Government Report 97: Impact on Game Developers

From attempts to demonize computer games, force a government mandated ratings system on computer games, and censor the Internet to legislation designed to protect our games from piracy and enable new technology, the government exerts a profound but often invisible influence on our lives and our life's work. We have the power to influence the debate on these issues in our favor, but only if we're informed and know how to act.

Ever since the computer games business became big enough to attract real money, we've also attracted the attention of Washington. The past few years, our rapidly growing industry has been rocked by a barrage of Congressional hearings, new legislation, threats of new legislation, and landmark court cases.

It started with Congressional hearings into the "dangers" of computer games, and grew into threats of a government-designed and government-mandated rating system. Since then we've seen attempts to censor games, the Internet, and even e-mail. Some groups are lobbying Congress to force standards for new technology like DVD and HDTV without fully understanding the implications for computers. Congress is also on contemplating creating whole new classes of digital copyright protection laws and new cryptography laws. The coming years might see new government initiatives to spur research and development, and new initiatives to wire schools and libraries. Here are some of the issues facing our industry today:

1) Will Congress Force a New Rating System on Computer Games?
2) Will the Supreme Court Allow Net Censorship?
3) Will All Kids Get Computer and Internet Access?
4) Can We Stop Piracy?
5) Are Computer Games Eligible for R&D Credits?
6) Are Shrink-wrap Licenses Legal?

1) Will Congress Force a New Rating System on Computer Games?
Just when you thought we had dodged the government-mandated ratings bullet, Congress fired another broadside in their war against computer games.

Despite the computer games industry's near-universal adoption of a content-based rating system that is far more detailed, rigorous, and independent than those used by other industries, Senator Joseph Lieberman (D-CT), Senator Herbert Kohl (D-WI), and a group called the National Institute on Media and the Family (NIMF), have issued a blistering critique and concluded that there are "serious gaps in the system."

They gave computer game makers an A for adopting a "voluntary" ratings system, but they peppered the rest of the report with Cs and Ds.

Senator Lieberman said "I am primarily troubled by the content of the games themselves. The fact is, too many games now on the market this holiday season are more violent, more antisocial and generally more disgusting than ever." He also said "These games are the 1990s equivalent of coal in a stocking-dark, dirty, and dangerous in the hands of young children."

Was the Senator expecting the ratings system to somehow make games less violent, or put more social values in games, or make the content of games more pleasant? The ratings system was intended to inform parents of the content of games, not force changes in content.

I Have Here In My Hand a List of Ten

The Senator's list of the "Ten Least Wanted Computer Games" included the RPG Daggerfall, which was listed as inappropriate for children due to violent content. What the Senator did NOT disclose was that Daggerfall publisher Bethesda Softworks not only included a prominent box logo warning that the game is for mature audiences, but went to the extra effort and expense of including parental lockout controls.
In response to their inclusion in the list, Bethesda Softworks slapped a libel and product disparagement lawsuit on the Senators and NIMF. (We'll keep you posted on the results.)

Conspicuously absent from the list were numerous games that contain far more graphic violence than Daggerfall. Rather than list the games with the most violence or mature content, the list contained only high-selling action titles. (Are the Senators seeking to punish success?)

In their latest offensive, the Senators relied heavily on the NIMF survey, which they have uncritically embraced. So who is the Senators' latest strange bedfellow, the NIMF? What do they stand for? What's their agenda? And on what basis are they judging us? Are they truly impartial, or do they have an agenda that could potentially color their findings?

NIMF-Mania

I set out to investigate the NIMF survey, and I uncovered some revealing information.

NIMF purports to be "independent, nonprofit, nonpartisan, and nondenominational." But they don't claim to be independent of a future financial stake in game ratings biz. In fact, NIMF has developed a rating system of its own-a rating system they claim works with ALL forms of media.

NIMF claims their one-size-fits-all rating system, called the Children's Impact Statement TM, is superior to all current rating systems used on computer games, TV, and movies, etc. To bolster their claims, they offer more findings from their own survey. They conclude, not too surprisingly, that all current ratings systems are unacceptable, and a new rating system needs to be imposed on all media. The "independent" survey they commissioned found (also not surprisingly) that the rating system that deserved to be used on all media is the NIMF's own Children's Impact Statement TM.

So who owns and controls NIMF? I checked up on the organization through several sources, from their representatives to their Web site. When I called the organization for direct answers, the operator was cheerful and eager to answer. But before I asked any questions, I volunteered that I was preparing a story for the CGDA Report. She then refused to answer even basic questions, and hung up, saying that a PR person would have to call me back.

Eventually, a NIMF public relations person, Susan Eilertsen, called back. However, she spent most of our conversation asking questions about me, the CGDA, and my story.

I asked Mrs. Eilertsen who was funding the NIMF. She paused, then answered "a variety of health care foundations and individuals." When I asked for the specific names of health care foundations and individuals, she was silent. When pressed, she said that she was "not free to give that out."

I asked for specific information about the NIMF survey, and she again refused to answer. Finally, she said she would mail the press materials to me. I asked if that was the same press release that was on the NIMF Web site, and she said she did not know. She said that if I had any questions after receiving the press materials, I could call back. (I still have not received the press materials. If I get them by the next CGDA Report, I'll describe them them.)

Fortunately, the NIMF Web site (http://www.mediaandthefamily.org/) is far more forthcoming. The Web site reveals the names of the NIMF Board of Directors. It's composed mostly of doctors, but also has a public relations person, a child psychologist, a lawyer, a health care industry CEO, a TV producer (of a TV series called "Christy") and beloved TV host Captain Kangaroo (Bob Keeshan.)

But the Web site is utterly silent about NIMF's owners and sources of funding.

The Children's Impact Statement TM Rating System

The NIMF Web site boasts that the rating system they want to impose on America took "many months" to develop, and uses a "carefully-designed methodology." They compare their rating system to nutrition labels, which have succeeded due to their clear delivery of objective information from a legitimate source. In contrast, I found the Children's Impact Statement TM system neither clear nor objective, and created by a source with a serious conflict of interest.

The Children's Impact Statement TM has ten rating categories in four groups, with three possible ranks per category: a green dot for "go," a yellow dot for "caution," and a red dot for "stop." (What about games or videos or books with black and white packaging? What are they supposed to do? Pay extra for color printing just to put the cutesey stoplight colors on their covers?)

The categories include:

Bugs in the NIMF System

I found the NIMF rating system is ineffective for several reasons. Besides lacking context, it makes capricious judgments, useless distinctions, and blanket condemnations. It is condescending, clueless, and ultimately misleading.

1) Lack of Context

Many other content-based rating systems lack any sense of the context in which the content (violence, nudity, rough language, flawed character traits) appears, but this blind spot is particularly serious in the Children's Impact Statement TM.
For example, the universally praised Schindler's List would earn a red "stop" rating in every category of NIMF's Child Impact Statement TM. Yet this film is considered appropriate (even essential) viewing for children whose parents believe they are old enough to handle it. It's the textbook definition of "redeeming social value." Its recent television premiere was a huge success, and networks have made it clear they are taking it as indication that meaningful and worthwhile programming can flourish on broadcast TV.

Actually, Schindler's List is only 99.44% universally praised. One dissenting voice has popped up. As we go to press, Congressman Tom Coburn (R-OK) lashed out at the airing of the film as "an all-time low" in network programming. "Decent-minded individuals should be outraged," fumed the two-term Congressman, inexplicably reasoning that the grim Holocaust film would encourage the networks to air gratuitous sex and violence on TV. Since sixty five million American citizens tuned in to the three and a half hour movie, perhaps the Congressman thinks that one fourth of the nation's citizens are indecent-minded.

The context of the film is essential to understanding the content. The Congressman's lack of comprehension of the tremendous value of the film is very revealing. Even if we accept that the government has authority to pass judgment on creative works and constrain the exercise of free speech rights, is this kind of person that is qualified to do so?

2) Capricious Judgments

The Child Impact Statement TM ratings are capriciously bestowed and utterly inconsistent.

Final Doom gets three red stop lights for the Character Traits "respectful," "responsible," and "caring." But Star Trek: First Contact gets the best ratings- all green lights for its Character Traits. Apparently the genocidal Borg were properly respectful, responsible, and caring. (They took such good care of Data.) NIMF justifies the weaker rating because Star Trek's violence is "necessary to save humanity." Well, what do you think you're trying to do in Final Doom?

3) Useless Distinctions

The Child Impact Statement TM system obscures more that it clarifies by stamping the strongest possible condemnation on everything that has even a hint of violence.
The tame, hokey cartoon violence of the Power Rangers and Space Jam is given exactly the same violence rating as Doom, Mortal Kombat, and Natural Born Killers. They all get the harshest possible ratings: three red "stop" lights for amount of violence, graphic violence, and glamorized violence. (Did Bugs Bunny pull someone's spine out while I wasn't looking?) Tame Saturday morning action shows like Aladdin and Darkwing Duck fail almost as badly, with two red stop lights and one yellow caution Lights for violence.

Third Rock from the Sun gets a scarlet letter for sexually explicit language, giving it the ratings equivalency of the "The Seven Words You Can't Say On TV" or a dial-a-porn telephone line. "This show has many sexual innuendos [sic] and other comments," NIMF sniffs indignantly, apparently unaware that sexual innuendo is not the same as saying "you stupid &^*%*#^$@$!"

NIMF claims that "like nutritional labels, Children's Impact Statement TM will provide all the information parents want and need."

But a ratings system that cannot distinguish between the violence level of the Power Rangers and the violence level of Pulp Fiction is a ratings system that is worse than useless to most people in the real world. These blurred distinctions are not only confusing, they're potentially dangerous to parents who make the mistake of relying on them.

4) Blanket Condemnations

By the Child Impact Statement TM system, Little Red Riding Hood would earn red stoplights for graphic violence, perhaps even for glamorized violence, as the child is encouraged to cheer when the wolf is chopped up and disemboweled by the hunter. Could it really earn green go lights for "respectful" and "caring" character traits when the wolf maliciously eats granny? Come to think of it, most of the fairy tales dear to children over the centuries would likely fail the Children's Impact Statement TM. Were all of our ancestors warped by these stories?

We need to remember that most stories in humanity's history require an antagonist, a villain, who, by definition, fails the "Character Traits" test. If all characters must be respectful, responsible, and caring, creative people don't really have much elbow room to create dramatic action.

If you want to see how far this blanket condemnation extends, try rating the Bible using this system. (NIMF has not.) "Thou shall smite every male thereof with the edge of the sword, but the women... shalt thou take unto thyself" (Deuteronomy 20: 13-14). Could that be glorifying violence? How could the Bible escape an unsuitable rating under this system?

5) Condescending Summaries

NIMF warns that the humor on the Simpsons is "complicated and subtle," and therefore "may confuse kids elementary age and younger." Since when are we shielding our kids from complication and subtlety? Complication and subtlety are the basis of critical thinking, which is what we're supposedly trying to teach them in elementary school. And since when are elementary age kids confused by the Simpsons? That's a demographic group that LOVES the Simpsons and finds the show very funny.

Perhaps the humor is too complicated for the children of bluenose prudes who have insulated their families from subtle humor that's not always fully "caring." How reassuring that such people are working with the government to make sure that the rest of us view all media through their eyes. (Note: the two preceding sentences contain humor that may be too complicated and subtle, and may confuse people into thinking that they are statements of fact.)

Myst (which got green lights in everything except one yellow light for not "caring" enough) earned a warning that the "moody music" may make the game "scary" for young children.

These condescending summaries show very little respect for the intellect and common sense of both children and parents.

6) Clueless Interpretations

The Children's Impact Statement TM summaries consistently show that NIMF just doesn't get it.

For example, they give a very harsh rating to the critically acclaimed new TV show "King of the Hill" for portraying a "general cynical view of life." This could not be more wrong. King of the Hill shows have surprisingly uplifting, life-affirming endings. A recent episode ends with the usually stoic lead character in a tearful embrace with his wife, crying because he fully realizes that he needs to be more open to her in his life.King of the Hill's honesty and optimism outshines the artificial sentimentality of shows like "Father Knows Best."

The Simpsons TV show gets a full three scarlet lights for Character traits, but the violent 90's movie version of Romeo and Juliet gets mostly green lights because its characters are "respectful" and "caring." Oh, those caring Montagues and Capulets. I guess families whose vicious feuds drive their kids to suicide are better role models than the imperfect but deeply loving Marge and Homer Simpson. Or perhaps pretension counts for a lot here, since the NIMF coos that the brutal and sexy Romeo and Juliet movie is "an excellent introduction to Shakespeare for teens."

7) Misleading Premises

NIMF makes a barrage of claims that are at the very least misleading. They make blanket claims about "What media teaches kids," as if every work in every medium speaks with a single voice. NIMF says that what movies, TV, and computer games teach is "Gotta have it now," "Happiness equals having things," and "If it feels good, do it." (After the last election and the most recent defeat of Campaign Finance Reform, it's not the media, but Washington that is teaching "It's all about bucks, baby.")
The fact is that films, TV shows, and even computer games have many messages, do not "teach" a single monolithic, anti-social viewpoint. This is anti-art stereotyping, and stereotypes are something that the NIMF rating system was designed to condemn.

Unsupported Claims

NIMF claims that their survey shows that the NIMF "Children's Impact Statement's TM rating system is "valid, reliable, user-friendly, understandable and independent" and "effective in all categories." Having dispensed with the claim of effectiveness, let's look at those other superlatives.

1) Valid and Reliable

NIMF claims legitimacy for their views based on a scientific survey prepared by an objective third party polling firm, which found (surprise) that parents preferred the new NIMF rating system by 81%. Their Web site refers to a blizzard of "evaluation and report forms, validation studies, conclusions and recommendations, and a summary of overall findings from the survey, " but makes none of this wealth of data available on the Web site that makes the claims. The methodology is simply not revealed.

2) User-Friendly and Understandable

Its easy to get 88% of respondents to rate a system as "easy to understand" if pollsters take a lot of time and effort to personally and patiently explain its intricacies. But if this system is forced on the nation, there will be no such one-on-one attempt to clarify the complexities to each person.

3) Independent

Independent of whom? NIMF is clearly independent of the industries being rated, but is NIMF independent of secret censors with a political ax to grind?
What about the backers of NIMF? Who are they? What is their agenda? What else are they proposing? What economic and political benefits do they stand to gain if the government forces this on all media outlets? Another thing you won't find at the NIMF Web site is information on their funding sources.

Survey Says:

1) What are the full results of the survey? NIMF reports that a whopping 94% of parents found the section on sexual content "valid," and 87% found the section on violence "valid." Compared to what? What instructions did they give for these subjective questions. What constitutes validity? (And why do they offer "validity" numbers for their sex and violence section, but no numbers for their highly dubious "Character" section. Could it be that the numbers are not quite so stratospheric?)
NIMF claims "There is no mystery here either. The evaluation forms and the process used will be open for all to see." Just not on the web site with the rest of the Children's Impact Statement TM material.

2) How much time did the polling firm spend with each family explaining the intricate details of the NIMF rating system? Will parents who do not have a one-on-one session with a pollster find it as "user-friendly?" It's easy to generate high poll numbers for ease of use for a system that is patiently explained in a one-on-one session with a patient pollster.

If this system is forced on all media outlets, is it realistic to expect that anyone will spend the same amount of time and effort explaining this unwieldy system to everyone in the nation?

3) How much does NIMF stand to profit if the government forces the Children's Impact Statement TM rating system on computer games, movies, TV programs, videos, etc.? (Yes, by now we've all noticed the tell-tale trademark sign at the end of the Children's Impact Statement TM.) How often do organizations seek trademarks for things they intend to give away free? At the very least, owning the rating system used by all media would bring NIMF a tremendous degree of power, and concentrate control over speech rights into the hands of very few.

4) Does the government know who owns and funds NIMF?

The NIMF Agenda

While the full NIMF agenda is still unclear, it is evident that they want a rating system imposed on all media-a system owned and operated by NIMF.
Just picture it- legions of NIMFs paid to slap their arbitrary and capricious ratings on everything. Every movie, TV show, video tape, and computer game. And then what? Radio shows? Music? Paintings? Theatre? Books? Internet talk? Soapbox speeches in the park?

I have criticized the current computer game rating systems, but they are vastly better than this pretender to the throne. The government would make a huge mistake if it bowed to NIMF's whims and forced the computer games industry to replace the current ratings system with a system as deeply flawed as the Children's Impact Statement TM.

The government is also making a mistake in accepting NIMF as an honest broker of objective surveys on the computer game rating system when the NIMF stands to benefit from finding "serious gaps" in our system.

Like judges and special prosecutors, watchdog groups MUST be free from any conflicts of interest. There must be no potential gain to the group from a finding of guilt (or a finding of "serious gaps in the system.")

NIMF can establish credibility as a watchdog group whose surveys are uncritically accepted by Congress. Or NIMF could establish credibility as a rival rating system developer competing for the lucrative job of assigning rating systems to all media. But they cannot credibly be both.

Unprecedented Concentration of Power

We may think that we have placated the Congressional censor squad with all our efforts on ratings, but this mixed report card and the Senators' chummy relationship with the shadowy NIMF is clear evidence that Congress is only getting started.

There's political gold in attacking those "dark, dirty, and dangerous" games, and zero political risk. This is a golden opportunity for any "family" watchdog group with a half-baked ratings system and a hidden agenda to jump in and collect some killer cash. This Congress has shown that it's not above Orwellian threats like "you must adopt a ratings system VOLUNTARILY or we will impose one on you."

Any plan to allow one group to control the ratings of all computer games, television shows, movies represents a concentration of power so massive and so intrusive that it is utterly unprecedented in American history. To invest this tremendous power in the hands of a cabal as secretive as the NIMF is dangerous.

What's to stop Congress from continuing to adopt NIMF's suspicious surveys as gospel truth? What's to stop Congress from imposing a new system on us? And what are we going to do to about it?

2) Will the Supreme Court Allow Net Censorship?

As the CGDC 97 Proceedings goes to press (and CD-ROM), the Supreme Court begins an epic case: the Communications Decency Act (CDA). Their decision will have profound results on the future of the Internet.

While we wait for the final word, here's a little history of the CDA. Congress crafted the Communications Decency Act as part of the sweeping Telecommunications Reform Act of 1996. It applies old laws designed for TV and radio to the Internet, making it illegal to transmit "indecent" material over any electronic device. The indecency standard is the strictest moral regulation that has ever been imposed on any medium in the nation.

On Febuary 8, 1996, President Clinton signed into Act into law. The American Civil Liberties Union (ACLU) immediately challenged it in court, and stopped it from going into effect. Opponents of the CDA launched a massive online (and offline) protest. All over the Net, pages turned black and sported blue ribbons in protest. Supporters tried a counter protest with white ribbons and green ribbons, but did not gain much support.

On June 12, 1996, the ACLU and their allies prevailed. A special three judge panel in Philadelphia struck down the Communications Decency Act (CDA) as unconstitutional and a violation of the constitutional guarantee of free speech. A federal court in New York also found the CDA unconstitutional. From there the case goes to the Supreme Court.

The Indecent Details

The CDA would have punished anyone who made available "indecent" or "patently offensive" material on the Internet with a $250,000 fine or two years in jail. "Indecent" is defined as anything depicting "sexual or excretory activities or organs." Those found guilty of having web sites dealing with family planning, AIDS, or human sexuality found themselves facing potential fines or even prison sentences.

The CDA was challenged by a group of strange bedfellows ranging from the ACLU to Internet-related businesses to librarians to individual Web surfers. Even human rights advocates weighed in, fearing that the CDA would take away one of their most potent tools: stirring the conscience of the world by posting graphic descriptions of actual atrocities on the Net. They called themselves the Citizens Internet Empowerment Coalition (CIEC), and they made the following argument:

* The CDA is so broadly drawn as to be unconstitutionally vague.

* The CDA does not meet the test of being the least intrusive solution, since there are many ways to protect children from objectionable materials that are far less restrictive to the rest of the Internet community. (Tools like SurfWatch, and the World Wide Web Consortium's new Platform for Internet Content Selection.)

* The CDA is inherently unenforceable since it is based on old laws for broadcasting and mail and old thinking about old technologies. The very structure of the Internet prevents the person posting the material from controlling the recipients.

The court agreed, and struck down the CDA in its entirety. They did not divide or issue a partial ruling. Following the long judicial tradition that extended free speech to movies (over the very same kinds of arguments), the court completely rejected the CDA. It also exhibited a keen understanding of the technology (which clearly eluded the Congressmen who drafted the bill) and an eloquence uncommon in judicial pronouncements.

The CIEC lost no time in trumpeting the complete rejection of the CDA as "the Times versus Sullivan of cyberspace," referring to Supreme Court case that firmly established First Amendment protections for the press. The decision prevented public officials from winning libel suing except when they can prove "actual malice."

The backers of the bill lost no time in appealing the case to the Supreme Court, where it could be heard this fall. If they lose again, then it may "lead to the conclusion that Congress may not regulate indecency on the Internet at all," in the words of Judge Dalzell. Further, two of the three judges agreed that the Congress' standards of "indecency" may be too vague to carry constitutional weight. This would be a landmark ruling, and would prevent any censorship beyond the more narrow definition of "obscenity."

Lessons in Decency for Game Developers

The implications for computer game developers are obvious, but I'll point out a few. Graphically violent but (currently) legal games like Doom and Duke Nukem would be in clear violation of the CDA if played over the Internet, even when played by consenting adults. Computer Game Websites would violate the law if they posted graphics or cover art that fell within the very broad definition of "offensive," even if the same "offensive" cover art is utterly legal on retail store shelves. And selling the game online would be illegal, even if selling it in the store would be legal.
Backers of the CDA argued that they wouldn't prosecute anyone who posted indecent or offensive works of "artistic value." But they had to acknowledge that the CDA included no provision to prevent such prosecution.

The stakes in the case were high, but the victory was total. It's important for computer game designers to pay careful attention to the way this victory was achieved.

The plaintiffs who tackled the CDA knew that elected officials and judges tend to be much older and much less computer literate than the general population. They needed to bring the judges up to speed on the distinctions of the online world, and they had to do it quickly. So they brought in some high-powered computers, and gave the judges direct, hands-on experience of the Net. The judges agreed so completely with the plaintiffs that their ruling sounded almost exactly like the CIEC briefing books.

The judges concluded that, "the Internet may fairly be regarded as a never-ending worldwide conversation. The government may not, through the CDA, interrupt that conversation."

The federal judges have heard America e-mailing. But now can we get them to play a few round of multi-player Warcraft?

Son of CDA

The collapse of the CDA has not deterred its staunch allies, who see it as failing because it was too broadly drawn. Senator Orrin Hatch (R-UT.) has promised to revisit the issue with a new, and even more tightly drafted "virtual child pornography" law. The bill is aimed not at images of real children, which are already illegal, but at computer-generated images.

Courts have consistently said that First Amendment rights end when children are endangered. They have upheld the government's ability to outlaw actual child pornography to protect actual children from actual exploitation and abuse.

But the new Hatch law would extend to virtual child pornography, including "depictions" of the "buttocks of any minor, or the breast of any female minor," even if no actual children were exploited in the making of the "depictions." Presidential Candidate Robert Dole pledged to make it a campaign issue, but he didn't get much mileage out of it.

Civil libertarians fear that this bill could outlaw everything from family snapshots to cartoon characters without protecting a single actual child. Sonic the Hedgehog and his kid sidekick Tails wear no clothes except shoes. Bart Simpson is fond of mooning on network TV. Dot of the Animaniacs goes topless.

Bride of CDA

In other CDA news, New York Governor Pataki signed into law a bill similar to the CDA. New York Bill S00210 makes it a crime to use the Internet to send "indecent" material to minors, regardless of any redeeming social value in the material. This would presumably include information on birth control, reproduction, and lots of other sensitive topics.

The ACLU has promised to stop this one, too. However, with other states creating their own CDA spawn, and about a dozen already passed into law, the rights organization has its hands full. This is the dark side of devolution of power to the states. It's much harder to curb many abuses at the state level than one at the federal level.

The Political Calculation

The CDA passed Congress with bi-partisan support and President Clinton signed it into law. But it's unlikely that all the votes came from die-hard supporters. Sen. Patrick Leahy (D-Vt.), who fought against the CDA, said he knew many elected officials who voted for the CDA but were relieved to see it overturned by the courts. It's quite possible that the winning margin came from elected officials who made the political calculation that they had to vote for it or be attacked by their opponents as favoring cyber-smut over children. With a little bi-partisan cooperation this could have been avoided altogether.

We need to prevent this sorry state of affairs from happening again, and the way to do that is to understand how it happened the first time. The CDA rose from the slab as a direct result of the "Cyber Porn" article in Time magazine. This insult to objective journalism began with a cover photo of the shocked face of a horrified child bathed in frightening green light, and ended with utterly erroneous conclusions. It made the mistake of basing its premise on a the Rimm Study, a fatally flawed survey done by a student researcher who magnified the presence of Net porn beyond all proportion, and got a staggering number of facts wrong. The study was so wrong-headed that even computer novices saw through its errors. It's staggering that it ever got beyond the most basic fact-check stages at Time.

Time now admits the error, but its retraction did not have a fraction of the space and shock treatment of the initial story. The Cyber Porn article had a powerful impact that still reverberates though the country. Many people who do not use the Internet now fear that pornography is so pervasive on the Net that their children would have trouble avoiding it- an utterly false conclusion supported by the story.

If the public were not so shamelessly misled, Congress might be more willing to take a principled stand. But the public would be immune to such sensationalistic pandering if more people used and understood computers.

The computer community has got to be capable of rapid responses to such nonsense, but we must take proactive steps to educate not just our elected representatives and judges, but the general public as well. One way to do this is to make computer use as common as TV viewing-- by getting computers into the hands of all kids.

Which leads us to the next topic:

3) Will All Kids Get Computer and Internet Access?

The White House has presented several initiatives to create more technologically literate people and increase America's base of high-skill, high-wage jobs by educating teachers about computers and the Internet.

The 21st Century Teacher Initiative aims to educate teachers about computers and the Internet by teaming 100,000 technologically literate teachers with 500,000 of their unwired counterparts. It has the backing of just about every educational group from the NEA to the PTA, and should begin in earnest right now (end of August).

This comes on top of the Technology Learning Challenge, a Presidential initiative to create a public-private partnership with businesses and telephone companies to wire every public school by the year 2000.

Another Presidential executive order directed federal agencies to transfer surplus computer equipment to schools and nonprofits. It also encouraged federal agencies to direct computer literate employees to assist teachers in learning to use computers effectively in the classroom.

President Clinton's $2 billion Technology Literacy Fund proposal is unlikely to receive complete funding from Congress, if it's funded at all. As the SPA reports, the request "gives the administration the political and rhetorical upper hand on this issue."

There are outstanding long-range implications to making every kid in America familiar with computers and the Internet. The more kids get their hands on computers, the more their teachers show them the cool things to do with computers, the more they learn to navigate the Net, the better for our industry.

Kids who are excited by computers at school are more likely to agitate for having a computer at home. Sometimes they even prefer them to set-top video game boxes.

Classrooms that have computers are likely to buy educational games, and parents with computers sometimes make duplicate purchases of the same software so their kids can use it at home. Many teachers also like using software toys that are not curriculum-based and blur the line between educational software and game; products like Sim City and Flight Simulators.

All this adds up to more sales, and hastens the day when computer entertainment penetrates the mythical mass market, where product sales are measured in millions instead of tens or hundreds of thousands.

The House and Senate are still trying to pass their 1997 appropriations bills. The House is funding technology for the schools at last year's levels, lacking even an increase for inflation. The Senate is expected to follow suit. The SPA has been trying to get Congress to do it's work on time. They report:

"The real question is whether Congress will be able to pass a final bill by Sept. 30, the end of the fiscal year. If not, federal education technology funding could be wrapped into a "stop-gap" spending measure called a continuing resolution. When this occurred last year, education software sales tumbled as schools curtailed purchases until they knew

precisely how much they were to receive from Washington, a full six months after the legal deadline."

Some states, most notably California under Governor Pete Wilson, have dramatically increased educational technology spending.

4) Can We Stop Piracy?

The more games we sell, the more our games go from being targets of small time pirates, and the more they become exploited by big-league counterfeiters.

The Software Publishers Association (SPA) has taken the lead in tackling these issues, including audits of a college's computer programs and a suit against a person alleged to have posted pirated software to the Internet. Working with Internet Service Providers (ISPs) allows the SPA to track down the person responsible for the upload. The Internet's cherished anonymity may not be as absolute as it was once believed.

Cooperation between the U.S. government, the SPA, and customs officials overseas have netted larger fish, including raids in Singapore and the arrest of alleged Hong Kong pirates accused of making compilation CDs containing $20,000 worth of CDs. Market surveys have turned up many more pirate outlets, so there will very likely be lots more to the anti-piracy news.

The best news was that the Clinton administration managed to use $2 billion in trade sanctions to strong-arm the Chinese government into closing 15 pirate factories and taking away the business licenses for 12 factories. The SPA promises to continue the fight to get the Chinese to enter the CD-ROM verification program.

5) Are Computer Games Eligible for R&D Credits?

A Research and Development tax credit expired in 1995 and wasn't extended, possibly due to the budgetary chaos. When the House passed the Small Business Job Protection Act, the R&D credit was conspicuously missing. Corporations and trade groups, including the SPA, are lobbying to get the credit extended, arguing that it's vital to competitiveness. They have gotten the Senate Finance Committee to put in an amendment reinstating the credit, but the Senate would not make the credit permanent. Instead, the Senate increased the credit for slightly less than one year, and didn't make the credit retroactive for the time they missed, creating a one-year gap in the credit. The SPA is fighting to make the credit permanent, and the fight goes on.

Hey, how do game developers get some of them there R&D credits? Now that the Marines are using Doom as an official squad-level training tool, we can claim our R&D is as important as anyone's.

6) Are Shrink-wrap Licenses Legal?

In other court action, a three-judge appeals court panel reversed a lower federal court and upheld the enforceability of standard form, "shrink-wrap" license contracts.

The SPA, whose arguments were largely adopted by the court, saw this as "an important victory for software companies to protect trade secrets and offer flexible terms to customers."

The case revolved around a company called ProCD, which created a CD-ROM database of nearly one hundred million business and residential address and telephone listings.

The shrink-wrap license said that the CD-ROM could only be used for personal, and not commercial purposes. Computer science grad student Matthew Zeidenberg used the ProCD database with his own search engine on his popular World Wide Web site

The first federal court ruled for Zeidenberg, saying that shrink-wrap licenses are not legitimate contracts because users can't read them before they buy. Further, the court ruled that the 1976 Copyright Act pre-empted its enforceability. But the Court of Appeals ruled that end user license agreements can supersede the 1976 Copyright Act.

The court wrote, "a copyright is a right against the world. Contracts, by contrast, generally affect only their parties; strangers may do as they please, so contracts do not create 'exclusive rights'" such as those created by copyright."

The case will probably be appealed to the Supreme Court.

Conclusions: What Can We Do?

Again and again we see the same problem: too often the government relies on fatally flawed information like the Rimm Net porn study that fooled Time magazine, or NIMF's conflict of interest study on the computer game industry ratings. The conventional media sometimes sets the record right, but they just aren't savvy enough to do so all the time. They don't see us as a big enough industry to warrant a serious analysis of the information the government swallows as "facts." (The media doesn't always do thorough analysis of information on much larger industries, like the Internet.)

Other industries set the record straight with PR flacks and trained industry pit bulls who tenaciously communicate their point of view to the politicians, press and public. We don't have anything remotely like that. Computer game developers need a computer industry PR representative and lobbyist.

The bigger and more profitable our industry becomes, the more we'll attract government attention. We can no longer rely on our obscurity to avoid potentially hazardous regulation. In the past, computer game developers were caught off guard by the government's scrutiny of our games and of our vital new technologies. In the future, we can continue to sit out the fight and hope for the best, or take action and demand a place at the table.