Wednesday, July 25, 2007

House Oversight and Government Reform Committee Hearing Highlights P2P Risks

This posting was written by John Scorza, CCH Washington Correspondent.

The risks of peer-to-peer (P2P) file-sharing technology and the need for legislation to protect consumers were the topics of a House Oversight and Government Reform Committee hearing convened on July 24.

Despite a voluntary code of conduct adopted in recent years by many P2P networks, there are indications that the risks remain high of inadvertently sharing highly confidential information through P2P technology. Describing a committee investigation that searched the popular P2P program Limewire, Chairman Henry Waxman (California) said “What we found was astonishing: personal bank records and tax forms, attorney-client communications, the corporate strategies of Fortune 500 companies, confidential corporate accounting documents, internal documents from political campaigns, government emergency response plans and even military operation orders.”

Federal Trade Commission Testimony

Mary Engle, associate director for advertising practices at the Federal Trade Commission (FTC), testified about the risks of P2P file sharing, including the inadvertent sharing of confidential information, exposure to adware or spyware, as well as possible copyright law violations and exposure to unwanted pornographic images. But Engle, like other witnesses, stressed the potential benefits of P2P technology. Benefits include transferring files more quickly, conserving bandwidth, and saving on maintenance and energy costs.

Citing a 2005 FTC report, Engle called for a balance between law enforcement and the promotion of new technologies. The report recommended that “policymakers balance the protection of intellectual property and the freedom to advance new technologies, thereby encouraging the creation of new artistic works as well as economic growth and enhanced business efficiency.”

Waxman sounded a similar note. “The purpose of this hearing is not to shut down P2P networks or bash P2P technology. P2P networks have the potential to deliver innovative and lawful applications that will enhance business and academic endeavors, reduce transaction costs and increase available bandwidth across the country. At the same time, however, we must achieve a balance that protects sensitive government, personal and corporate information and copyright laws.”

The text of the prepared FTC statement appears on the agency’s Web site —

A list of hearing witnesses, along with links to their testimony, is available on the committee’s Web site —

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