In response, entertainment and networks group Chairman Jeff Bewkes made a dry, executivespeak response about an option to use -- at preagreed terms and prices -- features, segments or a full chain of a digital rights management. He talked about their "very collaborative relationship" and the "more than several working groups" that were trying to address the issues.

Nothing sinister there. But then Parsons chimed in.

First he talked about the creative products at the center of Time Warner's business. Then he talked about the need to protect them from theft. He suggested that Bewkes had understated the number of working groups assigned to the effort: "It must be up to 11 now," said Parsons. "We're actually working very closely with them."

"Because at the end of the day ... a large part of the answer has to be in the operating system," said Parsons. "It has to be what you can play back. Because no one has figured out how you can knock down file sharing." None of the computer electronics manufacturers, he explained, would agree to anything that "requires them to put out a machine that is less robust and less capable than the current machines they put out."

"So I think file sharing per se is going to be with us a long time," said Parsons. "What you can then gain access to -- what you can replay -- will be determined in large part by encryption systems and operating systems that recognize them.

"And so our belief is that Microsoft in particular has to be a huge part of the solution. We, as the largest content creator in the world, have to be a huge part of the solution."

Finally, making a joking reference to Time Warner General Counsel Paul T. Cappuccio, Parsons said he thought that the most important part of the Microsoft settlement wasn't the $750 million Time Warner had received, but rather "the creation of a working relationship that would enable us to actually begin to get our hands around what I think is the most inimical problem facing our business."

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