Hollywood Seeks Copy-Protection Aid

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Hollywood studios are seeking the help of Congress or the Federal
Communications Commission to protect off-air digital-broadcast signals from
rampant piracy.

The studios and various equipment vendors have reached a deal to secure
digital-cable programming, but they remain divided on security of
digital-broadcast signals.

In a recent meeting with FCC officials, Hollywood representatives said it was
now necessary for either the FCC or Congress to mandate that equipment vendors
agree to protect digital-broadcast programming from unauthorized copying.

Protection of digital content is considered one of the keys to promoting the
rollout of digital TV, and the studios want to ensure that their huge
investments in movies and TV programs are not lost to piracy.

Unlike analog copying, digital copies do not lose picture quality with each
copy made.

Several FCC officials met Feb. 1 with representatives of The Walt Disney Co.,
News Corp., Viacom Inc., Sony Corp., AOL Time Warner Inc., Vivendi Universal
S.A. and the Motion Picture Association of America. The only studio absent was
Metro-Goldwyn-Mayer Inc.

Five of the studios are at loggerheads with members of the so-called 5C
group, which includes Hitachi Ltd., Matsushita Electric Industrial Co., Sony
Corp. Toshiba Corp. and Intel Corp.

Except for AOL Time Warner and Sony, the studios refused to sign a 5C
copy-protection license last year because it excluded protection of broadcast
signals and, thus, left a significant portion of consumer-desired programming
exposed to piracy.

In the FCC letter, the studios said the 5C group raised concerns that if
broadcasters worked as a bloc to adopt a copy-protection standard, they might
run afoul of antitrust prohibitions on joint conduct by competitors.

The MPAA sent a letter to FCC chairman Michael Powell Jan. 11 saying that
those antitrust fears were baseless because the law permits efforts to control
the unauthorized exploitation of intellectual property.

'Therefore, there is no valid reason for 5C to continue to resist inclusion
of the broadcast-protection component in the 5C specifications,' the studios
said in the FCC letter. Protection of broadcast signals would not involve
encryption, but the application of embedded watermarks that would authorize no
copying at all or copying once or several times.

The studios told the FCC that if the 5C group were willing to cover broadcast
signals in the license, the studios would use their 'best efforts' to secure
government mandates 'for the inclusion of the broadcast-protection component in
all affected consumer-electronics devices.'

The studios added, 'Because the conclusion of the 5C agreement will help to
facilitate the DTV rollout, there is a public-interest basis for government
officials to mandate that 5C now agree to the broadcast component.'

The National Association of Broadcasters strongly supports copy protection of
off-air programming chiefly because TV stations do not want to lose the best in
digital content to cable and other competitors that have copy-protection regimes
in place.

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