A Win for Broadcasters, Hollywood

FCC approves 'flag' technology for piracy prevention
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Broadcasters and the movie studios claimed a major victory in their battle to protect digital TV programming from piracy last week. Next, the FCC must begin a crash course of reviewing and certifying products capable of implementing the new safeguards.

Beginning July 1, 2005, digital televisions and other products capable of receiving over-the-air DTV signals must be equipped with an FCC-approved technology to prevent unauthorized retransmission over the Internet. Broadcasters were doubly pleased because the FCC also refused calls to exempt news or public affairs from the protections.

The mandate applies not just to DTVs but to personal computers and digital recorders when they contain DTV tuners. These products will be required to implement instructions in the "broadcast flag," a code embedded in a broadcaster's digital signal indicating whether the program may be distributed over the Internet or other network outside a consumer's control.

The TV industry pushed for the mandate over the opposition of the computer industry out of fear that broadcasters wouldn't be permitted to air new movies and premium sports events without the ability to prevent illegal transmission via the Internet and the unauthorized peer-to-peer swapping that has bedeviled the music industry.

"The losers would be the 40 million Americans who rely exclusively on free over-the-air TV," said FCC Chairman Michael Powell.

"This puts digital TV on the same level playing field as cable and satellite delivery," said Jack Valenti, president of the Motion Picture Association of America (MPAA).

"All the way around, the consumer wins, and free TV stays alive," said Disney/ABC Washington chief Preston Padden. "Consumers have a big stake in helping to keep high-value content on broadcast TV."

Consumer groups, however, complained that the mandate puts traditional home-copying rights under implicit threat because the next step for the industry is to clamp down on duplication of analog programming.

Supporters counter that the regime isn't intended to stop individuals from making personal copies of shows nor will it stop them from producing and distributing illegal DVDs. Instead, the FCC said the flag will simply serve as a "speed bump" complicating mass piracy of shows. Against the wishes of the MPAA, the FCC settled on a relatively mild "robustness" standard requiring that compliant technologies be strong enough to prevent "ordinary" consumers from breaking them. Hollywood wants one strong enough to stop experienced computer hackers.

The flag also does nothing to fill the "analog hole," which allows consumers to downconvert a digital program to analog, then reconvert it to digital at some loss in picture quality. The same industry groups that worked out the flag regime, however, are negotiating a method intended to build hurdles in front of that type of retransmission as well.

Andrew Setos, technology chief for Fox Television and designer of the flag concept, said the technology isn't intended to solve all of broadcasters' piracy vulnerabilities, only the most potentially costly: illegal swapping of high-definition programs. Despite protests by opponents that it will take years before Internet bandwidth is sufficient to facilitate HDTV redistribution, he insisted that preparations must be made before that day comes.

The FCC did not approve specific technologies for implementing the flag regime but, on an interim basis, will certify products submitted by manufacturers for compliance. Each certification is subject to public notice and comment.

The FCC also seeks comment on a permanent process for approving new protection technologies.

The certification process will require manufacturers of digital demodulators, the equipment that transforms broadcasters' over-the-air transmissions into a simple signal for conversion to a picture, to seek FCC certification.

Digital VCRs, DVD players and personal computers built without digital tuners need not comply with the new rule; the same is true for products already on retailer shelves. Encoding of programming with the flag will be at the discretion of the broadcaster.

Democrat Commissioners Michael Copps and Jonathan Adelstein dissented in part from the FCC decision, arguing that coverage of government meetings and other non-copyrightable material in the public domain are not exempt from the flag. They also complained that the FCC failed to consider the impact of the flag on consumer privacy.

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