FCC Cracks Down on Piracy

Bowing to pressure from Hollywood studios and broadcasters, the Federal Communications Commission on Tuesday ordered consumer electronics and computer manufacturers to redesign their products to help deter piracy of digital television programs.

The unanimous action, which was widely expected, represents an unusual effort by federal regulators to mandate anti-piracy technology to head off potential problems. In particular, the FCC’s order aims to alter digital TV equipment to make it more difficult for programs to be copied on the Internet -- a practice virtually unseen today.

The commission said it would not enforce its order until mid-2005, and it took pains to encourage manufacturers to develop as many protection technologies as possible -- two key demands from electronics and software companies.

Studios praised the order, which they said would speed the transition to digital broadcasting by making it safer for them to release their most valuable programs in the new format. Broadcasters also welcomed the order because it would help them compete with cable and satellite operators, which already have several anti-piracy tools at their disposal.

“The FCC scored a big victory for consumers,” said Jack Valenti, president of the Motion Picture Assn. of America. “This puts digital TV on the same level playing field as cable and satellite delivery.”

Nevertheless, several public interest groups argued that the order would increase the cost of digital TV without delivering any meaningful benefit. And the two Democrats on the commission, Michael J. Copps and Jonathan S. Adelstein, complained that the order would allow broadcasters to prevent news, public affairs programs and other educational material from being shared over the Internet.

“The FCC has decided that the way to get Americans to adopt digital TV is to make it cost more and do less,” said Seth Schoen of the Electronic Frontier Foundation, a group that advocates civil liberties and technology.

Under the order, broadcasters will be able to trigger an electronic signal, or broadcast flag, on any program they want to protect. All devices made and sold after July 1, 2005, will have to be able to read the flag and obey it with an as-yet-unspecified technology to prevent Internet redistribution.

Although the commission stressed that the rule would apply only to products capable of receiving over-the-air digital TV signals, it is still likely to affect digital video recorders, DVD players and devices that connect digitally to TV sets. For example, homemade DVDs of digital programs will have to be scrambled or otherwise altered to prevent them from being posted to the Internet.

The order imposes no restrictions on digital programs if they have been converted to analog. That exception was designed to accommodate current digital TVs that are incapable of protecting digital shows, but critics say it leaves a huge loophole for pirates that makes the rest of the order pointless.

Analyst Richard Doherty of the Envisioneering Group, a technology consulting firm in New York, predicted that consumers would snap up devices before the new rules kicked in.

“How do you tell a consumer that the 2005 product costs X dollars more than the 2004 product, but you’ve got broadcast flag protection?” Doherty said. “Whose safety is this for?”

The commission put off deciding how it would select protection technologies to use with the flag. In the meantime, it said it would evaluate proposed methods based on how effectively they function, their ability to respond to hackers, the cost to manufacturers and the effect on consumers’ use of digital TV broadcasts.