This is a partial transcript from Your World with Neil Cavuto, February 28, 2002. Click here for complete access to all of Neil Cavuto's CEO interviews. 

NEIL CAVUTO, HOST: As you just saw, News Corp. (NWS) president and COO Peter Chernin was among the witnesses testifying on Capitol Hill today. He joins us now from our Washington studios with more. I should mention, of course, that News Corp. is the parent of course is the parent of this network and Peter is my boss. Peter, good to have you. Thanks for coming.

PETER CHERNIN, PRESIDENT & COO, NEWS CORP.: Good afternoon, Neil. How are you?

CAVUTO: What came of this?

CHERNIN: Well, I think that this was a hearing called by the Senate Commerce Committee and Chairman Hollings because of their frustration with the progress on negotiations between the content companies and the consumer electronics and IT companies.

And I think from our perspective, it was a very positive morning. I think it narrowed down the issues because, in fact, we have made progress in some areas, but there are still some key areas where we have got to solve, particularly the looting of motion pictures and television shows on various file-swapping services on the Net. And I think the positive outcome of today was I think that there was, at least in my opinion, near unanimity among the senators on both sides of the aisle that this was something that had to be dealt with, that stealing is stealing and that American copyright products have to be protected.

CAVUTO: But Senator Hollings, as you know, is a pretty wily character. It seems to me that he's also trying to set the stage, you guys find a solution or we'll find one for you?

CHERNIN: I think that's absolutely true. I think that everyone, frankly, ourselves included, would prefer to see this solved by industry negotiation and then codified by legislation after that.

But I think what Senator Hollings is saying is if you guys don't get it together, we will get it together for you because it's critical that content be protected from theft on the Internet.

CAVUTO: Now, that is essentially how they kind of coalesced around a Napster solution, to try to prevent that kind of theft. But there's still Napster, you know what I'm saying. So, I guess the best way to analogize that is that there is some pirating going on. You just want to limit it, right?

CHERNIN: Well, there is pirating going on. I think we, the motion picture industry, are probably a little bit ahead of where the music business was with Napster only because it takes more spectrum to download movies and video products than it does take to download music.

And I think the real problem here is for the development of broadband, because broadband, I think, will make it faster to download this product. But we will not make our product available on broadband unless it's protected. And so, I think that the situation that the Commerce Committee finds themselves in is let's get the content protected and then let's get on with rolling out broadband across America.

CAVUTO: But, you know, those broadband guys, Peter, are the ones saying you are holding them back and that that's was hurting them because broadband cannot grow as a technology until you guys come to an agreement.

CHERNIN: I think that is probably true. I think it can't grow until there is rich media, movies and television shows and news programs such as this. I don't think broadband will grow for people just to get faster e- mails. And I think that the answer is quite simple.

We'd be more than happy to develop new markets. It's not as if we're in the business of trying to stay away for new markets as long as our content can be protected. So, again, let's our content protected and let's get on with rolling out broadband. And I think it's something that we should be able to see eye-to-eye on.

CAVUTO: All right. Very quickly, if you don't mind a general kind of economic question, do you share Rupert Murdoch's view that this still is a rotten advertising environment?

CHERNIN: Well, I think what Rupert and I both feel is that, yes, this is still a lousy environment. It is, on the other hand, it is improving a little bit. You know, it's certainly not boom times and not happy times, but we have seen some improvement in all of our advertising vehicles, our local stations and cable channels such as Fox News over the past three months. Now, it's still down because, you know, we had probably gone through more than a year, probably about 14 months of down time, and we're just sort of flattening out, maybe picking up a tiny bit. So we are still well below where we were a year-and-a-half ago, but at least there is some positive movement in the last quarter.

CAVUTO: Peter Chernin, thank you very much. We appreciate it, sir. News Corp. president and COO Peter Chernin.

CHERNIN: Thanks, Neil.

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