Hollywood last week realized a key policy objective of the Internet age when the Federal Communications Commission adopted rules designed to protect digital off-air TV programming from rampant Web retransmission.
The FCC's Nov. 4 embrace of the so-called broadcast flag was hailed by Hollywood studios and the TV networks that they supply as a critical step in the commission-led migration from analog to digital broadcasting.
The FCC accepted Hollywood's argument that high-value HDTV programming would not be distributed via off-air broadcasting if individuals could send copies of the programming around the globe over the Internet.
Hollywood also argued that HDTV programming withheld from broadcasters would migrate to cable and satellite. The FCC also feared that consumers would have less reason to buy digital TV sets if broadcasters were denied HDTV programming.
The broadcast flag affects products capable of receiving programming over the air. Those devices, including TV sets, VCRs and DVD players with digital tuners, must comply with the rules by July 2005. Computers with built-in DTV tuners must also comply.
Cable operators can pass through the broadcast flag or secure the content through their own conditional-access systems. Current FCC rules bar cable encryption of broadcast signals. The agency is seeking public comment on whether to lift the encryption ban.
The creative community cheered the FCC decision. "The FCC scored a big victory for consumers and the preservation of high value over-the-air free broadcasting with its decision on the broadcast flag. This puts digital TV on the same level playing field as cable and satellite delivery. All the way around, the consumer wins, and free TV stays alive," said Jack Valenti, president of the Motion Picture Association of America.
Some did not share Valenti's evaluation, calling the flag too restrictive for the average consumer. The flag, for example, will prevent the same person from e-mailing a broadcast clip between office and home computers, or sharing that clip with family and friends.
"Plain and simple, the broadcast flag is an attempt by Hollywood not only to control what you watch, but how, when and where you watch," said Public Knowledge, a Washington, D.C., public-interest group that fought FCC adoption of the broadcast flag.
Some groups also said the broadcast flag can't close the so-called analog hole, which allows Internet distribution of analog broadcast programming that has been digitized. But Hollywood countered that the inability to achieve perfection should not be an excuse to do nothing.
Big media companies pressured the FCC to act quickly. Viacom Inc., owner of the CBS, at one point threatened to withhold HDTV programming from broadcast release. The company later backed down.
The Consumer Electronics Association asked the FCC to consider exempting news and public-affairs programming. But the National Association of Broadcasters, whose members consider local news their lifeblood, resisted. The FCC rejected the exemption.
But by killing the exemption, FCC member Michael Copps observed in a partial dissent, "even broadcasts of government meetings could be locked behind the flag."