September 2008

The Departments of Justice and Commerce came out against key elements in the Enforcement of Intellectual Property Rights Act, a bill that would boost the government's efforts to crack down on intellectual piracy, saying that they would turn the Justice Department into a de facto legal team for private industry and result in Congress trying to run the president's office for him. DOJ and Commerce said they support the goal of protecting intellectual property rights, but in a letter to Leahy and Specter, top lawyers with both departments said they could not support authorizing the attorney general to pursue civil suits against copyright infringers, saying that it would result in government lawyers working pro bono to collect judgments for industry. They said that with a limited budget, pursuing civil cases would have to come at the expense of criminal prosecutions, which only the government can pursue, adding, "The resources of the Department of Justice should be used for the public benefit, not on behalf of particular industries that can avail themselves of the existing civil-enforcement provisions." They also argued that creating a separate intellectual-property-enforcement officer in the executive office of the president would be "a legislative intrusion into the internal structure and composition of the president's administration" and, thus, a violation of separation of powers. They said they were reserving judgment on the final bill in the hopes that it could be changed. Otherwise, they could not advise the president to support it.

Gigi B. Sohn, president and co-founder of Public Knowledge, said, "We are pleased that the Justice and Commerce departments agree with us that it would be a mistake to give the Justice Department the authority to pursue civil suits in copyright cases. As the departments said in the letter, and as Public Knowledge has said repeatedly, the private sector has all the resources necessary to pursue cases that companies want to pursue. The government should not be turned into the law firm for wealthy copyright holders. We hope that the sponsors of the bill will take these views seriously and will forgo action on the legislation for the foreseeable future."

As expected, Rep Lois Capps (D-CA) introduced a bill that would allow broadcasters to continue to air a digital-TV-education message or, if need be, emergency information for two weeks after the switch to DTV transmissions Feb. 17, 2009. Under the SAFER Act (the Short-Term Analog Flash and Emergency Readiness Act), a slide in both English and Spanish would continue to air in analog for two weeks, providing a phone number for more information on how to prepare for the DTV transition.

[Commentary] The mass audience reached by the Big 4 broadcast networks will be eroded by general entertainment cable networks in less than five years, when rivals seize more of their triple advertising dollar, pricing and viewer edge. That isn't a guess, according to Bernstein Research -- it's a mathematical certainty. The outcome will be dramatic. Agencies and advertisers will rebuff pricey bottom-rung television programs as they continue to shift more of their spending to cable, the Internet and wireless mobile platforms. Protracted economic weakness will complicate this shift and weaken overall ad spending. At the same time, domestic broadcast TV producers and syndicators will find it more difficult to secure traditional prices for their programs. Major cable networks will continue to wrestle with the high cost of original production that has long dogged broadcast networks -- and they all will need to resort to cost-cutting to maintain profits. One thing is clear: Major cable networks are on the upswing, while broadcast networks ABC, CBS, NBC and Fox collectively are on a certain decline.

[Commentary] TV networks now argue there should be no additional federal regulations for identifying product placements — like extra visual messages at the time of their appearance. If so, Friedman suggests the networks get rid of identifying messages that already exist during current TV shows. If product placement and branded entertainment deals are here to stay, networks can't argue that interrupting the context of a show with product placement identification is hurtful — especially when they do it all the time. Not only do networks advertise their own shows during their own shows, but, in specific cases, will give a TV marketer — also, no doubt, a regular network commercial advertiser- a piece of that promotional swipe. A fragmented video world means TV network marketers fight for every bit of non-paying marketing time and space to promote their wares. According to current Federal Communications Commission rules, there need only be one announcement of identification for a product placed or integrated into a show. That typically comes right after the end of a show in some typically fast moving end-credits, noting usually that "paid consideration was provided by..." for such placements. Networks argue that it's overkill to offer up more regulation.