SPA Testifies Before Congress on the National Information Infrastructure
Copyright Act

Testimony Calls for Measures to Protect Development of "Digital Highways"

Washington, D.C., Feb. 7, 1996 - In congressional hearings today, the
Software Publishers Association (SPA) called for legislation to ensure
"digital highways" will realize their full promise of communication,
education and commerce for software companies and consumers.

SPA testified before the House Judiciary Subcommittee on Courts and
Intellectual Property on H.R. 2441, the National Information
Infrastructure Copyright Act, an act intended to modify U.S. copyright law
for digital highways of the Internet and other interactive networks. In
its testimony, SPA supports three objectives of H.R. 2441 - to ensure
transmissions of computer programs are fully protected by copyright, to
prohibit "black boxes" used to circumvent technical protection for
computer programs and to prohibit removal or alteration of copyright
management information, a.k.a. digital "title pages."

Testifying for SPA was Garry McDaniels, a former fourth-grade teacher and
currently president of Skills Bank Corp., a leading developer of
educational software. Skills Bank is representative of the entrepreneurial
nature of the software industry, in which more than half the firms have
estimated annual revenues under $1 million. Despite the company's small
size (about 70 employees), Skills Bank software for reading and math is
used by almost 13,000 schools across the United States.

"The digital highway promises to even the odds for entrepreneurial software
companies to succeed," McDaniels said. "By almost any measure, Skills Bank
is a small business. But on the Internet, the size of your company isn't
important - all that matters is the quality of your software and your
service to consumers.

But the Internet alone isn't enough for Skills Bank and other software
entrepreneurs to succeed, nor is it enough for our customers to enjoy its
full promise," McDaniels added. "Since 1986, Skills Bank has spent $20
million in research and development - sometimes as high as 40 percent of
our revenues - while prices have declined dramatically. Companies like
ours need a strong copyright law to protect that investment through
market-driven licenses and technical protection."

The need for strong copyright protection is underscored by losses from
software piracy, the illegal duplication and distribution of software
without permission of the copyright owner. The annual SPA Global Software
Piracy report estimates that over $1 billion in business applications
alone was pirated in the United States in 1994 from all sources, including
bulletin board services (BBS) and the Internet. For example, one Internet
site was estimated to have accounted for more than $1 million in pirated
software in just three weeks of operation.

"Without the measures now before Congress, it's true that we may make some
software available on the Internet for promotional purposes," McDaniels
said. "But we just could not afford to risk putting our best programs and
multimedia works on the Internet. And while our customers, schools and
parents, could still license our software through stores and direct mail,
they would not enjoy the full promise of interactive digital highways. "

SPA's focus is on companies developing and publishing software applications
and interactive content. SPA is the leading trade association of the
desktop software industry, representing the leading publishers as well as
many start-up firms in the business, consumer and education markets. Its
1,200 members account for 90 percent of the sales of the U.S. packaged
software industry. Hundreds of these companies look to SPA to protect
their intellectual property and promote trade in the United States and
around the world. SPA is an international organization with offices both
in the United States and Europe. SPA press releases are available through
CompuServe (GO:SPAFORUM), on SPA's Web site at http://www.spa.org or
through Fax-on-Demand at (800) 637-6823.

Software Publishers Association
1730 M St, Northwest, Suite 700, Washington, D.C. 20036
202-452-1600,  Fax: 202-223-8756
 
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