Kinder MPEG-4 License Approved

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It appears that a potentially crippling licensing controversy surrounding
MPEG-4 may have been settled.

The MPEG Licensing Authority -- the organization that oversees license-fee
collection and distribution for the Moving Picture Expert Group technology --
issued its final version of the terms for MPEG-4 yesterday, which offers caps on
how much content owners will have to pay to use the new multimedia standard.

The terms make significant changes to an earlier draft version that generated
a firestorm of criticism from the industry.

The final terms will allow cable operators and satellite providers to license
MPEG-4 video technology for $1.25 per subscriber, while cable- and
satellite-gear makers would pay 25 cents for each encoder/decoder device they
produce.

For Internet providers, there is no fee for the first 50,000 encoders and
decoders registered, and 25 cents per activated decoder/encoder after that, with
an annual $1 million cap.

Internet-content owners, meanwhile, will pay nothing for the first 50,000
subscribers yearly, then 25 cents per subscriber yearly, or three-hundredths of
a cent per minute, to present material in MPEG-4 video format, again with an
annual $1 million cap. They can also opt to pay the $1 million annual fee
upfront.

For video that is transmitted and stored for a fee, the content provider will
pay between one penny and 4 cents per 30 minutes of content, depending on the
length of the file.

While complex, the final fee scale may help to ease fears generated by the
draft version, which, among other things, proposed a $2-per-stream license fee
for MPEG-4 transmission with no maximum or exemptions. This raised fears that
content distributors dealing in high volumes would avoid using MPEG-4 due to the
high cost.

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