With New Services, New Risks

Having spent millions of dollars transforming their analog cable systems into digital broadband networks, MSOs have harnessed this new technology in ways that will eventually make the very concept of "cable television" a quaint anachronism.

Paradoxically, the digital technology that makes video-on-demand, high-speed data access and cable telephony possible also poses grave threats to the security of those services.

With the ability to transmit pirated programming worldwide with the click of a computer mouse, the Internet is an inherently insecure medium that threatens the economic viability of video-on-demand and other premium cable programming services. If programming can be had for free on the Internet, there will be little demand for VOD. To assume otherwise foolishly ignores the law of supply and demand.

While digital-encryption technology provides strong security, it will be nothing more than a high-tech Maginot Line if Internet piracy and digital rights management are not aggressively addressed by programmers and MSOs alike.

Those who think that digital encryption is a panacea need only look to the Napsterization of music and movies on the Internet and the plethora of counterfeit "smart cards" that continue to bedevil the satellite-television industry. It is no surprise that piracy and digital rights management were discussed at the opening session of this year's National Show.

MSOs will also face more direct threats to the security of their broadband services with the advent of the Federal Communication Commission-mandated retail market for cable set-top boxes and other "consumer interface" devices. This will be accompanied by the appearance of "CableCARDs," which will create their own security problems for the industry. While technical experts have worked miracles in developing the security software used in CableCARDs, unforeseen problems will no doubt arise as the retail marketplace matures.

The Broadband & Internet Security Task Force recognizes the seriousness of the security threats facing MSOs and content providers in the broadband environment. It is a nonprofit corporation whose members include leading MSOs, cable programmers and broadband security technology companies. The Task Force's mission is to assess the economic cost of piracy and promote measures that address the security issues of today to protect the services of tomorrow.

While technology is the first line of defense, comprehensive statutes are needed to provide MSOs and content providers with the ability to deter and punish those who threaten system security. With the principal federal cable-theft law greatly weakened by court rulings, operators have looked to state theft-of-service laws as an alternative, only to find many of them woefully outdated.

In 2001 the Task Force prepared model broadband security legislation based on a groundbreaking anti-piracy statute proposed by the Pennsylvania Cable Television & Telecommunications Association and enacted by that state's legislature in June 2000. The new law had an immediate impact on state law-enforcement efforts, resulting in several successful prosecutions of cable theft vendors in the last three years, with sellers of "high pass filter" digital theft devices among the many defendants.

Using the Task Force model legislation as a template, new broadband security statutes were adopted in Maryland and Delaware in 2001, followed by Virginia, Illinois and Michigan in 2002. As of June 2003, Florida and Arkansas followed suit, bringing the total to eight states that have passed these new laws in just three years.

Although these laws passed with no opposition in the six states which enacted them from 2000 to 2002, all that changed this year. With broadband security bills pending in Tennessee, Colorado, Texas, Florida, Arkansas and four other states, the Electronic Frontier Foundation (EFF), an ardent opponent of digital-rights management and other anti-piracy measures, mounted a misinformation campaign claiming that the legislation would outlaw legitimate consumer electronics products and criminalize otherwise lawful conduct.

Despite changes made to the model legislation that addressed the legitimate concerns of its opponents, it soon became clear that the EFF and its allies do not want any anti-piracy legislation. Two of the most telling arguments made were that the legislation unduly strengthened the ability of cable operators to impose conditions on the receipt and re-transmission of their services, and that any restrictions on the ability to re-transmit programming content – over the Internet or otherwise – unfairly infringes upon a consumer's "right" to make unrestricted "personal use" of copyrighted content. Citing the latter argument, the EFF mischaracterized the pending bills as "Super-DMCA" legislation patterned on the federal Digital Millennium Copyright Act.

That this claim is a gross mischaracterization is evident from the fact that while the DMCA protects copyrighted content within the framework of the Federal Copyright Act, the state legislation prohibits piracy and sabotage of communication services and the circumvention of anti-piracy technologies used to protect them. Although Congress has an exclusive role in prohibiting copyright infringement, state theft of service statutes have been on the books for decades and will be even more important in the digital age.

Fueled by a barrage of e-mails directed at legislators, the misinformation campaign succeeded in stalling, but not defeating, broadband security legislation in Tennessee and Texas, and also led the governor of Colorado to veto similar legislation despite its passage by overwhelming majorities in both houses of the legislature. These setbacks were short-lived, however, as Florida Gov. Jeb Bush signed a very strong broadband security bill into law on June 24, 2003. In doing so, Gov. Bush rejected arguments that the new law would outlaw VCRs and TiVo replay devices, with his spokesman stating that the bill "doesn't hurt the consumer's ability to benefit from the latest innovations".

The successful passage of the Florida legislation was largely due to the perseverance of the Florida Cable & Telecommunications Association and the Motion Picture Association of America, whose representatives worked in tandem to debunk the baseless claims made by the EFF.

Cable operators, programmers and anti-piracy technology companies should continue to promote the passage of strong state anti-piracy legislation simply because we cannot afford to let digital technology destroy the economic viability of the new broadband services it has made possible. In a world where intellectual property is in danger of becoming a meaningless abstraction, we have no other choice.

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