FCC May OK Rule to Fight TV Piracy

Federal regulators are poised to grant Hollywood the first of its three wishes for the digital future: a requirement that television and computer manufacturers limit what viewers can do with digital broadcasts from local television stations.

The Federal Communications Commission rule, which could be adopted this week, would make it harder for people to retransmit digital TV shows on the Internet.

Yet even proponents admit that the rule by itself wouldn’t stop online piracy. And critics say it would be pointless and potentially costly, setting a dangerous precedent for government regulation of computers and software.

“As soon as we install it at some expense ... and it doesn’t work, some people are going to go in front of Congress and say, ‘It doesn’t work! The world’s going to end! Do something!’ ” said Michael Epstein, technology manager for Royal Philips’ intellectual property and standards unit.

Countered Fritz Attaway, a top counsel and lobbyist for the Motion Picture Assn. of America: “Some protection is better than none. We’re better off having it than not having anything.”

The proposed rule is based on a relatively simple mechanism, called a broadcast flag, that tells digital TV receivers whether to keep a program off the Internet.

What makes it unusual is that it would be a preemptive effort by the government to shape technology to battle piracy, rather than relying on copyright holders to punish infringers by taking them to court.

The next two items on Hollywood’s wish list: restrictions on devices that convert audio and video into digital files and on file-sharing networks that let users copy items from one another’s computers.

In meetings with consumer electronics manufacturers such as Panasonic and technology companies such as Microsoft Corp., Hollywood’s representatives have made clear their desire to have computers, video recorders, CD and DVD players and home networks redesigned to prevent unauthorized copies of movies, songs and TV shows from being made or played. These changes would have to be implemented through government regulations, for which the studios are laying the groundwork in Washington.

The studios believe the changes would help them protect their intellectual property, but Attaway said these efforts could benefit consumers too. By creating what amounts to a digital playing field that’s closed to pirates, he said, entertainment companies could open their entire vaults to consumers online.

Some technology companies agree with that premise.

“It’s pro-consumer because it’s enabling new choices,” said Donald M. Whiteside, vice president of legal and government affairs for Intel Corp.

But some critics say it would be better to foster innovation and competition than implement draconian rules. They also say the vision of a secure environment for digital movies and music is a pipe dream.

The current piracy threat is small because digital TV shows contain so much data that few viewers, if any, can send the shows over the Internet. But steady improvements in Internet connection speeds and data compression technology will open the door to TV piracy eventually. Hollywood wants to require the digital constraints now so that they could be widely deployed before would-be pirates get busy.

The anticipated regulation would take advantage of the so-called broadcast flag, an electronic trigger already hidden in digital TV signals. Broadcasters that want to stop a program from being transmitted over the Internet would turn the flag on. Otherwise, they would leave it off.

The FCC rule is expected to require any device capable of tuning in a digital TV signal to detect and obey the flag. It would require DVD recorders, among other devices, to scramble the discs they record, which would make those discs incompatible with today’s DVD players.

But the proposed rule calls for no restrictions on digital programs if they have been converted to analog. A top FCC official said the approach, though not perfect, still would slow piracy.

Technology and consumer electronics companies support Hollywood’s desire to protect its most valuable programs, such as high-definition versions of blockbuster movies and popular TV shows. But they are opposed to giving Hollywood control over which technologies can be used to accomplish that goal.

Mike Godwin of Public Knowledge, a public interest group that often opposes Hollywood on copyright issues, said the rule’s effect “is that whole classes of technology suddenly are under FCC jurisdiction.”

The rule could force products besides TVs to be redesigned and regulated, he warned.

FCC legal advisors met this week to iron out final details of the broadcast flag proposal and hoped to have an agreement by Friday.

Industry sources and staff members at the agency said the FCC would require the consumer electronics industry to start delivering products capable of obeying the broadcast flag within 18 months or so. However, key details still would need to be resolved.

“It’s clear they are not going to let the studios pick and choose the technologies by themselves,” said one industry lawyer who represents consumer electronics companies.