FCC Endorses Built-In Copy Controls

WASHINGTON -- To the dismay of consumer advocates, the Federal Communications Commission has voted to mandate technology that prevents users from sharing copy-protected digital broadcasts.

Tuesday's vote orders makers of hardware that can receive digital television signals to build in recognition of broadcast "flags" that copy-protect content. When the flag-compliant device, such as a PC or DVD recorder, detects content containing a broadcast flag, it prevents its "indiscriminate" transmission over the Internet.

What's Affected

A broadcast flag is a single bit added to the data stream of broadcast DTV programming. By itself, the flag does not protect content. Instead, the FCC is mandating that digital devices check all incoming data for a flag.

In its 5-0 vote, the FCC ruled vendors must comply with the broadcast flag requirements in all equipment by July 1, 2005. Products such as digital VCRs, DVD players, and PCs must then contain copy-protection mechanisms that prevent users from distributing broadcast copyrighted digital content over the Internet.

Existing PCs, televisions, VCRs, DVD players, and related equipment will remain fully functional under the new broadcast flag rule.

The FCC ruling comes in the wake of political pressure exerted by the movie and television industries. In a move to avert online piracy of its movies, the Motion Picture Association of America told lawmakers the movie industry would not license its "high-value" content for digital television broadcast unless a rule prevented viewers from distributing it in turn.

The ruling makes the television and movie industries the big winners, although Rich Taylor, an MPAA spokesperson, is quick to point out that "free over-the-air television would now be delivered."

In a statement, MPAA president Jack Valenti called the FCC decision "a big victory for consumers and the preservation of high value over-the-air free broadcasting."

"All the way around, the consumer wins, and free TV stays alive," Valenti said.

At What Cost?

But the ruling may mean higher prices for appliances like televisions and PCs, whose prices have been declining.

"It's clear the scheme is fundamentally flawed as we are aiming to protecting content by re-architecting devices," says Mike Godwin, a senior technology counsel of Public Knowledge, a consumer watchdog group. "It's a costly approach to protect copyrighted works in the digital world."

The FCC is not requiring consumers to dump their existing devices, but some say the rule will make some equipment obsolete. All recordings made on compliant devices will be encrypted, which means they must be played back on compliant devices.

"More than 40 million DVD players in consumers' homes today will not be able to play content they record on new 'flagged' devices," says Chris Murray, legislative counsel of the Consumers Union.

Adds Godwin, "You can't write to a DVD that plays in a legacy player." Also, PCs designed to receive TV signals will cost more because PC vendors will have to integrate the mandated copy-protection mechanisms.

Other critics of the rule, including representatives of technology companies, say it does not address current equipment that can transmit digital content over the Internet. Just by allowing the existing equipment to exist and function, the FCC undermines the very holes it is trying to plug with the new rule, they say. For instance, most of today's TV sets are analog, and by capturing analog broadcast videos and digitizing them, consumers can circumvent the broadcast rule.

Godwin says the rule also goes against the emerging convergence between entertainment and personal electronic devices.

"We buy electronics with the idea of connecting them to each other," he says. With this rule, "we're going in the opposite direction."

Compromises Noted

A small victory for consumers, say consumer groups, is that the FCC rule seems to allow some fair use of copyrighted content. Two commissioners dissented in part from the ruling, urging--among other things--that a fair use provision be included. However, how it will be implemented is not clear. Consumers can legally transmit copies of videos between home networks and their home and workplace offices, although the rule does not address details of how this might work, or how many copies constitute the "indiscriminate" copying prohibited by the rule.

The same critics credit the FCC for not letting movie studios dictate the copy-protection technology. The MPAA wanted the rule to take effect next summer, rather than the July 2005 deadline set by the FCC.

Some technology vendors are also breathing a sigh of relief that the FCC does not favor a single copy-protection technology. Several firms, notably Philips Electronics, expressed such concern when the rule was under consideration. The FCC has promised an open certification process for the copy-protection technologies.

"Any [anticompetitive] concerns we've raised have been addressed," says Mike Epstein, manager of technology and standards with Philips' Intellectual Property and Standards group. But, he says, "the devil is in the details."

For all the gray areas in the rule's implementation, most say the best scenario after it takes effect is for consumers to continue to seamlessly copy and distribute content under "fair use" parameters. In the worst scenario, incompatibilities could exist among different flag-compliant devices.