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Thursday, September 18, 2003
 Philips says Hollywood’s plan to protect movies and TV shows won’t work
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Message Text: Lawrence J. Blanford, President and Chief Executive Officer of Philips Consumer Electronics, told Congress that a proposal by Hollywood studios to prevent the unauthorized redistribution of digital TV programming over the Internet would not work, would hurt consumers, and would impede innovation by consumer electronics makers.

Meanwhile, Blanford endorsed a bill that Senator Sam Brownback introduced this week to address issues involving “digital broadcast content protection,” urging Congress to pass it and the Federal Communications Commission (FCC) to adopt its guidance when considering regulation in this area.

Blanford also said that, because of the current technological limitations in redistributing digital content over the Internet, Congress has plenty of time to consider the issue fully. He expressed hope that a “watermarking” system could address the problem without causing harm to consumers, and he offered to work with the studios on such an approach.

While Congress and the FCC both have roles to play, Blanford said “sequencing” is critical. In fact, he said that Congress must act first to protect over-the-air TV content before the FCC acts.

The problem, he said, is that Hollywood’s approach does not meet any of three essential elements of a digital content protection system around which industry and public policy makers can unite. The plan, which is before the FCC and which the Motion Picture Association of America (MPAA) supports, would require that all devices recognize a data bit in their digital TV signal – the “broadcast flag” – and encrypt the content using only “authorized technologies.”

First, he said, the plan would not work. That is, it would not prevent the unauthorized redistribution of digital broadcast content over the Internet, as the MPAA recently acknowledged to the FCC. “The bottom line is that it leaks like a sieve,” Blanford said.

Second, the plan would force consumers to replace (and the FCC to regulate) “virtually every single device in the home network.” It also would severely restrict consumers’ “fair use” and reasonable expectations by stopping workers from sending digital broadcast content from their homes to their offices, students from sending it to teachers, and people from sending it to their elderly parents.

Third, the plan would give a small group of consumer electronics and computer companies, through their control of “authorized technologies,” the incentive and opportunity to restrain competition on digital content protection technology and digital consumer electronics products.

In contrast with the studios’ plan, Blanford said, Brownback’s legislation “gets it right.” That is, the legislation recognizes that Congress must both protect digital content as well as consumers’ rights. It recognizes that those goals are complementary, not mutually exclusive. Unlike the studios’ plan, for instance, Brownback’s bill would prohibit the FCC from regulating on behalf of a specific digital content protection technology.

In any case, Congress does not need to act quickly, Blanford said. Today, it takes anywhere from five hours and 20 minutes to nearly 800 hours to transfer a two-hour program over the Internet, depending on the signals and technologies used. That surely makes the widespread unauthorized redistribution of digital broadcast content a practical impossibility.

With that in mind, Blanford said that the relevant parties should seek a more effective approach, and he expressed hope that “watermarking,” rather than encryption, offers such a solution.
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