Salute for 'Broadcast Flag'

Broadcasters and Hollywood appear to have the upper hand in the fight over technology designed to stop illegal Internet distribution of broadcast digital-TV programs.

Judging by comments of a top Copyright Office official last week, opponents of the "broadcast flag" overstate consumers' home-recording rights when criticizing the flag, which is the broadcast industry's and Hollywood's preferred regimen for preventing unauthorized redistribution of high-definition movies, sports and other high-value digital content.

Suggestion that consumers have a court-mandated right to create libraries of recorded shows, distribute copies to friends or initiate a variety of other uses "is simply incorrect," said Marybeth Peters, U.S. register of copyrights, during a hearing conducted by House Judiciary's intellectual property subcommittee.

Silicon Valley and consumer electronic makers oppose the flag, charging that it will needlessly increase consumers' costs and, if not immediately strengthened, will one day violate "fair-use" duplication rights by blocking the kind of unrestrained recording permitted for analog VHS tapes.

Last week's hearing examined an FCC proposal to require incorporation of flag technology into digital TV sets and recording equipment. Lawmakers reminded FCC Media Bureau Chief Ken Ferree that determining the strength of copy protections is the domain of Congress and the Copyright Office and warned the FCC not to overstep its authority.

The broadcast flag won't be seen by viewers. Instead, it is a code that will be embedded into a broadcaster's signal and would tell digital recording and storage devices how many times a user may copy a program for use outside personal video equipment. The aim is to prevent digital programs from being swapped over peer-to-peer networks similar to Napster. It also could block programs from being e-mailed around.

Peters, as head of the U.S. Copyright Office, is the chief adviser to Congress on copyright regulation and administers various compulsory licensing arrangements, including collection of royalties on movies and other content. But she expressed no opinion on flag's legality.

Peters said that fair-use rights, when it comes to copying television programs, extend little beyond the right to tape a program in order to watch it later. Instead, the Supreme Court in its 1984 decision upholding Sony's right to market Betamax home taping technology, said the government must weigh the benefits of a consumer's activity on a case-by-case basis. The main question is whether a practice, if permitted on a widespread basis, would benefit the public without undermining authors' incentive to create and distribute their works. In other words, preventing them from getting paid.

The potential for peer-to-peer networks to swap millions of digital programs without compensating the rightful owners is a very real, Peters said. "Producers of television programming have ample ground to fear that the transition to digital broadcasting may make them susceptible to massive piracy in much the same that record companies, recording artists, composers and musicians have suffered from Napster and its progeny."

The threat from file-swapping will become reality very quickly, warned Fritz Attaway, Washington counsel for the Motion Picture Association of America, noting that one peer site, Kazaa, has 875 million files to be traded and 195 million users worldwide. The National Association of Broadcasters, the film industry and creative guilds all favor the flag.

But Edward Black, president of the Computer & Communications Industry Association countered that the analog-to-digital transfer Attaway described wouldn't be solved by the flag. Additionally, he said, despite widespread piracy of DVDs and ready availability of encryption-breaking codes, DVD sales helped Hollywood conclude "its best year ever" in 2002.