determination of what constitutes offensive 
materials?  Should that right be extended to only those who have produced the 
offensive content in the first place?  Should it be allowed only to the 
individual family even though the technical expertise simply does not exist at 
this level?  Or, should it be extended to others who are responsive to the 
requests of that segment of society which they seek to serve?  

II. The inadequacy of the Family Movie Act.
        In 2005, Congress passed The Intellectual Property Protection Act (HR 
2391).  The Bill, taken in its entirety, was largely an accession to 
Hollywood's efforts to solidify its protection of intellectual property in an 
ever-changing electronic environment.  Understandably, the digitization of 
intellectual property threatens to test the current Copyright Laws in a 
variety of ways.  Many have suggested that this area of the law now 
requires complete overhaul in order to maintain applicability to advancing 
technology.  
        One small portion of the Bill (Section 212, entitled The Family Movie 
Act of 2005) purported to provide families with access to movies edited to a 
more family-oriented standard.  Public statements about this Bill suggested 
that Congress, by its passage, had taken major strides in the effort to give 
those who desired it, the ability to control the content of movies that would 
be brought into their homes.  
        In actuality, these characterizations are a dramatic overstatement as 
to the practical usability of the provisions of the Family Movie Act.  The Act 
allows for only such a narrow exception, that the ability to deliver the 
promised result to a wide range of families is simply not possible.  
Furthermore, patents on the process of delivery (simultaneous editing) as 
allowed by the Family Movie Act limit its distribution to a single company, 
Clear Play (although another company, Nissim, Inc., challenges the 
patents).  By disallowing any production of a "fixed copy" of an edited movie, 
the Act arguably precludes virtually any delivery system other than the one 
patented.
        As a result of this, the United States District Court for the District 
of Colorado in its July 6, 2006, decision in the case involving a number of 
edited movie providers, put those providers out of business with the following 
language:  "During the pendency of this case Congress enacted the Family Movie 
Act. . . . Thus, the appropriate branch of government had the opportunity to make the policy choice now urged and rejected it."
        Copyright laws are fundamentally rooted in economics.  Clearly, the 
challenge to Congress in passing some type of legislation that would truly 
allow families across America to access edited movie content while protecting 
intellectual property rights is an enormous challenge.  But, the current 
result, while a valiant effort, does not meet that challenge.
        By way of a rather extreme analogy, let us hypothesize that Congress, 
many years ago, had tried to balance the interests of bicycle manufacturers 
and horse breeders against the interests of new motorized vehicle 
manufacturers by passing a Bill which allowed for the introduction of 
motorized vehicles -- but only so long as they were 16 wheel semi-
trucks.  Obviously, some people would have availed themselves of the new 
opportunity, but the cumbersome and costly nature of what was made available 
would make the usage narrow, at best.  
        To extend the hypothetical, let us assume that a company named 
Peterbilt, at the time, had a patent on the production of 16 wheel semi-
trucks.  The effect of the Bill would not only have been a poor first step in 
allowing the majority of Americans access to motorized vehicles, but would 
also have provided a single business entity with a monopoly in the market 
place.  That, in my judgment, is exactly where we are today with respect to 
making edited movies available to the majority of Americans.
        The only alternative allowed is cumbersome, costly, and patented. It 
will simply not meet the demand.  It requires the purchase of a new type of 
DVD player, when most Americans have already incurred that expense, and, in 
most cases, it requires sufficient technological expertise to download editing 
commands to a computer for copying to a CD for use in the DVD player.  And 
yet, remarkably, it still seems to draw fire from Hollywood. 
        The ultimate introduction of automobiles in every size and shape put 
two cars in nearly every garage, enhanced the lifestyle of Americans, and is 
at least one factor in the incredible power of the U.S. economy.  Similarly, 
broadening the availability of edited movies to other "sizes and shapes" will 
widen usage, enrich family lifestyles and add to the moral fiber of our 
society.
        Sadly, one of the factors in negative attitudes about American culture 
across the globe, and some of the problems that result, emanates in part from 
a belief that our exported media depicts the moral values of our country.  
However untrue that may be, this media is the only basis for some of those 
beliefs.
        Technology continues to advance.  Recently, movies have been made 
available through computer download.  This would open new opportunities to 
develop simplified edited movie delivery systems to that sector of society 
that has this technology available, except for the narrow language in the 
Family Movie Act.  As currently drafted, the Act arguably does not even allow 
an individual in their own home to produce a "fixed copy" of an edited version 
of a movie!  
        Issues like terrorism and immigration will not command public and 
Congressional attention forever.  I sincerely hope that Congress can wrestle 
with this problem and broaden the accessibility of edited movies to the 
general public while safeguarding the fundamental protections to intellectual property. 

	MR. STEARNS.  Thank you.  Mr. Feehery.
        MR. FEEHERY.  Thank you, Mr. Chairman.  Chairman Stearns, 
members of the subcommittee, thank you for giving me this opportunity 
to express the views of the Motion Picture Association on the subject.  
Our president, Mr. Glickman, really wanted to be here today but he had 
an event that he could not get away from so he apologizes for not 
appearing and he sent me instead.
	At the outset, let me say that the movie industry like most industries 
is driven by consumer demand.  Each of the MPAA member studios is 
actively competing in the marketplace to serve the intense demand for 
family movies.  The Walt Disney Company long has been associated 
with films that appeal to the entire family.  Twentieth Century Fox 
announced last week that it has initiated a program to distribute family-
friendly movies under the FoxFaith banner.  Paramount will release the 
family film "Charlotte's Web" in December.  Sony will release the 
animated children's film "Open Season" later this week.  Warner 
Brothers will release a PG-rated "Happy Feet" next month, and 
Universal released G-rated "Curious George" earlier this year.  So far 
this year the film industry has released 82 films rated G or PG with 21 
films rated G and 61 films rated PG.  Our industry is providing 
consumers with family-friendly films because the market has demanded 
it.  Of course, not all films are appropriate for the entire family and not 
all movies should be geared to an audience of five-year-olds.
	But parents do not want government to regulate the content of our 
movies and television programming.  In a recent survey done by TV 
Watch, 91 percent of parents stated that more parental involvement 
rather than government regulation was the best way to control what their 
children watch.
	Congress last year amended the Copyright Act to permit the 
marketing of programs that automatically skip or mute content based on 
individualized user preferences during playback of DVD movies.  That 
legislation was not without controversy.  There are very legitimate 
concerns about the impact of these tools on the artistic integrity of 
filmmakers who may invest millions of dollars and years of their lives 
putting their very personal expressive vision of a story on film only to 
have it changed by commercial editors with whom they have no 
relationship.  Ask Steven Spielberg how he feels about a stranger 
creating and marketing their own versions of "Saving Private Ryan" and 
"Schindler's List," and I believe you will get some flavor for their 
concern that exists on this issue.
	We don't have to relive that debate here.  The law now clearly 
allows for technology that enables consumers to automatically skip and 
mute material they find objectionable in the privacy of their own homes.  
That legislation was carefully drafted to draw a clear line between an 
automated program that skips or mutes certain material at the direction of 
the user when a DVD is played and the commercial distribution of 
unauthorized copies of movies that have been physically edited without 
the permission of the creators.  The former does not result in an actual 
altered copy of the movie.
	This is decidedly not the case with the latter category where the films 
are cut and spliced, changing the film to reflect the vision of an editor 
rather than the producer or the director.  Copyright is violated as 
unauthorized copies are made and distributed, which constitutes the 
unauthorized making and distribution of derivative works.  U.S. and 
international law long have established that the making of a derivative 
work is the exclusive rights of the copyright owner of the original work.  
These considerations are important ones to creators and content owners.  
Whatever one might think of the Family Movie Act, these distinctions 
important to Congress a year ago were main important dividing lines 
between exempted conduct and commercial-scale copyright 
infringement.
	Let me conclude by saying that the movie industry is responding to 
marketplace demand for family-friendly films.  The free market works 
best without government regulations that dictate content. 
	Thank you for giving me the chance to appear today
	[The prepared statement of John Feehery follows:]

PREPARED STATEMENT OF JOHN FEEHERY, EXECUTIVE VICE PRESIDENT, EXTERNAL 
AFFAIRS, MOTION PICTURE ASSOCIATION OF AMERICA

        Chairman Stearns, members of the Subcommittee, thank you for giving me 
this opportunity to express the views of the motion picture industry.
        At the outset, let me say that the movie industry, like most 
industries, is driven by consumer demand.  There is a market for "family 
friendly" movies and each of the MPAA member studios is actively in the market 
competing to serve that demand.  The Walt Disney Company long has been 
associated with films that appeal to the entire family.  As recently as this 
week, Twentieth Century Fox announced that it has initiated a program to 
distribute family friendly movies under the FoxFaith banner.  Paramount will 
release the family film, "Charolette's Web" in December; Sony will release the 
animated children's film "Open Season" later this week; Warner Bros will 
release PG-rated "Happy Feet" next month; Universal released G-rated "Curious 
George" earlier this year. So far this year the film industry has released 82 
films rated G or PG, with 21 films rated G and 61 films rated PG.
        My point here is that our industry is providing consumers with family 
friendly films.  But not all films are appropriate for the entire family, and 
I trust you would agree that all movies should not be geared to an audience of 
5-year-olds.  However, there are many, many movies being made that are 
appropriate for viewing by the entire family.
        It is also worth noting that parents do not want government to 
regulate content.  In a recent survey done by TV Watch, 91 percent of parents 
stated that more parental involvement, rather than government regulation, was 
the best way to control what their children watch.  
        As you know, Congress last year amended the Copyright Act to permit 
the marketing of programs that automatically skip or mute "objectionable" 
content based on individualized user preferences during playback of DVD 
movies. That legislation was not without controversy.   There are very 
legitimate concerns about the impact of these tools on the artistic integrity 
of filmmakers, who may invest millions of dollars and years of 
their lives putting their very personal and expressive vision of a story on 
film, only to have it changed by commercial editors with whom they have no 
relationship.  Ask Mel Gibson how he feels about someone he's never met 
creating their own, "family friendly," non-violent version of the Passion of 
the Christ, or Steven Spielberg how he feels about a stranger creating and 
marketing their own versions of Saving Private Ryan and Schindler's List, and 
I believe you will get some flavor for the concern that exists on this issue.
        But the point is not to re-live that debate.  The point is that the 
law now clearly allows for technology that enables consumers to automatically 
skip and mute material they find objectionable in the privacy of their homes.  
That legislation was also carefully crafted to draw a clear line between an 
automated program that skips or mutes certain material at the direction of the 
user when a DVD is played, and the commercial distribution of unauthorized 
copies of movies that have been physically edited without the permission of 
the creators.  The former does not result in an actual altered copy of the 
movie.  As the Report accompanying the legislation noted, 

        "If you look at a DVD . before and after [the] technology has been 
used to mute or fast-forward over the offensive material, there would be 
absolutely no difference in the product.  It has not been sliced, diced, 
mutilated, or altered.  The director's work is still intact. No unauthorized 
copies have been distributed, no copyright violated."  H.Rep. 108-670, at 19.  

        This is decidedly not the case with the latter category, where the 
films are cut and spliced, changing the film to reflect the vision of the 
editor, rather than the producer or the director.  And copyright is violated 
as unauthorized copies are made and distributed, which constitute the 
unauthorized making and distribution of "derivative works."  U.S. 
and international law long have established that the making of a derivative 
work is the exclusive right of the copyright owner of the original work.  It 
is for this reason that the legislative history accompanying the Family Movie 
Act also notes that 

        "the Act does not create an exemption for actions that result in fixed 
copies of altered works.  The committee is aware of services and companies 
that create fixed derivative copies of motion pictures and believes that such 
practices are illegal under the Copyright act."  Id. at 7.

        The user-directed nature of the technologies exempted by the Family 
Movie Act was a key consideration.  Both the House and Senate sponsors made 
clear that

        "There is a basic distinction between a viewer choosing to alter what 
is visible or audible when viewing a film, the focus of this legislation, and 
a separate entity choosing to create and distribute a single, altered version 
to members of the public. It is the sponsor's intent that only viewer directed 
changes to the viewing experience be immunized, and not the making or 
distribution of actual altered copies of the motion picture."

        The sponsors further explained that the skipping of scenes must not be 
a one-size fits all determination by a commercial editing service, but  "must 
be done by or at the direction of a member of a private household."  They 
noted that "While this limitation does not require that the individual member 
of the private household exercise ultimate decision-making over each and every 
scene or element of dialog in the motion picture that is to be made 
imperceptible, it does require that the making imperceptible be made at 
the direction of that individual in response to the individualized preferences 
expressed by that individual."  Thus:

        "This limitation would not allow a program distributor, such as a 
provider of video-on-demand services, a cable or satellite channel, or a 
broadcaster, to make imperceptible limited portions of a movie in order to 
provide an altered version of that movie to all of its customers, which would 
likely violate a number of the copyright owner's exclusive rights, or to make 
a determination of scenes to be skipped or dialog to be muted and to offer to 
its viewers no more of a choice than to view an original or an altered version 
of that film. Some element of individualized preferences and control must be 
present such that the viewer exercises substantial choice over the types of 
content they choose to skip or mute."
        These considerations are important ones to creators and content 
owners.  Whatever one might think of the Family Movie Act, these distinctions 
- important to Congress a year ago -- remain important dividing lines between 
exempted conduct and commercial scale copyright infringement.  
        Finally, the suggestion that anyone should be able to market copies of 
edited versions of movies to the public is a very dangerous concept, 
especially if that editing consists of additions as well as deletions.  While 
you may think that the making of certain edits to a movie would be in the 
public interest, there can be a very great divide between your concept of what 
is in the public interest and what someone else thinks is in the public 
interest.  The movie "Titanic" provides an example.  In the sketch scene with 
Kate Winslet and Leonardo DiCaprio, certain editing technologies allow 
companies to cover up the unclothed actress while others would allow companies 
to feature her unclothed in other parts of the movie.  However, both acts 
violate copyright law, regardless of the difference of opinion regarding which 
scenario (clothed or unclothed) is preferable.  
        The Constitution prohibits Congress from enacting laws that 
discriminate against certain speech.  Thus, even if one could write a law that 
permitted "good" edits, but not "bad" edits of a movie, such a law would be 
immediately struck down by the courts.
        Congress has already done all that it reasonably can and should do to 
encourage the availability of family friendly films.  More importantly, the 
movie industry is responding to marketplace demand for family friendly films.  
Any attempt by Congress to permit unauthorized editing of movies to produce 
"family friendly" versions will either encourage family UNfriendly versions as 
well, or run afoul of Constitutional protections of free speech.
        Thank you for giving me the opportunity to appear here today.

	MR. STEARNS.  Thank you.  Ms. Bronk.
        MS. BRONK.  Good afternoon, Chairman Barton, Chairman Stearns, 
Ranking Member Schakowsky and members of the subcommittee.  My 
name is Robin Bronk and I am Executive Director of The Creative 
Coalition.  I am honored and proud to be called upon to testify at this 
hearing, and as a working mother, I thank you for your time and efforts 
on behalf of American families.
	The Creative Coalition is a nonprofit, nonpartisan public advocacy 
organization of the entertainment industry.  We were founded in 1989 by 
prominent figures in the creative community and we work to educate and 
mobilize leaders in the arts community on issues of public importance.  
Our members are actors, actresses, writers, producers, directors, 
community leaders, educators and others involved in America's creative 
arts.  I thank you for having me here today to address this issue that is so 
important to so many members of my organization.
	Article I of the U.S. Constitution gave Congress the authority to 
protect intellectual property in order to promote the arts and sciences.  
This construct has been spectacularly successful and time tested, I might 
add, in protecting and nourishing the arts which are essential to a 
flourishing American culture.  Nowhere perhaps is America's 
contribution to the arts more pronounced than in the cinema.
	Movies are an American art form.  It is not just another business.  It 
is not just about money and it is not about any payday.  Yet too often 
there is a tendency to view filmmaking that way.  We don't have the 
same problem when discussing literature or when we discuss sculpture.  
Just think how different this discussion today would be if we were 
talking about for-profit companies censoring America's great novels to 
omit material that someone found objectionable.  Moviemakers are 
artists and the creative choices that they make are at the heart of their 
artistic expression, and artistic expression is one of the very cornerstones 
of our Nation.
	I would like to talk for just a moment about my personal experience 
dealing with the artists involved in making motion pictures.  While the 
media seem obsessed with big-budget movies and blockbuster releases, 
the truth of the matter is that moviemaking is the antithesis of a 
guaranteed get-rich-quick scheme.  My members dedicate years of their 
lives to getting films completed and a message, a lesson, a moment in 
history in front of the public.  In many instances, actors, even the most 
lauded in the business, work for scale wages just to ensure that pictures 
get made and messages are heard.  Directors pour themselves into 
projects that if they ever looked at the statistics, they would never know 
to expect to make much if any money at all.
	I mention this because discussion of these new technologies often 
turns quickly to how movie studios and artists don't necessarily lose 
money due to the release of these unauthorized edits.  If this were just 
about money, however, we wouldn't even be having this discussion.  
Absent any involvement from Capitol Hill, there are already tremendous 
economic pressures in Hollywood to make movies that can get a G or PG 
rating because those movies have the broadest possible paying audiences.
	Why then are these artists making movies with content that some 
find objectionable knowing they will get ratings that will limit their 
potential audience?  They do it because they are artists.  They are 
working to tell a unique story, to convey a specific feeling to the 
audience, to reflect an image of our reality back to us, and for many 
artists, including material that some may find objectionable to telling a 
story or making a story believable to an audience so that the movie 
screen doesn't act as a barrier between the filmmaker and the viewer.
	The old axiom is true:  art imitates life.  Walk the halls of this 
building or the sidewalks of Washington and you will hear language that 
finds its way into films.  If you read the morning newspaper or if you 
watch the evening news, you will see violence that some would object to 
in films.  And love stories are universal.
	Subjectively editing movies can change effect and meaning.  
Filmmakers have historically gotten into enormous fights about edits 
with studios which are paying for production because edits can change 
the essence of art.  That is why it is so important to all of us as 
consumers, as citizens and as creators ourselves that art not be subjected 
to unauthorized altering and then marketed under the artist's name 
without permission.
	At the same time, members of The Creative Coalition would be the 
first to tell you that all content may not be appropriate for all audiences.  
Writers, directors and actors, they all have kids of their own.  In fact, my 
members routinely make movies they don't allow their own children to 
watch.  It is not rocket science.  It is parenting 101 that teaches us that 
not everything that is appropriate for an adult is appropriate for a child.  
The creative community has supported the ratings system, and last year's 
Family Entertainment and Copyright Act gave parents additional choices 
for controlling what their families watch.  Ultimately, people don't have 
to watch a movie.  The same idea holds true for film like sculpture and 
like any other art.  I firmly believe that we can achieve the objectives that 
all here seek without interfering with the artistic vision that our freedom 
of expression and our copyright laws exist to foster, and frankly, giving a 
darn just doesn't hold up when you just have to give something else.
	I thank you all for your time and look forward to your questions.
	[The prepared statement of Robin Bronk follows:]

PREPARED STATEMENT OF ROBIN BRONK, EXECUTIVE DIRECTOR, THE CREATIVE 
COALITION

        Good afternoon Chairman Stearns, Ranking Member Schakowsky and members 
of the Subcommittee.  My name is Robin Bronk, and I am the Executive Director 
of The Creative Coalition. 
        The Creative Coalition is a nonprofit, nonpartisan advocacy 
organization of the entertainment industry. Founded in 1989 by prominent 
figures in the creative community, The Creative Coalition works to educate and 
mobilize leaders in the arts community on issues of public importance.  Our 
members are actors, actresses, writers, producers, directors, and others 
involved in America's creative arts.  I thank you for having me here 
today to address this issue that is so important to so many members of my 
organization.  
        Article I of the U.S. Constitution gave Congress the authority to 
protect intellectual property in order to promote the sciences and the arts.  
The system has been spectacularly successful in promoting arts in America.  
Nowhere, perhaps, is America's contribution to the arts more pronounced than 
in cinema.  
        Movies are an American art form.  It's not just another business.  
It's not just about money.  Yet, too often, there's a tendency to view 
filmmaking that way.  We don't seem to have this same problem when discussing 
literature or sculpture.  Just think how different this discussion today would 
be if we were talking about for-profit companies censoring America's great 
novels to take out material that they found objectionable.  Moviemakers are 
artists, and the creative choices that they make are at the heart of their 
artistic expression.  
 	I'd like to talk for just a moment about my personal experience 
dealing with the artists involved in making motion pictures.  While the media 
seem obsessed with big budget movies and blockbuster releases, the truth of 
the matter is that moviemaking is a labor of love more than some get-rich-
quick scheme.  My members dedicate years of their lives to getting projects 
done.  In many instances, actors -- even famous names -- work for scale wages 
just to ensure that pictures get made.  Directors pour themselves 
into projects that they never expect will make them much, if any, money at 
all.  
        I mention this because discussion of these new technologies often 
turns quickly to how movie studios and artists don't necessarily lose money 
due to the release of these unauthorized edits.  If this were just about 
money, however, we wouldn't even be having this discussion.  Absent any 
involvement from Washington, there are already tremendous economic pressures 
in Hollywood to make movies that can get G or PG ratings because those movies 
have the broadest possible paying audience.  
        Why then are these artists making movies with content that some find 
objectionable, knowing they'll get ratings that will limit their potential 
audience?  They do it because - as artists - they're working to tell their 
unique story, to convey a specific feeling to the audience, to reflect their 
image of our reality back to us.  And for many artists, including material 
that some may find objectionable is essential to telling their story or making 
a story believable to an audience so that the movie screen doesn't act as a 
barrier between the filmmaker and the viewer.  
        The old axiom is true:  art imitates life.  Walk the halls of this 
building of the sidewalks of Washington, and you'll hear language that finds 
its way into films.  If you read the morning newspaper or watch the evening 
news, you'll see violence that some would object to in films.  And love 
stories are universal.  The fact that all of us here were conceived and born 
is testament to that.  
        To edit movies can change their effect or their meaning.  Filmmakers 
even get in enormous fights about edits with the studios, which are paying for 
production, because edits change the artwork.  That's why it is so important 
to my members that their art not be altered without their permission and then 
marketed under their names.  
        At the same time, the members of The Creative Coalition would be the 
first to tell you that all content may not be appropriate for all audiences.  
Writers, directors, and actors, they have kids of their own.  In fact, my 
members routinely make movies they don't allow their own children to watch.  
The creative community has supported the ratings system.  A few years ago, the 
ratings system was expanded to give parents more specific information about 
why a movie received the rating it did, all in an effort to give 
parents information they can use to make decisions for their own families. 
And last year's Family Entertainment and Copyright Act gave parents additional 
choices for controlling what their families watch.  Ultimately, people don't 
have to watch a movie if they don't want to see what's in it.  If you don't 
want to see statues with nudity, just don't go to the classical art museum.  
        The same idea holds true for film, which - like sculpture - is art.  I 
firmly believe that we can achieve the objectives that all here seek without 
interfering with the artistic vision that our freedom of expression and our 
copyright laws exist to foster.  
        I thank you all for your time and look forward to your questions.  

	MR. STEARNS.  Mr. Schultz.
        MR. SCHULTZ.  Thank you.  On behalf of the Electronic Frontier 
Foundation, I appreciate the subcommittee's invitation to appear today.
	As the subcommittee is well aware, the shift to digital media has 
created new tensions between ordinary Americans and copyright holders.  
We saw this come to a head in a recent lawsuit of Huntsman v. 
Soderbergh.  At issue in that case was a longstanding American tradition 
of parents exercising control over the way their children watch movies 
versus the power of copyright owners to control their viewing 
experience.  In the past parents had exercised this control either by 
making wholesale choices about what to buy or by spending the time and 
energy to watch every single program they could with their children.  But 
today companies such as CleanFlicks and ClearPlay are offering parents 
products and services to help them more efficiently protect their children 
from content of which they are concerned.  The question is though, how 
does and should the law treat these companies?
	Many copyright owners have a very limited concept of the rights of 
parents and consumers to customize their viewing experience.  They 
believe that the law should allow the copyright owner strict control over 
the home movie watching experience.  Yet copyright law has never 
provided such broad control.  In fact, consumers have always been able 
to customize their purchases whether copyrighted or not.  For example, 
when you buy a car, you can decide what kind of tires you want to put on 
it or what color you want to paint it.  In the home, when you buy a bed, 
you can decide what kind of sheets or pillows you want to put on it.  If a 
family wants to play a game of Monopoly or Trivial Pursuit, they can 
change the rules and they don't have to ask the game maker even though 
the game is copyrighted.  And when you put your kids to sleep at night, 
you can choose what part of their favorite story to read and what part to 
emphasize without having to ask the story's author.  In fact, some of you 
will remember that this was exactly the plotline of the popular film, "The 
Princess Bride" where the grandfather entertains his sick grandson by 
reading a book aloud and skips the boring parts, a sort of pre-digital 
ClearPlay, if you will.
	The digital era though has complicated this matter.  Every computer, 
every iPod, every cell phone is a copy machine of sorts and when copies 
are made, copyright law controls much of what you can and can't do 
with those devices.  But consumers shouldn't lose their freedom to 
customize their experience just because they have decided to take a step 
into the digital world.  We can and should respect the copyrights of the 
media makers and at the same time preserve the rights of parents to make 
judgments about what is appropriate within their homes and for their 
families.
	Consider the example of searching and viewing Internet websites.  
Today parents have a wide variety of options for customizing their 
children's Internet experience.  There are filtering tools such as Google's 
SafeSearch which limit what information is available when children go 
online.  While we at EFF have some very serious concerns when these 
tools are made mandatory and some concerns about overblocking, it is a 
very different matter when parents voluntarily use them in the home to 
provide viewing options for children.
	Imagine, however, if the rules that the MPAA wanted in the 
Huntsman case applied to online content.  Web pages are just as 
copyrightable as movies or music.  Applying the studios' legal theory to 
the Internet, this might prohibit parents from customizing or filtering 
their children's Internet experiences just as the MPAA wanted to prohibit 
them from customizing or filtering the movie watching experience.  It 
might also prohibit companies from offering customizing technologies 
for Web browsing just as the MPAA wanted to prohibit CleanFlicks and 
ClearPlay from offering such technologies for home movie viewing.
	Thankfully, Congress has repeatedly endorsed market-based 
mechanisms as a proper way for parents to avoid content they don't like 
without intruding on the preferences of others.  This has also fostered a 
healthy market for tools for parents to use.  Without such devices, 
parents are almost powerless to provide supervision for their families in a 
digital world.  Yet copyright law threatens the development of many 
such tools for home movie viewing.  For example, in the Huntsman case, 
the MPAA did raise the specter of section 1201 of the Digital 
Millennium Copyright Act, implying that any tool that is used to copy or 
modify the contents of a DVD is per se illegal, even if those actions are 
legal under the test for fair use or serve lawful purposes, such as backing 
up one's DVD collection or, in this case, providing lawfully purchased 
edited versions of a movie for home viewing.
	Fortunately, a strong and practical solution to part of this problem 
is pending in H.R. 1201, the Digital Media Consumer Rights Act of 2005, 
which allows both individuals and companies to modify and access the 
contents of a DVD for lawful or fair uses only.  There can certainly be no 
more lawful or fair use in my opinion than to help parents customize 
their children's home movie viewing experience.  H.R. 1201 would not 
only allow parents to do this but would also allow companies to make the 
products and services that parents depend on to accomplish this 
technologically.
	Thank you.
	[The prepared statement of Jason Schultz follows:]

PREPARED STATEMENT OF JASON SCHULTZ, STAFF ATTORNEY, ELECTRONIC FRONTIER 
FOUNDATION

        On behalf of the Electronic Frontier Foundation, I appreciate the 
Subcommittee's invitation to appear today. As the Subcommittee is well aware, 
the shift to digital media has created new tensions between ordinary Americans 
and copyright holders.  We saw this come to a head in the recent lawsuit of 
Huntsman v. Soderbergh. At issue in that case was a long-standing American 
tradition of parents exercising control over the way their children watch 
movies versus the power of copyright owners to control our viewing 
experience. In the past, parents had exercised this control either by making 
wholesale choices about what they buy or spending the time and energy to sit 
and watch every program with their child. Today, however, companies like 
CleanFlicks and ClearPlay are offering parents products and services to help 
them more efficiently protect their children.  The question is, how does and 
should the law treat these companies?
        Many copyright owners have a very limited concept of the rights of 
parents and consumers to customize their viewing experience. They believe that 
the law should allow them strict control over home movie watching. Yet 
copyright law has never provided such broad control.  In fact, consumers have 
always been able to customize their purchases.  For example, when you buy a 
car, you can put whatever tires you like on it or paint it any color you wish. 
In your home, you can put whatever sheets or pillows you'd like on the bed. If 
your family wants to play a game of Monopoly or Trivial Pursuit by a 
different set of rules, they can do so without the game maker's permission.  
And when you put your kids to sleep at night, you can choose to read whatever 
part of their favorite story you wish, again without having to ask permission 
of the story's author. In fact, some of you will remember that this was 
exactly the plotline in the popular film, The Princess Bride, where the 
grandfather entertains his sick grandson by reading a book aloud and skipping 
the boring parts. Sort of a pre-digital Clearplay, if you will.
        The digital era has complicated this matter. Every computer, every 
iPod, every cell phone is a copy machine of sorts. When copies are made, 
copyright law controls much of what you can and can't do with those devices. 
But consumers should not lose their freedom to customize their experience just 
because they have decided to step forward into the digital world. We can and 
should respect the copyrights of the media makers and, at the same time, 
preserve the rights of parents to make judgments about what is 
appropriate within their homes and for their families.
        Consider the example of searching and viewing Internet websites. 
Today, parents have a wide variety of options for customizing their children's 
Internet experience.  There are filtering tools such as Google's SafeSearch 
that limit what information is available when children go online. While we at 
EFF have serious objections when these tools are made mandatory, it's a very 
different matter when parents use them at home to provide customized viewing 
options for children.
        Imagine, however, if the rule that the MPAA wanted in the Huntsman 
case applied to online content.  Webpages are just as copyrightable as movies 
or music. Applying the studios' legal theory in Huntsman to the Internet, this 
might prohibit parents from customizing or filtering their children's Internet 
experience, just as the MPAA wanted to prohibit them from customizing or 
filtering their children's movie viewing experience.  It might also prohibit 
companies from offering customizing technologies for web browsing, just as the 
MPAA wanted to prohibit CleanFlicks and ClearPlay from offering such 
technologies for movie watching.
        Thankfully, Congress has repeatedly endorsed market-based mechanisms 
as the proper way for parents to avoid content they don't like without 
intruding on the preferences of others. This has also fostered a healthy 
market in tools for parents to use. Without such devices, parents are almost 
powerless to provide supervision for their families in the digital world. Yet 
copyright law currently threatens the development of many such tools for the 
home viewing environment.  For example, in the Huntsman case, the MPAA raised 
the specter of Section 1201 of the Digital Millennium Copyright Act, implying 
that any tool used to copy or modify the contents of a DVD is per se illegal, 
even if those actions are legal under the test for fair use and serve lawful 
purposes, such as backing up one's DVD collection or providing a lawfully 
purchased edited version of a movie for home viewing.
        Fortunately, a strong and practical solution to part of this problem 
is pending before Congress. H.R. 1201, the Digital Media Consumer's Rights Act 
of 2005 (DMCRA), allows both individuals and companies to access and modify 
the contents of a DVD for lawful or fair uses only.  There can certainly be no 
more lawful or fair use than to help parents customize their children's home 
movie viewing experience.  H.R. 1201 would not only allow parents to do this 
but would also allow companies to make the products and services that parents 
depend on to accomplish this technologically.
        Again, thank you, Mr. Chairman, for the opportunity to appear before 
the Subcommittee to address these important issues.  We appreciate being asked 
to be here and look forward to working with you and your staff as you examine 
these issues further.

	MR. STEARNS.  Thank you.  I will start off with my questions.  Ms. 
Bronk, let me ask you something.  When you go in high school and you 
read "Pride and Prejudice" by Jane Austin, a lot of high school students 
have a very difficult time with it, so then what they do is, they go and get 
the Cilff Notes of "Pride and Prejudice" and they read that, and perhaps 
they might go home and find on their mother's shelf a Reader's Digest 
version of "Pride and Prejudice."  You could go the same way with "The 
Iliad."  Recently "The Iliad" as translated has been synopsized and 
summarized.  These are classic works and yet there doesn't seem to be 
any hew and cry against these people.  In fact, there are business books 
that are summarized all the time that I can subscribe to and it will take 
the latest business book from maybe the CEO of IBM and then 
summarize and it give a very short version of it.  In fact, there is one 
website that actually takes it and brings it down to one or two sentences.  
So there are all kinds of creativity that have been done.  Why is that 
different than what either ClearPlay or CleanFlicks Media is doing?
	MS. BRONK.  Well, I beg to differ in that I don't think that you will 
find an educator that will say that Cliff Notes does take the place of a 
work of literature.  In fact, I think that while there are summaries 
available, while there are shortcuts available, while there are executive 
summaries, it is to not be in lieu of the work of art.
	MR. STEARNS.  But if the person wants to make the decision that 
they don't want to read the work of art and they want to be able to go, as 
Mr. Schultz said, to the market and maybe get a summary or a synopsis 
from one of these fellows, why couldn't they do that?
	MS. BRONK.  I think they could but I think at the end of the day, will 
your child get more out of "Beowulf" or the executive summary out of 
Beowulf?
	MR. STEARNS.  Well, if he won't read "Beowulf," then he will get 
more out of it if he reads the summarized version of it.
	MS. BRONK.  I don't know.  I think I would still prefer to have my--
	MR. STEARNS.  I am not saying it is exact analogy but I am just 
saying that you have something dealing with books, even current books 
that come out.  "The Da Vinci Code," any of these books sometimes are 
summarized and sometimes people will pick up these books because they 
don't have the time to read them and maybe in some cases they would 
like to get these movies but they don't necessary want to go through all 
the sex scenes, the violent scenes and the profanity scenes, they just want 
to get the spiritual side of the movie.
	Let me ask Mr. Aho, do you--maybe both you and Mr. Erb, if the 
Movie Act of 2005 had not passed, do you believe ClearPlay would have 
been found to be infringing?
	MR. AHO.  No, I think we would have won.  I am encouraged by the 
fact that again the U.S. Register of Copyrights gave her--testified before 
Congress and her opinion was that we did not infringe.  However, I 
believe that even if we would have won that summary judgment, we 
would have been sued again by Hollywood and again and again and 
again because there are enough constituencies there that don't want us to 
exist.
	MR. STEARNS.  Mr. Feehery, what is your answer to if the movie act 
had not passed, do you believe ClearPlay would have been found to be 
infringing?  What does the Motion Picture Association say?
	MR. FEEHERY.  I don't know the answer to that question.  You know, 
I--
	MR. STEARNS.  Mr. Aho is indicating that you would think they were 
infringing.
	MR. FEEHERY.  Well, I think that right now Congress has passed a 
law on this very subject and I think that they have had--you had in the 
Congress a lot of very talented people coming through and creating that 
law and I think that they tried to find a way to create that law that was 
not going to in their minds abuse the copyright law.
	MR. STEARNS.  But doesn't the film industry take edited--make 
edited movies--because I am on the airplane lots of times and I see 
movies that have been edited, particularly if you go on cruise lines or to 
foreign countries.  I guess the question is, what is the percentage of total 
revenue of these edited movies?  If not, if you can't tell me specifically 
the amount of money, why doesn't the industry sell these edited versions 
if I saw it going to California or going to Singapore?  I mean, if you have 
an edited version and you are doing it yourself and you are complaining 
these folks are doing it, why can't I buy that?
	MR. FEEHERY.  Mr. Chairman, I will get the answer to your question 
about how much revenue that brings.  I don't have that answer readily 
available.  I don't--we don't really get into the commercial decisions of 
the studios.  That is not what we do.  Each studio makes their own 
commercial decisions on how to best market the movies.  My experience 
with them is they all want to make money but that has been my 
experience with them.
	MR. STEARNS.  If you could just give us a little bit what you think 
that the movie sales are in the edited version it would be helpful.
	MR. FEEHERY.  I will get that for you, Mr. Chairman.
	MR. STEARNS.  And what percentage of the total revenue is probably 
the better if you don't want to reveal the percentages, and I guess the real 
question is, can I buy an edited version that the movie industry does?  
Can I buy that edited version I see on the airlines, Mr. Erb?
	MR. ERB.  No, sir, you can't.
	MR. STEARNS.  Okay.
	MR. ERB.  Those movies are edited by a company called Swank 
which has a contractual relationship with the studios, and part of that 
contractual relationship is that those movies may not be sold to the 
public.
	MR. STEARNS.  So Ms. Bronk, it looks like the movie industry is 
doing exactly what you are saying that these folks should not be doing 
and they are selling it to the cruise ship, the airlines and foreign countries 
yet you are complaining that these people want to do the same thing and 
so I just find an inconsistency.  Does that make any sense?
	MS. BRONK.  Well, there is a difference between authorized editing, 
and I would assume, and I don't know, but I would assume that Swank 
does have the permission of the producer, the director, whoever owns the 
copyright on that film.  They have decided to give Swank artistic license.  
You know, and I go back to--I was thinking about what you were saying 
about the Cliff Notes version because as a parent, I am constantly in that 
"Beowulf" struggle, if you will, but I think that there is a reason why in 
literature, you know, since the beginning of time, we have focused on the 
classics for children and we have tried everything that we can to make 
sure that the children get the why's, the wherefore's and the tenets of the 
classics in their unedited versions.
	MR. STEARNS.  Mr. Erb, it doesn't appear to me that they are saying 
they are willing to do this editing and give the authorization to this 
company to do it.  They are sort of saying we want to control everything 
here, and I don't know if monopoly is the word but at least the 
appearance is, they want to control but they don't want you to have that 
control because for some reason they don't trust you.
	MR. ERB.  Well, the best solution here, clearly, Mr. Chairman, would 
be if the studios would edit their own movies, and that would solve all of 
the debate.  The issue would be over, and frankly, it was always our hope 
that our effort would have that result and we would have walked away at 
the end of the day feeling as though we had been successful if we could 
just get Hollywood to offer edited--
	MR. STEARNS.  You had a very high purpose in mind.
	MR. ERB.  We did, and in fact, when the VHS format was the only 
format available, it would have been much more difficult to deliver 
edited movies but they did announce at the time that DVDs came out that 
they would start to provide on a DVD because of the larger scale that the 
DVD format provides an R or PG-13, a PG and a G-rated version of 
every movie, and there actually were four or five movies produced in 
that format.  They are incidentally historical items now that will probably 
appear in the Smithsonian at some point in time.  If you find one, I 
suggest you hold onto it.  It will be worth a lot of money one day.  
Those--but they stopped after those four or five movies for no reason, 
with no explanation and have never provided them since, and if they 
would just do that, this debate would be over.
	MR. STEARNS.  Mr. Barton.
	CHAIRMAN BARTON.  Thank you.  Well, I think we all are in 
agreement that America is America because we protect individual 
property and property rights and creativity, freedom of speech and the 
First Amendment.  That is what makes us a great society.  But there are 
lots of nuances within that about how different Americans have different 
values and that is what we are trying to figure out here.  You know, in 
1939 when "Gone with the Wind" was made, when Clark Gable walked 
out at the end of the movie and turned around to Scarlett O'Hara, or 
Vivian Leigh, and said, "Frankly, Madam, I don't give a damn," it had an 
impact because that was a word that you didn't hear on the radio or you 
didn't hear in the movies.  I mean, that was creative and it did have 
dramatic effect because it was so, almost in the movie context, unique.  It 
also took major, major negotiation to get that in the movie but it was in 
the movie.  Today there are many, many movies that in every sentence 
there is a profanity, you know, and I am going to change the verb but, 
you know, when some of the dialog is "what the flip is going on, it has 
been a flipping day, I am so flipped up, I don't know what the flip I am 
going to do" and the other character says, "I agree with you" you know, 
and it just goes on and on and on.  I don't see a whole lot creative about 
that.  I mean, it just kind of loses context.  So I understand that the 
creative community has got the right to be creative and I understand in 
America that means you have the right to be vulgar and you have the 
right to be gross and you have the right to be profane but I don't think 
that sells if it is just repetitive.
	So my first question to you, Mr. Feehery--and it is good to see you 
on that side of the podium.  I am used to seeing you back here or calling 
me from the Speaker's office and telling me I have to do something.  It is 
good to have you over there for a change.  Do you off the top of your 
head know what the movies that are actually nationally distributed, what 
percentage have the different ratings like G, PG, MA and R?  I mean--
	MR. FEEHERY.  Yeah.  The MPAA-rated films, about 4 percent are 
rated G, about 11 percent are rated PG, about 24 percent are rated PG-13, 
62 percent are rated R and 0.17 percent are rated NC-17.
	CHAIRMAN BARTON.  Sixty-two are rated R.  Now, do you know 
what the sales percentages are?  Do the sales percentages track that?
	MR. FEEHERY.  You know what, I don't have those percentages in 
front of me.  I know that last year a lot of family movies did very, very 
well at the box office.  I don't have the percentages in front of me.
	CHAIRMAN BARTON.  Okay.  But in general, I am not tying you 
down to specifics but you said 4 percent are G and 4 percent are PG.  Is 
that--
	MR. FEEHERY.  About 11 percent are PG.
	CHAIRMAN BARTON.  Eleven percent.
	MR. FEEHERY.  And then 23 percent are PG-13.
	CHAIRMAN BARTON.  But 62 percent are R but the PG and the G 
have a higher percent of actual viewing.  Is that--11 percent are PG but it 
has got 20 percent of the market?
	MR. FEEHERY.  I don't have that breakdown for you, sir.
	CHAIRMAN BARTON.  Mr. Erb, do you know?
	MR. ERB.  I don't have the breakdown, the actual numbers, but I am 
assured that what you say is absolutely true.
	CHAIRMAN BARTON.  I mean, is it fair to say that while 62 percent of 
the movies that are made in America are rated R, they have considerably 
less than 62 percent of the market?
	MR. ERB.  And conversely, while only 4 percent are G, they have a 
much higher percentage.
	CHAIRMAN BARTON.  Is that a--Mr. Feehery and Miss Bronk, do you 
agree that generically that is a fair statement?
	MR. FEEHERY.  I think that kind of confirms what Miss Bronk was 
saying.  Miss Bronk was saying, you know, the artistic impulse is alive 
and well and they--
	CHAIRMAN BARTON.  We are not here to constrain artistic impulse, 
okay?  If you want to make a movie and every word is a cuss word 
spoken naked in front of a camera pouring chocolate over you, go to it.
	MS. BRONK.  I think that is being released at Sundance this year.
	CHAIRMAN BARTON.  I don't think it is going to sell but if you want 
to do it, God bless you.  That is what America is all about.  Now, my 
point is, why doesn't the industry do what Mr. Erb encouraged you, edit 
different versions for the PG market and the G market so that if you put 
all this--I was in Hollywood last summer and I went around to every 
major studio head and had a very nice chat in their offices with all their 
Oscars arranged around them on shelves and stuff, and they all to a 
person from the Disney to the Warner, you know, right on down the line, 
how expensive it is to make a movie.  If you want a general distribution 
movie, it is going to cost you $100 million minimum just to scratch, just 
to scratch.  If you invest that kind of money, why in the world wouldn't 
you all have an R version that is totally as creative and then take that 
same print but edit it a little bit so that the PG and the general admission 
market might buy it too?  I would think that would be good business.  
Why don't you do that?  Either one of you.
	MR. FEEHERY.  Mr. Chairman, I would say that at the MPAA, we 
don't get into the commercial decisions of the studios.  They all make 
decisions based on their business models.  My experience with them is 
that they want to the best thing they can for their stockholders.  So they 
probably look at the business models--they have not explained those 
business models to me so I don't have a complete answer for you.
	CHAIRMAN BARTON.  Mr. Aho.
	MR. AHO.  I don't think it is a business-model decision.  I have had 
probably 30-some meetings with studios discussing this issue.  I think it 
stems back to the directors.  Directors simply don't want--directors 
simply do not want--you know, they don't want people to see versions of 
their movie without that stuff in them.  I have heard directors say to me, 
say that we all loathe the fact that we have been forced contractually 
through our directors' agreements to offer up TV versions and airline 
versions; we hate them.  So I don't think it is--it is not a business 
decision.  I am quite certain of that.  It would be very easy, especially 
with, you know, high-def and Blu-ray and some of the capacity on DVDs 
to offer another version, to offer alternate scenes and things.  That is not 
the problem.  The problem--
	CHAIRMAN BARTON.  My time has expired.  I have got one final 
question.
	MR. STEARNS.  Mr. Chairman, why don't you take your full--we are 
going to have a second round.  If you would like to take your second 
round right now, feel free to.
	CHAIRMAN BARTON.  I want to ask--your company was buying a 
hard copy, editing that copy, making a dub of it but an edited dub and 
then selling is.  Is that correct?
	MR. ERB.  And renting.
	CHAIRMAN BARTON.  But you--
	MR. ERB.  We bought an original copy for every edited version that 
was produced, so there was no economic loss whatever to Hollywood.
	CHAIRMAN BARTON.  So if Mr. Stearns wanted to buy an edited 
version of a movie and Mr. Murphy did and I did, you would buy three 
copies?
	MR. ERB.  That is correct.  Originally our business format was that 
you had to buy the original, send it to us or bring it to us and we would 
edit it.  That just became too cumbersome as we got larger and so we 
ultimately got to the point where we purchased the movie for the 
customer or the customer verified to us in writing that they already 
owned the movie, because we didn't want to--
	CHAIRMAN BARTON.  But you physically, you made a copy that was 
physically different than the copy that was provided to you?
	MR. ERB.  That is correct, and--
	CHAIRMAN BARTON.  And you edited out the violence or the sex or 
the profanity?
	MR. ERB.  That is correct.
	CHAIRMAN BARTON.  And what the court ruled, they said Mr. Aho's 
technology doesn't change--it takes the DVD and just basically he 
programs so it skips over certain things but it doesn't change the hard 
copy.  You actually create a copy that is physically different, so he is 
legal and you are not.
	MR. ERB.  That is fundamentally--the issue surrounds the definition 
of the phrased "fixed copy" and I wish that Congressman Green had not 
left because he said he is editing movies at home, and the reality is, he is 
probably in violation of the law if he is doing that.
	CHAIRMAN BARTON.  I doubt that he is going to be arrested though.  
Now, Mr. Aho, your business is still functional?
	MR. AHO.  Yes.
	CHAIRMAN BARTON.  You are in business and--
	MR. AHO.  That is correct.
	CHAIRMAN BARTON.  --Mr. Erb, you have gone out of business?
	MR. ERB.  That is correct.
	CHAIRMAN BARTON.  What were your sales the last year just kind of 
generally?  I don't need--if you are privately held, I don't need to know 
the exact number but were you--millions of sales or hundreds of 
thousands or--
	MR. ERB.  No, we were--again, we both rented and sold and just to 
clarify, if we had 10 movies in rental circulation, for example, we owned 
10 copies of the original and kept them in a separate closet, and yes, our 
revenues were in the millions.
	CHAIRMAN BARTON.  In the millions.  So Mr. Feehery, your people 
because of artistic value are just going to use profanity away with that.  
You are just going to throw all that away?  You are not interested in a 
broader market?
	MR. FEEHERY.  Well, Mr. Chairman, actually we had some very real 
problems with CleanFlicks.  For example, I have an example here where 
you could just check off a box and say yeah, I already own this DVD and 
just send me the edited version, so--
	CHAIRMAN BARTON.  Well, forget that.  They are out of business.
	MR. FEEHERY.  Well, I know, but that was--
	CHAIRMAN BARTON.  That is not my question.  My question is, to 
protect the director's artistic creativity, you are going to accept a smaller 
market?
	MR. FEEHERY.  Well, I think that like any business, the motion 
picture business is a complicated business and there is a--
	CHAIRMAN BARTON.  Are there any plans right now for any of the 
major studios to put out edited versions of their films, yes or no?
	MR. FEEHERY.  I don't know.  I don't know the answer to that 
question because that would be a commercial decision of the different 
studios.
	CHAIRMAN BARTON.  Can you get the answer to that?
	MR. FEEHERY.  I will try to get the answer for that, yes, I will.
	MR. ERB.  And Mr. Chairman, if I could just make one quick 
comment.  Not all movies--and we are talking in generalities I know 
here--but not all movies are susceptible to editing and so the movie that 
you described where every single sentence, for example, it probably has 
a subject matter content and probably is not one that is really realistically 
editable.  But I am glad Mr. Aho used the film "The Patriot."  This is a 
perfect example of a movie in my judgment which should be--everybody 
in America should see this movie, and it should be in the public school 
systems, and but for a couple of scenes, one of which we saw and then 
another one that occurs later in the film that are quite gory and quite 
bloody, the removal of those does not in any way change the impact of 
the film or its validity or its value and yet that film is probably for my 
parents going to be one that they couldn't put their children in front of 
because of these gory scenes, and there is just no reason for that.
	CHAIRMAN BARTON.  Well, I just think it is unfortunate, Mr. 
Chairman, that, you know, we passed this law and it allows Mr. Aho's 
technology, which is a good thing, but yet it doesn't allow what Mr. Erb 
was doing, although it looks like he bent over backward, bought the 
copies and all that and there may be a disagreement whether it was self-
enforcing or what, but we obviously have a market in America for 
family-value entertainment and we have got artists that can provide it 
and they for their own reasons like to spice it up a little bit and that is 
preventing a large segment of the market from developing, and I think 
that is too bad.
	MR. STEARNS.  Will the gentleman yield?
	CHAIRMAN BARTON.  Yes.
	MR. STEARNS.  Maybe one area that we could explore on the 
questions that the Chairman is talking about, is this a question of money?  
I mean, we keep talking about artistic creativity that you don't want to 
sacrifice.  Is it possible that the Motion Picture Association doesn't want 
to do this because the original film then won't be bought and the price 
margin is such--in other words, I guess the question is to the group off of 
Mr. Barton's time, is there--Mr. Erb, do you think there is a question of 
money here involved besides artistic protection?
	MR. ERB.  Mr. Chairman, I think that different directors fall in 
different categories and certainly I think Mr. Aho has identified a certain 
group of directors that simply produce material that they do not want 
changed in any way for whatever reason, and there may be a variety of 
movies behind that.  I don't think that it is an economic issue.  While I 
understand Ms. Bronk's statement that there are some actors and 
directors that may produce movies for next to nothing, I don't find any of 
the directors with whom I am familiar down in the soup kitchens.  Most 
of these people are multi-billionaires, if not millionaires, and so it is not 
an economic decision.
	CHAIRMAN BARTON.  We are okay with them being multi-
millionaires.  That is a good thing.
	MR. ERB.  And I am not--
	CHAIRMAN BARTON.  It is more money to tax and--
	MR. ERB.  I am not--
	CHAIRMAN BARTON.  --more homes to have events in.  I mean, that 
is not all bad.
	MR. ERB.  And I am not denigrating the point.  I am just pointing 
out--
	MR. STEARNS.  Use more energy.
	MR. ERB.  I am not denigrating the point.  I am just pointing out that 
it is not an economic or a business decision.
	CHAIRMAN BARTON.  My final question:  Do we need to go back and 
revisit the law and modify it so that under--I don't want an unlicensed 
editing process.  I think that the creators ought to be able to oversee or 
sign off on the edited versions but I for the life of me can't figure out 
why the industry itself doesn't want to work with the Mr. Erbs of the 
world to come up with PG and G-rated versions of their R material that 
make them more money.
	MR. ERB.  And we would agree to having oversight on the editing 
process.
	CHAIRMAN BARTON.  Because if it is okay for Mr. Aho to do it, it 
ought to be okay in some way under a royalty or licensing agreement for 
Mr. Erb to make a physical copy that is a little bit different, and with 
that, I yield back, Mr. Stearns.
	MR. STEARNS.  The gentleman yields back.  Mr. Murphy.
	MR. MURPHY.  Thank you, Mr. Chairman.  I appreciate the 
comments here on this issue.  I wanted to ask a couple clarifications of 
some of these things, and that is, when the companies do make edits, let 
us say the way things stood, who makes the decision?  Who has the final 
word in the decision and where do you get the information to gather in 
terms of what is left in and what is not?  Does this include overdubbing 
some things too?
	MR. AHO.  Well, we don't overdub.  We are purely subtracting.  We 
skip and mute.  We don't add content.
	MR. MURPHY.  So not like what might be on broadcast TV where 
someone impersonates a person's voice--
	MR. AHO.  Someone would say like "bull spit."  No, we don't do 
that.  We--our policy is to get as descriptive as possible with what is--
what events are in each one of our categories, we have 14 categories, and 
then to let the consumer decide what in fact will be filtered in their 
experience.  So in some cases it is very easy.  We know what an F word 
is, and when you get to that category and it says, you know, F words, 
then we know what that is.  Some of them are a little bit more subtle such 
as what is action violence versus intense violence but we try to get as 
descriptive as possible and let the consumer decide.
	MR. MURPHY.  Is that--are those things then that the studios 
complain about in terms of what is left, either is skipped over or--I mean, 
do those come through as complaints from the directors and others that 
you have hurt their artistic license?
	MR. AHO.  I think the issue--and I have spent some time with the 
DGA as well in discussing these director issues, and I think it is just a 
matter in general of anyone else besides the director having any impact 
on how that--on that movie.  I think it is a lack of trust.  I think they are 
concerned with what we could do.
	MR. MURPHY.  Have there been specific complaints then from the 
movie industry about some of the ways these have been provided as an 
option?
	MR. AHO.  None to us, no.
	MR. MURPHY.  Mr. Erb, the same thing.
	MR. ERB.  Yes, there has been no specific complaints.  It is just a 
general complaint.
	MR. MURPHY.  But from the movie industry, are there specific 
complaints that have come up, examples of concerns?
	MR. AHO.  Well, I think when it comes to CleanFlicks, which wasn't 
our complaint, it was also the complaint of the court when they found 
their business was illegitimate.  ClearPlay is settled law and we don't 
have any complaints that I know of about the settled law.
	MR. MURPHY.  Well, but I thought the point that you were making 
before, sir, was that you were saying that some of the directors don't 
want anybody touching their films of any kind.  They didn't even like the 
versions that were on airplanes.  Is that--
	MR. FEEHERY.  I didn't say that.
	MR. MURPHY.  I thought--
	MR. AHO.  I made that point.
	MR. MURPHY.  You made that point?
	MR. AHO.  Yes.
	MR. MURPHY.  What is that based upon?  So you have heard some 
complaints or--
	MR. AHO.  Yeah, I have had directors tell me that, and in fact in 
public forums.
	MR. MURPHY.  I would like to explore that though.  What kind of 
things have they said about that?
	MR. AHO.  Well, they have said that in discussing the standard 
directors' agreements that they have sort of been forced into authorizing-
-unless they are a very powerful director, they are forced in authorizing 
airline and television versions and they don't like it.  They feel like it is 
not their work, it is not what they wanted to portray to the public and 
they wish they could turn back the hands of time and never have to agree 
to that again.  So when we take it a step further, we say now that a third 
party is in fact managing that process, I think that is just all the more 
egregious to that community.
	MR. MURPHY.  And Ms. Bronk and Mr. Feehery, these are not 
concerns you have heard from directors or from people in the studios?
	MS. BRONK.  It is a very amazing thing that we are talking about not 
money but the artistry of it, and I do find it amazing in this day and age 
that there are still artists that care about the integrity of their art and I 
think they should be commended.
	MR. MURPHY.  But that is stretching it.  I mean, there are some films 
that what they have in terms of violence and nudity or words are really 
not an art form but they are--
	MS. BRONK.  Well--
	MR. MURPHY.  I am not clear what content--
	MS. BRONK.  --I mean, is Shakespeare an art form?  It is all--what is 
wonderful in my living room where there probably isn't a more 
conservative television viewer than me, you know, I am offended by 
Cinderella's cleavage, so--
	MR. MURPHY.  That is a cartoon, you know.
	MS. BRONK.  Well, I have three daughters.  But I have an on and off 
button.  I have a fast forward button, and--
	MR. MURPHY.  But I don't think the concern is when you are 
watching Cinderella with your daughters present.  The concern is a lot of 
things around when parents are not present, that it is something that is 
encouraged by the industry.  When I look at things like the top ten 
grossing movies of all time, I think that only one of these, "Titanic" that 
had any nudity in it--"Lord of the Rings," "Pirates of the Caribbean," 
"Harry Potter," "Star Wars," "Lord of the Rings," "Jurassic Park," 
"Harry Potter," "Shrek" unless there was something there I didn't catch--
"Harry Potter."  These are the top grossing movies.  If it is a matter of 
answering to stockholders, which is that part of what has to happen, it is 
a business.  It always seemed to me that it is more difficult to make a 
movie that is art without using violence and foul language in it than it is 
to--I think some of the best movies I have ever seen have been ones that 
have been able to tell a story without going to that.  But I still think it is a 
matter for parents to know that they cannot spend all day, every day, you 
know, when the kids are watching TV doing that but I am one that tends 
to support providing some options for parents to have that but I want to 
know how that--
	MS. BRONK.  I also have an oven in my house that, you know, when 
I am not there I hope my children are not using it.  I have potato chips in 
my cabinet that I hope they are not eating for dinner, and there has to be 
some--as a parent, I am obligated to educate my children about what they 
should ingest both physically and in their minds.  So--
	MR. MURPHY.  I wish life was that simple but it is not and I think it 
is gratuitous to make a comment like that because it becomes a matter 
that there are--despite what people continue to deny to us, there are 
influences that happen when you are dealing with other messages there 
and it is a concern.  I mean, but the issue that goes with that is, yes, 
parents need to be very careful because it is sometimes not just an 
individual word or scene but it can be the whole theme of a movie, and if 
they are not even watching what their kids bring home, that is a problem, 
and I am with you on that.  That is a grave concern.  Parents ought to 
know the themes in the movies, what are the lessons that are taught.  
That has nothing to do with the words and you can't edit it out, just say 
don't buy it or don't let the kids rent it, but there are--whenever we have 
had hearings about other issues in terms of what can be done, it has 
continually come up to us, we can't--Congress and the government, they 
have been very good at legislating morality or mandating intelligence or 
litigating compassion but it has been a matter that somehow at least 
provides people with options so parents can be parents and that is the 
dilemma we have.
	MR. ERB.  Congressman Murphy, if I could just refer--make one 
comment about your reference to specificity of complaint.  Our--we have 
been in public debate with many members of the DGA at one point or 
another and our experience is that none of them have ever seen one of 
our edited movies, so it is not about specific complaints.  It is about a 
general concept.  I doubt that any of the others on the panel besides Mr. 
Aho and I have ever seen one of our edited movies either.  It is a 
conceptual problem.  It not a specific problem.
	MR. MURPHY.  Thank you.
	MR. STEARNS.  I thank the gentleman.  The gentlelady from 
Tennessee, Mrs. Blackburn.
	MRS. BLACKBURN.  Thank you, Mr. Chairman, and I thank all of 
you for your time and for being here, and I apologize that I have been 
kind of the up and down member back and forth.  It seems like this is 
appointment day and they all decided to show up at the same time, so 
thank you all very, very much for being here and working with us on 
this.
	Mr. Schultz, I wanted to ask you a question.  The video cards for 
computers that have the video capture devices on them that would 
essentially copy the content of a movie from a DVD or from a TV cable 
and feed it through the computer, do any of the current video cards, any 
of these video cards have the ability to copy that content and feed that 
through the computer from your movies?  They are used for games.
	MR. SCHULTZ.  Well, I am not familiar with all the different 
specifications but generally when you have video cards, in order for a 
computer to work at all to display video, a copy has to be made.  I mean, 
this is the way copyright law is now.  It ended being sort of a regulatory 
scheme for all the computers in some ways.
	MRS. BLACKBURN.  Okay.  So you have got a video card and it has a 
video capture device and you can capture that content and feed it through 
the computer and then are consumers able to edit that copy from their 
computer, that captured copy from their computer?
	MR. SCHULTZ.  Many of them are in fact.  It depends--I mean, you 
are describing a general system so I am trying to extrapolate a little but 
there are many options where consumers can take screen shots where 
they take a picture of what is on their screen at a given time or take a 
little snippet of something, and in fact Mr. Barton earlier referred to 
YouTube, and often you will see on these kind of video websites scenes 
from when someone is playing a video game or doing something else on 
their computer, you will see a small snippet that they want to show their 
friends.
	MRS. BLACKBURN.  Are there any lawsuits against any of those 
capture devices?  Do you know?
	MR. SCHULTZ.  There have been some threats against some people 
who try to capture--to sell cards that allowed you to capture and save 
things but there are none currently going on that I am aware of although 
there is intense pressure on those manufacturers to not expand those 
capabilities.
	MRS. BLACKBURN.  Is that practice of taking that video--is that 
basically the same process that Mr. Erb was describing?
	MR. SCHULTZ.  Well, I don't know that Mr. Erb went through all the 
details, but as I understand it, there are actually two different parts of the 
process that need to be addressed.  One is, how do you get the content 
out of the DVD in the first place, and this is when I mentioned H.R. 1201 
because there is an argument that has been made by the motion picture 
studios and other content owners that even getting any of the content out 
of the DVD to begin with to make the editing is a violation of the law, so 
that needs to be addressed.  Now, if it has been gotten out in an 
authorized way through sort of a DVD player on a computer, usually it is 
then locked down so that it is hard to capture for various reasons.  But if 
you are able to get it, you know, then the actual capturing of the content, 
if the end result of what you do is considered a fair use, then many courts 
have held that the intermediate copies that you have to make, the editing 
copies, are also fair use.
	MRS. BLACKBURN.  Okay.  Mr. Feehery, I wanted to come to you 
because I think in large part much of the discussion that has been 
generated about this comes about because of what we see as the ratings 
creep going on and the Harvard study of course alluded to that and, you 
know, Ms. Bronk, I would take issue with some of the things that she has 
said.  While I am a fierce advocate of intellectual property, I think that 
there are--I would take issue with what you said, and people expect some 
discretion and decency and some wise choices made and many times that 
is the problem that they have with how movies are rated and parents feel 
as if they are caught unknowing, and I had a question from just having 
gone to a theater lately, where do you display an explanation of how a 
movie is rated, and if a parent is taking their child to a theater to see a 
film and they walk in there, where can they get that information for what 
the MPAA's reason was for rating a film a certain way?
	MR. FEEHERY.  They can go to MPAA.org.
	MRS. BLACKBURN.  No, I am talking about when they go to that 
theater.
	MR. FEEHERY.  Oh, in a theater.  There should be descriptors as you 
walk in the theater.
	MRS. BLACKBURN.  Are they readily available?
	MR. FEEHERY.  I think they should be.  In most theaters they should 
be readily available, yeah.
	MRS. BLACKBURN.  Okay.  Where would a parent find those?
	MR. FEEHERY.  Well, there is plenty of different places--the 
newspapers, our websites, right outside the box office, usually they have 
all kind of descriptors where you can see the ratings.
	MRS. BLACKBURN.  Okay.
	MR. FEEHERY.  And the descriptors.
	MRS. BLACKBURN.  Okay.  Well, I guess I was at a theater that just 
did not have those readily available and could not see them and--
	MR. FEEHERY.  Tell me where.  I will call my friends at NATO.
	MRS. BLACKBURN.  Well, I would encourage you all to be certain 
that those are--the theater owners should be certain that that information 
is there so that the parents can see that easily because much of the 
discussion that we have had on this issue, on the ratings issue, on the 
ESRB issue comes from the fact that people cannot find the information, 
they don't understand how or why a decision was made, and while they 
want to be able to--they are very frustrated with the fact that in the 1970s 
when they were a teen, certain things would have been rated R and now 
they are seeing that as a PG or a PG-13 and it gets to be very, very 
confusing, especially when you are trying to rear children and put some 
controls around there, so I would encourage you all to maybe revisit that.
	MR. FEEHERY.  Okay.
	MRS. BLACKBURN.  Thank you very much.  Mr. Chairman, I yield 
back.
	MR. STEARNS.  Either one of the members on this side have 
additional questions?  We are getting ready to close up.  I was going to 
ask one myself but feel free of the gentlelady from Tennessee or Mr. 
Murphy.  If not, I want to thank all of you for coming.  I just have one 
question for Ms. Bronk.  Are there some in the industry that are upset or 
unhappy with ClearPlay's technology?  I mean, how do you feel--I mean, 
you saw what they are doing and they are out there in the market and 
they are continuing to do this.  I mean, just be honest, how do you feel 
about--
	MS. BRONK.  I actually have a question about that as a parent.  How-
-if a kid watches a sanitized or filtered version of "The Patriot" and they 
don't realize--my daughter goes over to her friend's house and her 
mother plays a sanitized version of "The Patriot" and I think that well, 
she has watched "The Patriot."  How do we know--how does a kid know 
which version they have seen?  Do you--are there resources for the 
parents to give to the kids so that the kid knows what they have seen and 
that they haven't seen the full version?
	MR. AHO.  Well, in your home, you have to have a player that has 
ClearPlay on it and then you have to physically turn ClearPlay on and 
choose to watch the movie with ClearPlay.  I guess if you were in 
somebody else's home, there is a small safeguard in that at the beginning 
of the movie we agreed as part of the Family Movie Act to display a 
prominent--I think it is eight or nine seconds--a prominent notice that 
this movie has been--your viewing of this matter was revised with 
ClearPlay.
	MS. BRONK.  Have you created any resources for the children so that 
they know that they--I mean, as a parent, I think that would be helpful to-
-so that my 10-year-old knows that she hasn't seen the real version of 
"The Patriot" but she has seen a filtered version, so--
	MR. STEARNS.  Generally we ask the questions but--
	MS. BRONK.  I am sorry about that.
	MR. STEARNS.  That is okay.  Mr. Murphy, go ahead.
	MR. MURPHY.  Just on that because I am curious, is this in reference 
to something like if a child goes to another parent's house and says but 
my mom let me see the movie?  Is that what that is about?  I mean--
	MS. BRONK.  Well, also I am thinking about my own children 
thinking that they have seen "The Patriot" and they are not realizing that 
no, you didn't see the real Patriot and it is not appropriate for you and 
you are not Patriot-ready.
	MR. MURPHY.  I am not familiar with that.  Was that somewhere 
between R and PG?
	MR. AHO.  It was an R rating.
	MR. MURPHY.  No, but I am not--if some certain language and 
scenes are taken out of there, does the child still get the theme of the 
movie which is there?  I mean, if they discuss the Revolutionary War in 
the second grade without all the other details, that means they didn't 
cover it.  I just wondered.  Anyway, sorry, Mr. Chairman.
	MR. STEARNS.  Mrs. Blackburn?  Okay.  Let me just close by saying 
the point of this hearing was not censorship.  The whole point is to give 
the option, choice to the parents, give the parents the power to be able to 
make these choices, so this is what the hearing is about and we see 
through this discussion that there is available now--I guess Mr. Aho, 
through your company, a parent can go out and buy your device and 
today take it home and they--it will be preprogrammed, right, for certain 
movies?
	MR. AHO.  Yes.
	MR. STEARNS.  So you would tell them--I am just looking at how it 
actually works, so if a parent wants to do this, they go out and buy your 
player, they bring it home.  They go to Blockbuster, they bring home a 
DVD and the player is already preprogrammed with codes, flags on the 
player to delete these scenes?
	MR. AHO.  Filters for some of the movies come loaded.  You go to 
our website when you sign up and you get filters for 2,000 movies that 
are--
	MR. STEARNS.  So you download those--
	MR. AHO.  And then as more come out every week as the DVDs are 
released, we will provide filters for them.
	MR. STEARNS.  So your device is hooked up to the computer and so 
you download--if you have a movie, you just download those codes that 
go into your device and then it automatically edits it?
	MR. AHO.  It actually can work any way that you move data.  I mean, 
we have a couple of products, one that you just take a little USB stick, a 
little jump drive, a flash drive, stick it in your computer, and that is what 
this one is.  We have got another one with a modem, and the vision is, is 
that virtually any way you watch movies, whether it is cable, satellite, set 
top, video on demand, any way that you watch movies, you could have 
this option in the same way that you have the option of pressing a mute 
option on virtually any device.  That is absolutely feasible 
technologically, and then people could decide, you know, do I want to 
pay for this, how do I want to watch the movie.
	MR. STEARNS.  Well, just to take their side for a moment, they could 
argue that your people would be deleting maybe sex and profanity and 
violence but you might also be deleting some things that go to the heart 
of the story where you have to have that exclamation of emotion to do it.  
You are making that decision, and from their standpoint, they are saying 
whoa, we don't want you making that decision.
	MR. AHO.  And I understand that.  I mean, if we take out the heart of 
a movie, we will go out of business because you don't want to watch a 
movie with the heart removed, and we cannot succeed.  I think Mr. Erb's 
comments were right. The comments are always--the concern is always 
that the sky is falling but we have never really looked out the window.
	MR. STEARNS.  But no one is even regulating or determining what 
decisions you are making.  You make them pretty much on your own.
	MR. AHO.  In the same way that when a television version is 
released, someone has made those decisions.  When an airline version is 
released, someone has made those decisions, and we trust that the end 
product will be something that we will find satisfactory.  If it is not, we 
move on and we find another way to be entertained.
	MR. STEARNS.  Are you progressing?  I mean, are your revenues 
increasing pretty dramatically every year?
	MR. AHO.  They have been, yes.
	MR. STEARNS.  How many players are out there in America today?
	MR. AHO.  We have--there is about 100,000-plus players out.  We 
hope to have a lot more.  Obviously some litigation slowed us down.
	MR. STEARNS.  So you have 100,000-plus players and you have over 
2,000 films that you have developed the flags for?
	MR. AHO.  Yes.
	MR. STEARNS.  Well, I think we have covered this, and I appreciate 
again the patience and I am glad we didn't get interrupted with votes, and 
with that, the subcommittee is adjourned.
	[Whereupon, at 3:40 p.m., the subcommittee was adjourned.]