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Friday, May 06, 2005
GSM Association rejects revised phone DRM rates

Revised DRM licensing terms offered by the MPEG Licensing Authority remain "unacceptable", the mobile phone networks' club said.

The GSM Association, which represents more than 660 networks which handle more than a billion mobile phone users worldwide - said it had "met with dismay" the revised royalty regime.

In January, the MPEG LA suggested to the Open Mobile Alliance (OMA), which maintains technology standards in the mobile phone world, a $1 per handset and one per cent of the cost of each transaction royalty for the use of DRM technology patents it administers on behalf of ContentGuard, Intertrust, Matsushita, Philips, Sony and others.

Last month, however, the GSMA went public with its view that such a model was unworkable, calling the scheme "impractical, excessive and short-sighted". In short, network operators believe it's too darn expensive.

In response, the MPEG-LA suggested an alternative: pay 65c for each DRM-enabled handset and cap the per-user royalty at 25c a year. Since most DRM-protected downloads are likely to cost several dollars a pop, each user needs only make one to two downloads a year to hit the limit. Given the success of Apple's iTunes, punters are likely to download rather more than two items a year.

The GSMA still thinks the cost is too high, and warned that, unless prices are cut, MPEG-LA risks operators dashing off and acquiring a range of different DRM systems, making the phone content download market as fragmented and as broadly incompatible as are digital music downloads.

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