Federal effort to head off TV piracy challenged

A digital-rights advocacy group is mounting a legal challenge to a new FCC regulation intended to prevent piracy of digitized broadcast.

Mike Godwin, the legal director for Public Knowledge, a digital-rights advocacy group in Washington, is a fan of Showtime's new drama series "Huff." So three weeks ago, when he missed the season finale, he decided to download it to his personal computer.

It took about seven hours to download all 500 megabytes of the hour-long episode over his high-speed Internet connection, using the latest file-sharing software designed to handle large digital files.

Still, he did get it. And he did watch it.

"It's a great show," he said.

To Godwin, the time-consuming download (and the file's poor quality) indicated that the rampant piracy of digitized broadcast programs--a threat Hollywood has long warned against--was hardly imminent. But to the Federal Communications Commission and the Motion Picture Association of America, cases like this one suggest a future of widespread illegal file-sharing that must be stopped before it begins.


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The debate will be presented in oral arguments this week before the District of Columbia Circuit for the United States Court of Appeals in a lawsuit brought by Public Knowledge and others against the FCC, challenging a new regulation that is intended to prevent such bleeding of television content onto the Internet.

"This is about whether the FCC is going to become the Federal Computer Commission and the Federal Copyright Commission," said Gigi B. Sohn, the co-founder and president of Public Knowledge. "The FCC does not have the power to tell technology manufacturers how to build their machines."

All sides agree that the new rule would do just that in attempting to limit unauthorized sharing of digital broadcast content over the Internet. The rule would require that as of July 1, all new consumer electronics equipment capable of receiving over-the-air digital signals--from digital televisions to computers equipped with TV tuner cards--must include technology that will recognize a "broadcast flag."

That flag is simply a marker of sorts, a packet of bits embedded in a digital television broadcast stream that essentially carries the message "this stream is to be protected." In addition to recognizing that message, new equipment must include technology that will prevent the content from being distributed to other devices unless they, too, are flag-compliant.

To the entertainment industry, the rule is a necessary precondition to its participation in the nationwide move toward digital broadcasting that Congress and the FCC have been promoting for nearly 10 years--a transition that would, among other benefits, free up valuable tracts of the electromagnetic spectrum now being used to deliver bulkier analog signals. The MPAA has argued that without the broadcast flag rule, content creators would have no incentive to provide digital content over the airwaves, because people could simply pluck video streams out of the air and redistribute them to millions of viewers over the Internet.

"It's very simple," said Fritz Attaway, a vice president and Washington general counsel for the MPAA. "Without the broadcast flag, high-value content would migrate to where it could be protected."

In practical terms, such "protected" places would be cable and satellite systems where digital content can be more easily scrambled, encrypted or otherwise controlled, leaving broadcast networks at a distinct disadvantage in the new digital marketplace. (About 20 million American households still receive their programming exclusively over the open airwaves, according to Nielsen Media Research.)

But the MPAA's position has also been understood by some to be simpler and starker: if you don't make it safe for us to provide high-value digital content over the public airwaves, we won't.

The transition to all-digital broadcasting is supposed to be completed by the end of 2006, after which the unused parts of the spectrum are to be reclaimed by the federal government. Those frequencies could then be used for, say, public safety communications, or, perhaps more important, auctioned off for use by emerging wireless and other technologies.

The Congressional Budget Office estimates that such auctions could generate $15 billion in revenue for the government over the next 10 years. Other estimates put the value much higher.

But if content creators refuse to provide digital programming because of piracy concerns, consumer demand for digital television will be low, which means a slower transition to all-digital broadcasts. And that, in turn, would mean no revenue for the government from spectrum auctions.

Less than 5 percent of all households now have televisions that allow them to view digital broadcasts, according to the Consumer Electronics Association.

"The FCC has a unique role in seeing this transition through," said Rick Chessen, chairman of the commission's digital transition task force, "and one of the key elements of the transition is making sure that high-quality digital content is available. If that content isn't there or if it migrates somewhere else, then the transition, and ultimately the broadcasting system itself, is hurt."

The only other viable option to the broadcast flag--encrypting digital broadcasts entirely--would have been a much more heavy-handed approach, Chessen said, because consumers have already purchased millions of digital televisions that would be unable to receive the encrypted signals. Under the broadcast flag system, noncompliant devices could simply ignore the flag and function normally.

Chessen also noted that the agency had encouraged competition by not mandating any particular technology to make new consumer devices flag-compliant. So far, 13 methods for doing so have been developed by 9 companies--including big players like Sony, Philips and RealNetworks--and submitted to the FCC, which has approved them all.

And using the Internet to redistribute legitimately copied content is not wholly ruled out, Chessen said, as long as there is some mechanism in the devices to prevent "mass and indiscriminate" sharing.

Consumer electronics manufacturers have, for the most part, kept a fairly low profile in the debate, wanting neither to be burdened with cumbersome design specifications nor to upset the powerful content industry, which is the chief proponent of the flag.

"We have a strong history of defending fair use and innovation," said Jeffrey Joseph, the vice president for communications at the Consumer Electronics Association. "But you also have to have content to make these boxes worth a dime."

But staunch opponents of the broadcast flag rule--which include groups like the American Library Association, the Consumers Union and the Electronic Frontier Foundation--see it as an unprecedented regulatory sledgehammer.

In only a few limited circumstances has the FCC issued design regulations for the manufacture of consumer electronics--and in those cases, only after a statutory mandate from Congress. The V-chip is one example; closed-captioning capabilities in TV sets is another.

But the broadcast-flag rule was not created by a Congressional directive, and opponents argue that is at least partly because the kind of piracy it is meant to prevent is not a big problem.

"There is no evidence on the record that piracy of digital broadcast content is a problem now or is going to be a problem in the near future," said Sohn of Public Knowledge. "We don't want agencies making rules based on nothing. And there's also no evidence that the broadcast flag will do what it wants it to do."

Indeed, it is a fairly simple matter--and will probably remain so even if the rule survives--for even mildly dedicated pirates to capture and convert signals back and forth from digital to analog, effectively defeating the flag. ( Godwin noted that his version of "Huff," like nearly all video content now circulating on the Internet, was probably an analog signal at some point.)

Another problem, said Sohn, is that the broadcast flag would prohibit redistribution of public domain works and stop certain kinds of distribution of content that is allowed under the fair-use provisions of copyright law. "Let's say you want to do a video blog, or want to comment on a TV show with a 10-second clip and share it," she said. "You won't be able to do that."

Other opponents of the rule say there will be no way of knowing what sorts of new technologies might have emerged without the regulation, because every device involved--televisions, video recorders, portable devices on which video programming can be displayed--will be forever shaped by the design specifications laid out by the broadcast-flag rule.

"Everything would have to be built to this single standard," said Susan Crawford, a professor of Internet law at the Cardozo School of Law in New York. "It's like being bitten in the neck by a vampire. As soon as you buy one compliant device, you'll have to continue buying new devices to keep them working together."

Whether the court will be sympathetic to any of these arguments is an open question, but Sohn and Godwin of Public Knowledge say they are confident that their arguments will be persuasive--particularly because the FCC issued the rule without prior action from Congress.

"This is basically the Roach Motel approach to intellectual property protection," Godwin said. "Content can check in, but it can't check out."

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