The Hollings Bill: Doomed But Effective
By Jeffrey H. Birnbaum

(FORTUNE Magazine) – U.S. senators are powerful and egocentric enough to overlook most of their colleagues' indiscretions: alcoholism, philandering, and, of course, betrayal of principle to win reelection. One act is beyond the pale, however: infringing on one another's committee jurisdiction. Yet South Carolina's Ernest "Fritz" Hollings has committed this infraction with his Hollywood-backed bill to safeguard digital entertainment.

Hollings chairs the Senate Commerce Committee, which oversees many things but not copyright legislation. The Senate Judiciary Committee has borne that responsibility since its inception in 1816, as Judiciary's chairman, Senator Patrick Leahy of Vermont, takes pains to point out. It's no surprise, then, that Leahy, who normally champions Hollywood on intellectual-property issues, is the nemesis of Hollings' proposal. "If the bill were to go directly to the [Senate] floor, I would take the time to give the Senate an education on it, no matter how long it might take--weeks if necessary," Leahy says in an interview. In other words, he would filibuster it to death. So much for Hollings' encroachment.

But that hasn't stopped the lobbying. Thousands of e-mails have poured into lawmakers' offices, and legions of CEOs have trooped to Capitol Hill. Since January the tech community has rolled out such heavyweights as Intel's Craig Barrett, IBM's Lou Gerstner, Dell's Michael Dell, Motorola's Christopher Galvin, NCR's Lars Nyberg, and Unisys' Larry Weinbach to rail against the Hollings plan. But the most active petitioner, Disney's Michael Eisner, not only favors the proposal but also is credited with instigating it. For him the Hollings bill--once known as the Disney bill--is a personal crusade that began two years ago with a luncheon speech in the Capitol in which he sought government intervention from an audience of 100 lawmakers.

Since then Eisner has testified before Hollings' committee and met privately with many officials. Leahy recalls a recent dinner with Eisner that included Hollings, Senator Ted Stevens of Alaska, the co-sponsor of Hollings' bill, and Vice President Dick Cheney. Disney declines to comment, but official Washington is abuzz about the Hollings-Eisner collaboration. Why would Eisner pair with Hollings when the committee chaired by his friend Leahy has control? "We've been absolutely scratching our heads about that; it's such a stupid move," says Gary Shapiro, president of the Consumer Electronics Association, which, along with pro-consumer groups and computer makers, opposes Eisner on the issue.

Lobbyists, who love to gossip, have their theories. The best is that Eisner cozied up to Hollings because the Commerce Committee deals with more issues that matter to Disney--especially broadcast and cable legislation--than does Judiciary, which is often preoccupied with judgeship battles. Another is that Disney went Senator shopping, and Hollings agreed with it more than Leahy. (Indeed, Leahy firmly disagrees with Hollings' approach.) Lobbyists also speculate that Eisner agreed to praise Hollings' tough and controversial proposal on Internet privacy, which other media companies shun, in exchange for Hollings' backing of Disney's digital rights bill. Disney denies it. Hollings won't say.

It's also possible that Eisner knew it didn't matter where the bill started. Despite the flap, Hollings has spurred Hollywood and Silicon Valley to redouble their efforts to find a technological fix to the problem of digital duplication. That's what sponsors of the measure actually want. "We don't know how to do that," admits Senator John Breaux of Louisiana. "We're sort of telling the industry to do this itself--with a deadline." In other words, think of Washington as a legislative cattle prod.

--Jeffrey H. Birnbaum