Studios, techies forge fragile piracy truce


Hollywood studios seeking to impose electronic controls on digital television broadcasts suffered a setback yesterday as a coalition of technology and consumer electronics companies supporting their efforts crumbled in a cross-industry power struggle reports the New York Times.

A long-awaited report that the studios hoped would provide the consensus necessary for anti-piracy legislation and that members of Congress hoped would jump-start the stalled rollout of digital television instead disclosed a host of dissenting opinions.

Hollywood executives have long maintained that they will not release their most valuable programming in digital format until they can ensure that viewers cannot copy those programs to the Internet. Makers of digital television sets blame the shortage of programming for slow sales of the devices, which are in fewer than a million homes.

The Broadcast Protection Discussion Group was formed last November to try to arrive at a proposal for a technological standard that consumer electronics and computer makers could build into their machines to protect digital broadcasts. And if there was general agreement on one point at the end of the months-long process, it was that such protection remained a worthwhile goal.

"The key agreement was that digital television should be protected from unauthorized redistribution," said Andrew G. Setos, president of engineering for the News Corporation's Fox Group and co-chairman of the group. "Hopefully work will now start on getting it memorialized as a federal mandate."

The studios and their trade group, the Motion Picture Association, sought to portray the report as a positive step forward that could still quickly result in legislation, or a Congressional directive to the Federal Communications Commission to supervise the regulation. But technology and consumer electronics executives said it was far too soon to think about adopting a voluntary standard, much less legislating one.

"May I say quickly that there is no consensus embodied in that report," said Tom Patton, vice president for government relations at Royal Philips Electronics. "None."

Philips, along with several other consumer electronics companies, complained that the studios' proposal would prevent consumers who use an updated device to record a program from watching it on one of the 30 million DVD players that are in homes today because the program would be scrambled.

The dissenters in the consumer electronics industry were also joined by Microsoft in objecting to the degree of control that the studios wanted to exert over which technologies would be deemed to meet their copy-protection standards.

"They were proposing criteria that were largely subjective," said Andy Moss, director of technical policy for Microsoft.

The basic idea is that broadcasters would include a digital "flag" in each broadcast, which would be detected by the technology in the devices and scrambled upon receipt. Digital programs that include the flag could be moved electronically between devices in the home, but not transmitted to the Internet.

Some device makers and computer manufacturers have been lukewarm to the concept, arguing that the expense and effort it requires would not prevent Hollywood's material appearing on the Internet.

And the Electronic Frontier Foundation, a civil liberties group that participated in the discussions, argued that preventing consumers from e-mailing an excerpt of a show over the Internet violated fair use rights under copyright law.

But the central stumbling block to arriving at a broad agreement on the proposal may simply have been a bid by the studios for too much control over carrying it out. Microsoft, Philips and Zenith all have copy-protection plans of their own that they would like to market to device makers. The studios, however, appear to favor one system developed by a group of companies that include Intel, Toshiba and Matsushita. Zenith is a subsidiary of LG Electronics.

Disenchanted by the informal discussion process, which did not involve clear procedures for resolving disputes or voting rules, several representatives from technology and consumer electronics companies said they would prefer any future discussions to take place in a forum sanctioned by the government.

That will almost certainly be one subject of debate when the House Energy and Commerce Committee holds an industry discussion on digital television next week.

"Frankly we're surprised," said Ken Johnson, a spokesman for Representative Billy Tauzin, the Louisiana Republican who leads the committee. "When we looked at the report we said, `Boy, we've got a lot of work to do.' "

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