The Senate Judiciary Committee, responding to the hail of brickbats that greeted Senator Hatch's "Induce Act," asked the Copyright Office to propose something that would be more popular with the technology community. Here's the heart of what it came up with:
Whoever manufactures, offers to the public, provides, or otherwise traffics in any product or service, such as a computer program, technology, device or component, that is a cause of individuals engaging in infringing public dissemination of copyrighted works shall be liable as an infringer where such activity:
(A) relies on infringing public dissemination for its commercial viability;
(B) derives a predominant portion of its revenues from infringing public dissemination; or
(C) principally relies on infringing public dissemination to attract individuals to the product or service.
You can read the entire proposal here [PDF].
In other words, for all wireless and networked (i.e., "dissemination") technologies and services, the tried-and-true Betamax defense would be replaced with the new "3-part test" in the paragraph above.
This reminds me of the bill introduced in 1906 at the behest of music publishers, which would have given them the exclusive right to make machines capable of reproducing sound. In essence, the Copyright Office is proposing that copyright owners get a new exclusive right over a certain subset of machines that are capable of "disseminating" copyrighted works.
If this isn't about using copyright law to squash disruptive technological innovation, I don't know what is. Transport yourself back to 1976, substitute the word "reproduction" in place of "public dissemination," and you would see the VCR and the cassette recorder banned. Today, because any effort to ban those kinds of private copying technologies would result in public outcry, the Copyright Office takes aim at the technologies of the future: wireless and networking.
Some try to justify this arbitrary line between past and future by saying "but mass distribution is different." Of course, that's what the entertainment oligopolists said about "mass reproduction" and "mass broadcasting" back in the day. Only because they were not able to stop those technologies did they discover the new business opportunities that they enabled.
So let me tell it like it is: The Copyright Office has, today, come out with a proposal that is profoundly and fundamentally anti-innovation. Were it to become law, it would be very bad for creator and consumer alike.