The NewsHour with Jim Lehrer

JIM LEHRER:

Good evening. I'm Jim Lehrer. On the NewsHour tonight: Today's news; the latest on the North Korea nuclear story; a look at the postwar future for Iraq's valuable oil production; a media report on the theft of music and movies off the Internet; and analysis of the Cuban government's new crackdown on dissidents.

NEWS SUMMARY

JIM LEHRER: North Korea acknowledged today that it does indeed have nuclear weapons. The Associated Press reported a North Korean official gave that confirmation during a second day of talks with the United States in Beijing, China. It said the North Korean told a U.S. envoy that his country might test, export or even use the weapons. Earlier in the day in Washington Secretary of State Powell had said the United States would not be threatened.

COLIN POWELL: They should not leave this se of discussions that have been held in Beijing with the slightest impression that the United States and its partners, and the nations in the region, will be intimidated by bellicose statements or by threats or actions they think might get them more attention or might force us to make a concession that we would not otherwise make.

JIM LEHRER: Powell said the talks had come to an end, apparently, one day early. But later, a State Department spokesman said it was still possible there would be more meetings tomorrow. We'll have more on this in a moment. It was widely reported late today that Iraq's former deputy prime minister, Tariq Aziz, is now in U.S. custody. He served as foreign minister and Saddam Hussein's main spokesman during the first gulf war. There were no details on just how or where he was taken into custody. At least four other key officials were apprehended yesterday, including the former heads of military intelligence, air defenses and the trade ministry. In all, 15 ex-officials have now been captured or killed. Some Iraqi government ministries could resume operating by the end of next week. The country's U.S. administrator made that forecast today at a Baghdad news conference. Retired Army General Jay Garner said he wants to name Iraqis to staff the ministries as soon as possible.

LT. GEN. JAY GARNER: As we get into the ministries and other governmental functions and we start the reconstruction effort in those, when the Iraqis themselves are ready to accept the management of that and the leadership of that, we'll turn it over to them. And there's no calendar on that. Some will go fast. Some will take a little longer. But we'll continue to work in there and do the reconstruction until we leave.

JIM LEHRER: Garner did not discuss the Iraqi political process. But a spokesman said a second meeting of Iraqi political groups would be held in the coming days, possibly Monday. Iran today denied U.S. allegations it was interfering in postwar Iraq. The Iranian foreign minister said his country is not plotting for Shiite Muslims to take control. He said, "We welcome true democracy." And in Washington, U.S. Defense Secretary Rumsfeld said Islamic clerics will not end up running Iraq. He told the Associated Press, "That isn't going to happen." The oil fields of northern Iraq are ready to resume production. A U.S. general with a reconstruction team said today pumping could begin within a day or two. Oil began flowing in Iraq's southern oil fields yesterday. On the world market, crude oil prices have fallen sharply in recent weeks. So today, the OPEC cartel agreed to cut output by two million barrels a day, or 7 percent. We'll have more on Iraq's oil later in the program tonight. A Palestinian suicide bomber killed himself and a security guard in Israel today. At least 10 people were wounded. The bomb was detonated just outside a train station north of Tel Aviv. A militia linked to Palestinian leader Arafat blamed a breakaway faction for the attack. It came as a new Palestinian prime minister is set to take office, opening the way to new peace efforts. China sealed off a major hospital in Beijing today amid growing panic over the spread of the SARS virus in city. We have a report from Julian Manyon of Independent Television News.

JULIAN MANYON: Increasingly, Beijing is in the grip of fear. Many are now trying to leave the capital, heading for flights to other parts of China, believed to be less affected by the SARS virus. In the airport terminals, workers spray disinfectant. But with knowledge about the virus still limited, most ordinary people are convinced that the best way to protect themselves from this mysterious killer is to try to isolate themselves from it. In an attempt to slow the spread of the disease, the Chinese government has cut back the national holidays which normally begin on May 1. But thousands of people are still flocking to Beijing's main railway stations. Many of them are from the city's community of four million migrant workers. They're leaving to protect themselves from SARS. But the effect of their actions may well be to spread the disease to new parts of China. In the capital, the authorities have now taken the extraordinary step of sealing off an entire hospital after SARS spread inside it. Last night police surrounded the People's Hospital of Beijing University, leaving many of the 2,300 staff quarantined within the walls. The patients have all been transferred to other hospitals thought better able to handle the SARS outbreak. (Speaking Chinese) State television has denied that parts of the capital will be sealed off. But roadblocks have suddenly appeared on main roads outside Beijing. And after its late start in tackling the virus and its attempts to play down the crisis, the Chinese government now finally seems ready to take the toughest measures.

JIM LEHRER: So far, the death toll from SARS worldwide has topped 260. Nearly 4,500 cases have been reported. Most have been in Asia, but there's also an outbreak in Toronto, Canada. The World Health Organization has warned people not to travel to Toronto and Beijing. An eighth-grade boy shot and killed his principal and then himself in Pennsylvania today. It happened at a junior-high school in Red Lion, about 30 miles southeast of Harrisburg. Police said the boy opened fire with a handgun in the school cafeteria, just before the start of classes. The motive was unknown. President Bush pressed Congress today to pass at least $550 billion in tax cuts. He criticized supporters of smaller cuts during a trip to Ohio. One of the state's senators, Republican George Voinovich, has said he won't back any tax cut over $350 billion without reductions in spending. But at a ball-bearing factory in canton, Mr. Bush said that's not good enough.

PRES. GEORGE W. BUSH: Some in Congress say the plan is too big. Well t seems like to me they might have some explaining to do. If they agree that tax relief creates jobs, then why are they for a little bitty tax relief package? If they believe tax relief is important for job creation, they ought to join us and join this administration and join many in Congress and have a robust package that creates enough work for the American people.

JIM LEHRER: The president appeared later in Lima, Ohio. Senator Voinovich did not attend either event. But he did greet Mr. Bush when Air Force One landed in Dayton, between the two presidential appearances. On Wall Street today, the Dow Jones Industrial Average lost more than 75 points to close at 8440. The NASDAQ fell nearly 9 points to close at 1457. That's it for the News Summary tonight. Now it's on to: North Korea's nukes; the oil in Iraq; stealing entertainment from the Internet; and bad times for dissidents in Cuba.

UPDATE - NUCLEAR CHALLENGE

JIM LEHRER: The North Korea story. We go now to David Sanger, who is covering it for the New York Times. David, welcome.

DAVID SANGER: Thank you, very much, Jim.

JIM LEHRER: It appears the North Koreans laid much on the table at that meeting in Beijing today. Tell us what they said.

DAVID SANGER: Well, we knew that this was likely to be one of those meetings where both sides had to go read from their talking points. It's just that the North Korean talking points were pretty tough. They said a few things: First, they said that they are already reprocessing their spent nuclear fuel rods, which have been in storage since 1994, into weapons-grade plutonium. Now, this is something that was the subject of great debate last week when it appeared first that they had made a similar statement in a written statement and then it was determined later it was mistranslated. I'm told that, at this session, the chief negotiator, who speaks English quite well and could listen to the translation, said the reprocessing has begun, American intelligence officials tell me that they have yet to see any evidence that it has started. The second thing they said was that they already have some nuclear weapons, which is something the CIA has believed for some time -- up to two weapons the CIA believes they may have produced in the first Bush administration.

JIM LEHRER: What kind of weapons, David?

DAVID SANGER: We assume these to be plutonium-based small nuclear weapons, but they've never tested them. So we don't know if they work, and we don't know whether they've been able to make them small enough that they could put them on a missile and deliver them. So how big a threat that poses is a question. But it certainly puts the pressure on the bush administration to decide whether or not they are going to continue these talks, which broke off fairly abruptly today, or whether they'll begin to try to put the squeeze on North Korea.

JIM LEHRER: Now, there was also a report that, in addition to those two things, they also said, "We're prepared to use these nuclear weapons and even prepared to sell them." Can you confirm that? Were you able to confirm that?

DAVID SANGER: They were vague in this phraseology. They said, "We are prepared to act with these nuclear weapons, depending on how you act. And so it left open the possibility that they would in fact sell them or perhaps test them. I don't think anybody thought that they would attempt to use them out of this discussion. But it certainly plays to the main fear that Richard Armitage, the deputy secretary of state, discussed in Congress a few months ago when he said the big fear with North Korea is they've never had a weapons system they didn't sell. And they could certainly try to turn around and sell this one.

JIM LEHRER: Secretary of State Powell, we just ran it in our News Summary, said, "we will not be intimidated by this." Was this interpreted as an act of intimidation by those sitting there with the North Koreans in Beijing?

DAVID SANGER: I think that they were prepared for these talks to be an entire exercise in intimidation, and Secretary Powell has said several times, and he said to me and he said again today in his speech, that the North Koreans believe that, in 1994, they were able to use their intimidation to strike a deal. Now, what the Bush administration says, "You need to do something different, you can't just freeze your nuclear projects; you have to completely dismantle them." And the big question, the big debate within this administration that nobody has really yet resolved is: Do they believe that North Korea is willing to trade away these weapons, or do you believe that North Korea thinks that, without its weapons, or at least a weapons project it has no leverage over the United States?

JIM LEHRER: Yeah, and that remains to be seen. I mean we're going to test this. Speaking of testing, that must now be tested by the United States, correct?

DAVID SANGER: Well, that's what these talks were about. And I think the big issue is: Do you go to the next stage here? Now, the Japanese and the South Koreans have already said they believe you need to play this out, let are the North Koreans vent at their first meeting, go to a second one, determine whether they're willing to bargain this program away. There are others in the administration, including Secretary Rumsfeld, we believe, and certainly those who work for him, who have distributed a memo we reported on earlier in the week that basically said, "They'll never give up their nuclear weapons, so we ought to go for regime change there, we ought to press them to bring the government to the brink of collapse."

JIM LEHRER: Now, today specifically, what's your reading of how this whole episode today is being read by administration leaders here? I mean is this seen as an escalation of the crisis, or was it expected to go? I mean how should we read this?

DAVID SANGER: I think the way to read it is an expected escalation, and I don't think they're going to react to it very quickly. The new South Korean president, President Noh is coming here in mid May. I suspect he'll see the Japanese... you'll see the Japanese prime minister here, as well. And I don't think they want to make a single move without trying to coordinate it with them or at least appearing to. And as we've discussed before, a military action against North Korea would be far more complex than against Iraq, and I don't think that's a route that anybody wants to take any time soon.

JIM LEHRER: Okay, David, thank you very much for the update.

DAVID SANGER: Thank you.

FOCUS - IN THE PIPELINE

JIM LEHRER: Now, what now for Iraq's major asset, oil? And to Margaret Warner.

MARGARET WARNER: Four wells in southern Iraq's Rumaila oil field began gushing again yesterday for the first time since the Iraq war began March 20. Nearby, American and British forces, aided by Iraqi oil workers, fired up a gas-oil separation plant, and the oil-- some 175,000 barrels a day's worth-- today began flowing to a refinery and power plant near Basra. Separately, U.S. military officials said production of some 60,000 barrels a day would resume in northern Iraq by the weekend. U.S. General Robert Crear said that, initially, the oil would be used for the Iraqis' own needs.

GEN. ROBERT CREAR: None of this would be exported. Right now the concern is domestic, and that's the production that we have brought online. The system itself is not fully up yet, but we've figured out a way to do it in such a way to alleviate some of the suffering, or prevent some of the suffering that could happen without an adequate supply of oil for domestic consumption.

MARGARET WARNER: The big question is when and under what circumstances Iraq will begin exporting oil again. With proven oil reserves of 112 billion barrels, Iraq is second only to Saudi Arabia in this valuable resource. Before the Iraq War, the country produced two and a half million barrels of oil a day 60 percent of it from the southern oil fields, 40 percent from the north, near Kirkuk. But none of it could be legally exported for profit, because of sanctions imposed by the U.N. before the "91 Gulf War. In 1995, the U.N. set up an oil- for-food program to ease the embargo's impact. Iraq could sell oil abroad and purchase civilian items. But the sales, proceeds and purchases were controlled by U.N. Secretary General Kofi Annan. Today, the Security Council voted to extend Annan's authority until June 3. Before the war, Bush administration officials repeatedly had to answer charges that they had designs on Iraq's oil.

DONALD RUMSFELD: The short answer is that the oil belongs to the Iraqi people. The full intention is that in the event there is a post-Saddam Hussein regime that the oil would be operated and sold for the benefit of the Iraqi people.

MARGARET WARNER: White House officials say they're working on a plan now to reorganize Iraq's industry to operate independently of the U.N. Meanwhile, world oil prices have plunged about 30 percent in the past month, in part because OPEC members had stepped up production before the war.

MARGARET WARNER: And for more on the present state and the future of Iraq's oil, we turn to Robinson West, chairman of PFC Energy, a strategic advisory firm to oil companies and governments. He's a former assistant secretary of the interior. Christopher Flavin, president of the Worldwatch Institute, an environmental organization. Amy Jaffe, president of AMJ Energy Consulting, and project coordinator for energy research at the James A. Baker Institute for Public Policy at Rice University. And Falah Aljibury, an international petroleum consultant and analyst who advises the Iraqi oil industry.

Welcome to you all.

Amy Jaffe, first of all, just give us a good snapshot or assessment. What's the physical state of the Iraqi oil fields right now and their ability to produce?

AMY JAFFEE: Well, we didn't lose a lot of capacity from the war, and that's the good news. There is the problem of the long-term disrepair of facilities, and that will have to be addressed. But we're in a good state of affairs. The problems really are more political than technical.

MARGARET WARNER: And Mr. Aljibury, I know you're talking to people on the ground there. What would you add to that in terms of the physical condition and the ability of these fields to start producing?

FALAH ALJIBURY: The physical conditions are those that were looted and they are being restored very rapidly. The U.S. Government is working very seriously and diligently to restore these fields to where they were before. The looted material have begun to being brought back by the workers since the workers recognize that this is for their own families' benefit, for their country's benefit, both for consumption and export. The only thing I could add more than what I have suggested before, and that is the security. That is the main issue, that the Iraqi technicians and Iraqi administrators are saying now that, regardless of the physical conditions in the fields are, there is security... their security is a major concern for people to move around and to bring this production in line.

MARGARET WARNER: Robin West, what do you think is the most important thing that should be done to get these fields back up and producing?

J. ROBINSON WEST: I think the most important thing, Margaret, is to get the Iraqis in charge of their operations, which they know very well. The Iraqis are well recognized in the international industry as being very competent, and so I think as quickly as possible, to get competent Iraq Iraqis in place running things, and then later on, to be able to bring the industry in, but to bring it in under terms which are international terms and which the Iraqis believe are fair.

MARGARET WARNER: But isn't this going to cost a lot of money, Chris Flavin, to-- given the damage that had been done, not so much by the war, but as someone said earlier, but really by the years of economic sanctions?

CHRISTOPHER FLAVIN: There's damage to the fields that go all the way back to the Iran-Iraq war. There's never been re-repaired and there's just been a failure to invest over a long period of time. So there's a lot of additional investment to get up beyond the level of production that occurred before the war. The big question, though is: What is the new system going to be? There is no legal government in Iraq today. Technically, legally, the United Nations controls the oil supply, and the question of how we can get from where we are today to a system where you have a legitimate means of selling oil on the market remains to be answered.

MARGARET WARNER: So Amy Jaffe, how do we get from the current system-- well, first of all, explain the current system right now. Who owns Iraq's oil right now? I mean is it the U.S. because it's an occupying force? Is it the U.N., which is running this program? There's no Iraqi government. Who's in charge?

AMY JAFFEE: Well, I think the thing we all have to keep sight on and I think Sec. Rumsfeld and others have said this, is there has never been a question that the oil in the ground is owned by the Iraqi people and the country of Iraq, so that's the first principle. The second thing we have to keep in mind, because we tend to think of the United Nationsas being an altruistic organization with the good of the public involved, but they are a concerned party because they have a tremendous amount of administrative positions and budget funding that comes from controlling these oil sales and the humanitarian for oil program. So really, you know, the question almost becomes one of: Who's going to collect a salary for producing and selling Iraq's oil? Is that going to be bureaucrats and technocrats in Iraq, or is it going to be bureaucrats and technocrats in the United Nations? I mean we set up the oil-for-food program to protect the oil revenue from going into buy weapons of mass destruction and military that could be used to threaten Iraq's neighbors, and that's why those sanctions were put in place. So really the first step is to really analyze: Why is the U.N. reluctant to lift sanctions? What sanctions are still necessary? What procedures are really still necessary to prevent or to protect this asset for the Iraqi nation? MARGARET WARNER: Chris Flavin, you're shaking your head.

CHRISTOPHER FLAVIN: Well, there's another countervailing problem, which is that all of the man-on-the-street interviews in Iraq show clearly that there's great suspicion on the part of the vast majority of the Iraqi people, despite statements by U.S. officials that U.S. desires to control that oil. So I think that there are problems any way you go. But I think probably the most legitimate way to move forward, until we have an actual Iraqi government that can control things, is to have some kind of a new international system, some kind of a council set up to actually control for the benefit of the Iraqi people, those oil supplies. Having U.S. Generals, U.S. Administrators do it is not going to work. I agree with Amy that there are certainly are possible concerns with the U.N., as well. We need a new system in place, and I think what the Bush administration has not yet come to grips with is that they're going to have to go back to the Security Council, negotiate this particularly with the Russians and the French and come up with something that is in fact in the long run interest of the Iraqi people.

MARGARET WARNER: Robin West, if...

FALAH ALJIBURY: May I add something?

MARGARET WARNER: All right, go ahead, Mr. Aljibury.

FALAH ALJIBURY: I would like very much, to what has been said by Amy, and her colleague-- add to. This is not the state right now. This may have been a speculation prior to the liberation of Iraq, that the oil of Iraq is going to be taken by other powers. Certainly the present people administering Iraq and administering the ministry by themselves, by the highest ranking individuals are not seeing it this way. They are proceeding very rapidly in cooperation with the Army Corps of Engineers to bringing those fields into production as rapidly as possible. So there may have been a speculation in the past. The Iraqi officials haven't seen any such attempt at the present time as was described above. Let me please inform you about how the Iraqis and how the U.N. and how the legal system sees who possesses Iraqi oil at the present time. There is no doubt that Iraq possesses its oil. The legal entity designed by the Iraqi government, past Iraqi government was SOMO, State Oil Marketing Organization. Therefore, State Oil Marketing Organization is intact, presently responsible and recognized both by the end user, the buyer, and the United Nations as the entity responsible for sales.

MARGARET WARNER: Let me get Mr. West in here just to pick up on that. The White House is saying, or the Bush administration, that it's going to design a new program. If you were giving them advice on what to do, what would your advice be?

J. ROBINSON WEST: The first element would be to make sure that the Iraqi people have confidence in the system, that they know it's a fair, trustworthy system, that the money isn't going plundered by Washington. I don't think Washington has any pin tension of doing that. The second thing, which is terribly important in any aspect of oil, is that the system be transparent. They know where the moneys come from, where the money is going to go. One of the brutal facts of life is, wherever you go in the oil business in the world, with one exception, which is Norway-- whenever oil dominates the economy, it is a recipe for a corrupt, mismanaged state. And if they don't get this right first with oil sales and later with investment, if they don't get it right, I don't care how good everything else is, that they will fail because oil always corrupts governments.

MARGARET WARNER: And why?

J. ROBINSON WEST: The basic reason is that, if a government controls oil, large oil resources, they basically don't need the consent of the governed. They have the money. They don't need... America was founded on taxation and representation. They don't need taxation. They don't need the consent of people, and they do whatever they want. And government becomes not only a political prize, but it becomes a great commercial and financial prize. And this is what's happened in West Africa, in the Caspian and the Middle East and Russia, everywhere.

MARGARET WARNER: Amy Jaffe, as we've been discussing, and as we heard Donald Rumsfeld, we've heard the president say the U.S. insists that they're going to make this for the benefit of the Iraqi people. Nonetheless, don't U.S. oil companies stand to benefit to some degree? I mean before they had no access to getting involved in this industry.

AMY JAFFEE: Well, actually, the truth is that Iraq, before it invaded Kuwait, was negotiating with some U.S. companies and other international companies to bring them in as investors. And you know, we don't know what the end of the story is going to be. From the kinds of reports and things that I've read, there's talk about having a constitutional convention in Iraq to set up a new framework for government and law. That's going to involve having a petroleum law. I mean we don't realize-- we have one here in this country, too, that some of it is state by state, and some of it is federal. You have to have laws that govern how resources are produced and who owns them and how they're leased and produced. And that process is going to have to take place in Iraq, and you know, there are several steps that have to take place before we can even get to the stage where an American or Russian or Chinese oil company can consider whether or not they can participate.

MARGARET WARNER: Chris Flavin, but going back to your idea of what we do in the interim between now and when there's a really elected Iraqi government, which could be a year or more, are you saying that basically you don't think international oil companies will be willing to go into business in Iraq and help them sell the oil unless there's some kind of legal entity...

CHRISTOPHER FLAVIN: There needs to be legal title to the oil, and that does not exist currently -- the U.N., if anyone, possesses that title because the previous Iraqi government was not allowed to sell it. So that that needs to be... there needs to be legitimacy confirmed on someone to sell it, but I think the key point is the one we've just been focusing on, which is that we're going to have to go very delicately. And I think the administration should go absolutely out of its way to show that we're not allowing U.S. oil companies to control this process because, if that happens, then there's going to be an overreaction in the other direction and we will follow that sad history of other oil economies that are corrupt and that did not serve the interests of their people. I think that we could go the Norwegian route of having a mixed oil system. There's a state oil company in Norway, but there also are multinational companies involved and it's all managed in a very legitimate way. But we're going to have to be very careful to allow the Iraqis to get there. Otherwise, they're going to react against it and will go back to a very corrupt system.

MARGARET WARNER: All right, thank you all four, very much.

JIM LEHRER: Still to come on the NewsHour tonight: Entertainment theft and rough times in Cuba.

FOCUS - INTERNET PIRACY

JIM LEHRER: The illegal downloading of music and films off the Internet is changing the rules of the game in the entertainment industry. Media correspondent Terence Smith has our report.

TERENCE SMITH: If you watch music television, you've no doubt seen them.

SPOKESPERSON: Online, Internet, however you do it.

TERENCE SMITH: Recording artists on MTV, country music television...

SPOKESPERSON: Don't download music illegally.

TERENCE SMITH: ...And Hispanic stations pleading with their listeners not to illegally download music from the Internet.

SPOKESPERSON: We appreciate the love, but don't steal the music.

TERENCE SMITH: Music industry executives say Internet theft of copyrighted works has devastated their industry, which has seen several years of troubling market declines. Fearing their businesses will be next, film and television executives are also seeking further copyright protection. Motion picture executives say they are in a war against digital pirates, who are illegally copying hundreds of thousands of movies every day. And they say from their point of view, the problem will only get worse as more sophisticated computer software and high-speed Internet access make it easier to download perfect copies of original works.

PETER CHERNIN, News Corporation: I think this is a fundamentally decent country with decent people. And none of us would allow our kids to break into the local blockbuster and steal movies, and yet millions of us are watching our kids do that just every day on their computer.

TERENCE SMITH: Peter Chernin is COO of the media giant, News Corporation, which includes 20th Century Fox Studios and Fox Television.

SPOKESMAN: Action! ( Screaming )

TERENCE SMITH: He says his industry and the $15 billion dollar D.V.D. Market are at stake.

PETER CHERNIN: 50 percent of the money that comes into the motion picture industry comes from DVD and video. If all these products are pirated and stolen on the Internet, trust me, if 50 percent of the income for this business goes away, the business is over as we know it.

TERENCE SMITH: But even as the entertainment giants move to protect their investments, technology advocates and privacy experts wonder, at what cost to the public? Stanford University law professor Lawrence Lessig.

LAWRENCE LESSIG, Stanford University Law School: In combating Internet piracy, we are destroying the opportunity of the Internet to serve as a tool for extraordinary creativity and innovation.

TERENCE SMITH: Motion picture industry fears stem from the experience of the music business, where executives claim piracy is largely responsible for last year's 10 percent decline in global sales.

DAVID MUNNS, EMI Recorded Music: I have never seen the industry under siege like this in the 30 years I have been in this business.

TERENCE SMITH: David Munns is chairman and CEO of EMI Recorded Music in North America, which includes Capitol and Virgin Records, among others.

DAVID MUNNS: This is the place where Sinatra and the Beach Boys and the Beatles recorded.

TERENCE SMITH: Polls show many Americans don't view copyright theft as theft. But while the public focuses on the huge amount of money earned by a few artists, Munns says the music industry devotes much time and capital to developing tomorrow's talent. Only a few make it big.

NORAH JONES: I waited till I saw the sun...

TERENCE SMITH: Like EMI's Norah Jones, whose debut, he says, came out of nowhere and won eight Grammies this year.

DAVID MUNNS: We don't make obscene amounts of money. We have a legitimate business that has been going for many, many years, and we have a high level of investment in new artists, new music, a lot of which never makes any money by the way.

TERENCE SMITH: Entertainment companies are pursuing not only the services that enable Internet users to share copyrighted material, but also the users themselves.

DAVID MUNNS: We can see the activity on the Net, we can see what people are doing. We can see the people with hundreds and thousands of files, and one of the things that we are trying to do is identify those people, so that we can give them a fair warning that we can see what they are doing, and tell them they have to stop.

TERENCE SMITH: This month, the record industry did just that, filing suit against individual students it accuses of large scale copyright infringement. Meanwhile, the swapping of entertainment files is swamping university network servers. Recently, the U.S. Naval Academy confiscated computers and disciplined 85 students for using the school's network to trade copyrighted music and film. At Stanford University, authorities began limiting access to entertainment sites two years ago. Nonetheless, complaints about copyright violations continue to rise.

VANCE IKEZOYE, Audible Magic Corporation: What I'm going to show you is a report of one of our installations at the University of Wyoming. This report shows, by date, what files and what songs are actually being traded. There are thousands of files and this is just one day.

TERENCE SMITH: Vance Ikezoye is CEO of the Audible Magic Corporation, which tracks copyright violators for businesses and universities. In a technique called audio fingerprinting, his company takes analytic measurements of sound and stores them in its database of 3.5 million songs. The company can then identify music, its copyright holder, and report back to its clients on illegally downloaded material.

VANCE IKEZOYE: It's crowding out legitimate use of the network, business use of the network. There's a productivity issue for their employees spending their time downloading songs and movies instead of doing their work and for a corporation to be singled out as a copyright infringer is a public relations disaster.

TERENCE SMITH: Stanford University's Lessig, an expert on Internet law, says even more invasive technologies raise serious privacy concerns.

LAWRENCE LESSIG: These technologies are monitoring and surveying what people are doing in a way that ordinary people would be extraordinarily surprised about. So people's reasonable expectation of privacy is being violated by these technologies.

TERENCE SMITH: Industry leaders say they have no choice.

TERENCE SMITH: If companies are going to be trolling the Internet to see who's doing this, is there something of a Big Brother in that we as a society ought to be concerned about?

SPOKESMAN: I think society, first of all, should be concerned about theft on a grand scale. Of course there are privacy concerns, and there is healthy debate going on about that, but at the end of the day, we do have a right to defend ourselves against illegal activity like this.

MUSIC: Overrated...

TERENCE SMITH: But singer-songwriter Jenny Toomey of the future of music coalition, says entertainment conglomerates don't always represent the artists' best interests.

JENNY TOOMEY, Future of Music Coalition: One of the worst things about copyright is the fact that it has moved away from protecting the creator, which is the language you see in the original copyright, and protecting the corporation. We have moved towards corporate copyright.

TERENCE SMITH: And as some in the industry press to have copyright protection embedded in consumer electronics, Lawrence Lessig says these efforts will seriously impact the future of the Internet as a source of creative material.

LAWRENCE LESSIG: The response that the music industry has insisted on would be technologies that would essentially break the Internet. There are technologies that make the Internet much more cumbersome, make it much harder to deliver content, make it much harder to develop new devices, new wireless technologies to connect to the Internet. And it seems to me, that's the wrong response.

TERENCE SMITH: Those in the music industry acknowledge that their solution and their future may be in the belly of the beast: Online. The music industry, for example is licensing websites where music can be downloaded legally for a fee and offering enhanced CD's, with Internet options available to those who have purchased the CD but Lessig says the powerful entertainment industry has fought against compromises that, he says, would have truly opened up the distribution of creative works.

LAWRENCE LESSIG: In the context of copyright, every single change the government has made in the last five years, from the courts to Congress, has been about reinforcing the monopoly power of existing content distributors, not about enabling a diversity of competition where artists get paid, and customers get what they want.

SPOKESMAN: Ready.

TERENCE SMITH: Meanwhile, as the battle continues among the entertainment industry executives, software developers and Internet users, literally millions of people continue doing what they have been doing all along: Downloading, sharing, and copying music and film every day.

JIM LEHRER: A federal judge today upheld one recording industry demand. The judge ordered Verizon Communications to reveal the names of subscribers suspected of illegally offering music for downloading. Verizon has two weeks to appeal.

FOCUS - CRACKDOWN IN CUBA

JIM LEHRER: Finally tonight, the new Cuban moves against dissidents; Ray Suarez has that story.

RAY SUAREZ: For more than ten years, this woman pretended to be an opponent of Cuban President Fidel Castro's government.

ALEIDA DE LAS MERCEDES GODINEZ, Cuban Undercover Agent (Translated): And thank the loyal gesture the U.S. Government has had, who against the grain has lent us their home so we can hold this activity here.

RAY SUAREZ: Aleida de las Mercedes Godinez attended this meeting of Cuban dissidents held last month at the home of a U.S. diplomat. But she's actually an undercover spy for Castro's government. Godinez and other agents helped Castro's government round up 75 dissidents. They were convicted of being U.S.-backed mercenaries and sentenced last month to as many as 28 years in prison. In an interview this week, Godinez said the U.S. should not have sponsored the meetings with dissidents.

ALEIDA DE LAS MERCEDES GODINEZ ( Translated ): It is scandalous that a diplomat would lend his home for these types of subversive activities against the government that accredits him.

RAY SUAREZ: Among those jailed for subversive activities were independent journalists, economists and government critics from a group called the Varela Project. Some met with former President Jimmy Carter during his visit to Cuba last year. Cuba further shocked human rights organizations last week by executing three men by firing squad for hijacking a ferry to Florida. The passenger boat was commandeered in Havana Bay two weeks ago. It was the third hijacking this month by Cubans trying get to the United States. Cuba's foreign minister defended the executions, saying they would prevent further hijackings.

FELIPE PEREZ ROQUE, Foreign Minister, Cuba (Translated): (April 18) The death penalty is not in accord with our philosophy of life. It is but an ultimate resource that we only use in extreme need, a resource that we have used to defend a country that has been treated with hostility for over 40 years and still is.

RAY SUAREZ: It's all added up to one of the toughest political crackdowns by Castro's government in years. In Washington last week, Secretary of State Colin Powell said Cuba has long had a horrible human rights record.

COIN POWELL: Rather than improving as we go into the 21st century, it's getting worse. I mean, when you look at what they have done in recent weeks and recent months with respect to stifling dissent, with respect to arresting people and sentencing them to long years in prison, in jail, just for expressing a point of view that is different from that of Fidel Castro, it should be an outrage to everyone. It should be an outrage to every leader in this hemisphere, every leader in this world.

RAY SUAREZ: Havana's moves also thwarted attempts in the U.S. Congress to ease or eliminate 40 years of trade sanctions against the communist island. Some in the Bush administration have even warned of tighter sanctions on Cuba, including greater restrictions on American travel, and sending money to family members there. The European Union, Cuba's largest trading and investment partner, condemned the Cuban actions, saying they could jeopardize a much-needed European aid package.

SPOKESPERSON: Ladies and gentlemen, Draft Resolution 82 is adopted.

RAY SUAREZ: And last week, the 53-nation U.N. Human Rights Commission said they'd send an envoy to Cuba to probe human rights abuses. But the Cuban government said it would not cooperate.

RAY SUAREZ: For more on the latest crackdown and the response by the U.S. and international community we get two views. Jose Miguel Vivanco is the executive director of the Americas division of Human Rights Watch. Frank Calzon is the executive director of the Center for a Free Cuba, a nonprofit group promoting a transition to democracy in Cuba.

Frank Calzon, these groups appeared to have been operating openly, meeting and visiting the pope, seeing President Carter, even receiving supplies from various overseas interests. Why this crackdown? And why the severity of this crackdown?

FRANK CALZON: Well, the crackdown has to do with the fact that the Cubans believe what the pope said when he went to Cuba. The pope talked about not being afraid, and he said to the Cubans, "Have no fear." And they began to talk and they began to organize, and thousands of Cubans have signed a petition submitted to the Cuban national assembly asking for change. So it is true that the Cuban people is fearful. I think one would have to also say that the Cuban government is very much afraid of the Cuban people.

RAY SUAREZ: Jose Miguel Vivanco, these groups had, as Frank Calzon suggests, reached a certain amount of notoriety, they were well-known outside the country, and in it. Why was this done?

JOSE MIGUEL VIVANCO: Well, I mean these groups represent, in my view, the most serious threat to the government of Fidel Castro. It's a grass-roots movement across the country, and they were challenging the government to a political referendum on the future of democracy, I mean, trying to reach some democratic change in Cuba. And Fidel Castro certainly took advantage of the distraction of the whole world into Iraq, into, you know, looking at the Iraq War, to crack down, to sentence the leaders of the movement to long, long, you know, years in prison of the this is the most serious setback in human rights in Cuba in many, many years.

RAY SUAREZ: Yet the best known, the best internationally known leaders of this movement were not targeted, like Oswar Lieu Pala. Jose Sanchez and others.

JOSE MIGUEL VIVANCO: I believe that... believe that for Castro to touch Sanchez or Pala, he would have to pay a huge price with the international community. But Raul Rivera, for instance, the most well known independent journalist and poet, was sentenced to 20 years in prison for just trying to write what he thinks.

RAY SUAREZ: Frank Calzon, the Cuban American National Foundation certainly no friend of the Castro government, its executive director suggested today that what Castro is hoping is that the U.S. will overreact. What do you think?

FRANK CALZON: Well, I'm sure that there are people that would like the United States to behave in one way or the other. But I don't believe the administration is ready to do more in regard to Cuba than it has done in regard to Poland or the people in Chile under Pinochet or the people in South Africa. The administration ought to continue trying to break Castro's censorship by getting TV and radio signals into Cuba. I don't hear anyone really talking about overreacting here. Havana has overreacted. Havana has killed three black Cubans for simply trying to escape on a hijacked boat. During their crime, no one was injured, no one was wounded. Now the Cuban government wants to blame the United States also for these executions. I think Fidel is out of touch and even many of his friends, or people who are willing to give him the benefit of the doubt in the U.S. Congress and elsewhere, have denounced the terrible things that are happening on the island right now.

RAY SUAREZ: But in the recent past, hadn't there been a thaw with the opening of food shipments, of a growing movement inside the United States Congress to reexamine the embargo and other things?

FRANK CALZON: The thaw -- I have in some sort of opinion articles that sometimes appear in the United States. Three or four years ago, Castro allowed some private economic activity -- the last year or so that has been cut down to about half. We're talking about being able to work as a barber or as a plumber. There has been an increased repression in Cuba. Cubans continue to suffer apartheid in Cuba most Americans do not know. You know, you talk about a thaw, but Cubans are not allowed to enter hotels and beaches and restaurants and clinics that are set aside for tourists. So I'm not sure that there has been any major thing. What has happened is that the Cuban people have begun to demand openly and peacefully to be treated like human beings, like anybody else.

RAY SUAREZ: Will this bring on a revisit of American attitudes, this action taken by the Castro government?

JOSE MIGUEL VIVANCO: Hopefully. I think it's time to review the policy. The policy of isolation to where Fidel Castro is certainly not working and it's not very really likely to work when you have the rest of the world, Latin American democracies, Canada, Europe and the rest of, you know Africa and Asia. Every year at the United Nations they condemn this policy. What you need to do is to work together with the U.S., you know U.S. Potential allies in Latin America, in Canada, in Europe, to exercise effective pressure in-- against the government to force that government to take the right steps in terms of respecting human rights and democracy.

FRANK CALZON: With all due respect to my friend, Mr. Vivanco, the policy of pressure, the policy of trade the Canadian efforts have come to nothing. The Europeans have tried that, and Castro has turned them down. Let's not forget that, if a policy of sanctions has failed, the policy of accommodation has also failed. Perhaps a time has come for both the United States and the Canadians and others to work out a different way of dealing with Cuba.

JOSE MIGUEL VIVANCO: I think it's important to understand that the option is not between an ineffective isolation policy, which is the policy of the U.S., which has ended up isolating the U.S. from the rest of the world, and not Cuba; or an unprincipled engagement with Cuba. There must be something in the middle, you know, targeted sanctions, not indiscriminate, you know, sanctions to the whole country. You need really to exercise pressure on that government, but with essentially with a multilateral approach to force the government of President Castro to take the right steps in terms of, you know, releasing political prisoners tomorrow, not, you know, years from today.

RAY SUAREZ: But what do you think President Castro is up to, Frank Calzon? He was on the verge of signing an international agreement with the EU, which would have opened Cuba as a market along with various African and Caribbean countries. Now that looks like it's a very shaky possibility. This would seem to have done economic damage in the near term to Cuba, as much as anyone else's interest.

FRANK CALZON: That's true, but he doesn't really care about the economic damage of Cuba. The reason Cubans have shortages of apples is because they don't come from the United States. But the reason they don't have oranges or mangos is because of Castro's economic policy. He doesn't care about the economy. All his efforts have one target: To obtain credits from the United States. He would like to have the American taxpayer to subsidize him. And since President Bush has said that he's not going to allow that, he's only left with additional repression in Cuba.

RAY SUAREZ: We shouldn't forget the... what's left of the dissident movement, Jose Miguel. Where does this leave them? No matter what the Cuban government, the American government and the EU do, where is the opposition now?

JOSE MIGUEL VIVANCO: The opposition, the dissidents, the independent journalists, human rights activists are very, very vulnerable and they are subject of intimidation, political repression, infiltration as the package showed.And so they really need the support of the international community. By themselves, they're not going to be able to bring some change in terms of, you know, progress on human rights, democratization in Cuba. That support should come from Latin America, from the U.S., from Canada and Europe. And only if we work together, and that is precisely the worst nightmare of Fidel Castro, if the rest of the world worked together, you know, with the same kind of approach, you know, and not just, you know, following a divisive policy of isolation and engagement on the other side, you know. So only if you can, you know, make a concerted effort to exercise pressure on that government, you will, you know, hopefully get some results very soon and the release of the political prisoners.

RAY SUAREZ: And Frank Calzon, in your view, what's the best thing that friends of the Cuban opposition outside the country can do to help what's left inside the country?

FRANK CALZON: I think what they should do is what Human Rights Watch and Amnesty International and many other groups have been doing, providing solidarity and support as it has been said, there are librarians in prison, there are doctors in prison, there are economists in prison, Mark W. Athreka, a very well known dissident, has been sentenced to a long prison sentence. What we need to do in regard to Cuba is not new; it's the same thing that the American people did to support freedom, again, in South Africa, in Chile, in Argentina, in Spain, in the communist world. And Cuba is only 90 miles away. Castro hopes that all these comments will disappear in a week or a month. We need to keep Cuba on the spotlight.

RAY SUAREZ: Frank Calzon, Jose Miguel Vivanco, thank you both.

RECAP

JIM LEHRER: Again, the major developments of the day: North Korea acknowledged it does indeed have nuclear weapons and might sell them or even use them; the Associated Press reported a North Korean official made those statements to a U.S. Envoy at talks in Beijing, China; and late today, the U.S. Central Command announced Iraq's former deputy prime minister, Tariq Aziz, is now in U.S. custody.

JIM LEHRER: And before we go, we add one more to our silent honor roll of American military personnel killed in Iraq. As always, we present them after the deaths are official and photographs become available.

JIM LEHRER: And we'll see you online and again here tomorrow evening with Mark Shields and David Brooks, among others. I'm Jim Lehrer. Thank you and good night.