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Chris Llana, Editor


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Congress Talks Broadcast Flags

June 29, 2006

It's back! That most maligned and misunderstood anti-piracy device--the broadcast flag.

The House Subcommitte on Telecommunications and the Internet held hearings on broadcast flags on Tuesday (6/27). The idea is to give the FCC authority to once again require that consumer electronics manufacturers put circuitry in TV receivers, computers, and recording devices that would recognize encoded flags in broadcast programs. If a flag is detected, the machine would restrict a consumer's ability to "indiscriminately" distribute that (most likely pristine digital high-definition) programming over the internet.

It's the movie studios that are most concerned about piracy, which can happen in a number of ways. The broadcast flag rules would try to plug the digital broadcast TV piracy path.

The FCC instituted a broadcast flag requirement in 2003 that would have gone into effect on July 1, 2005. That regulation was challenged in court and subsequently thrown out on jurisdictional grounds.

The regulation itself was developed after long negotiations involving the various affected industries.

Those requirements would not have required broadcasters to embed flags in their programs, and would not have prevented consumers from making copies of digital broadcasts.

Proponents of the broadcast flag point out that digital programming distributed by cable and satellite services already have similar anti-piracy protections in place.

The parallel in the high-def DVD arena is of course the image constraint "flag" that is available to content providers to prevent the output of full-resolution high-def movies over analog outputs (by which they could be easily copied and distributed). So far, the movie studios have chosen not to use the flag to down-rez analog output (to 960 x 540 pixels).

The House hearing didn't have much to add to the debate (except on the separate issue of audio broadcast flags -- more on that later). Senate action so far is more instructive.

The Senate addressed the video flag issue in their mother-of-all-bills S. 2686 (The Communications, Consumer's Choice, and Broadband Deployment Act of 2006). S. 2686 has ten titles covering topics from fighting terrorism to broadband services, and presently is awaiting further action in the Senate Commerce Committee.

Just found out that the holdup in the Commerce Committee is due to a curse placed on the bill by Oregon's Senator Ron Wyden. Seems he wanted a stronger statement against broadband service providers favoring some content providers over others (for a fee), and his political rules hex threatens the bill with a filibuster when it reaches the Senate floor. The leadership is hustling 60 votes to get around the evil spell.

The part of S. 2686 that concerns broadcast flags is Title IV-Video Content, Subtitle C-Video and Audio Flag, Section 452-Digital Video Broadcasting. This section basically gives the FCC the specific authority to establish a broadcast flag that the court said it lacked.

The Senate bill would impose limits on what sort of copying and distribution could be blocked by content owners. To wit, the FCC's rules would have to allow the transmission of:

  • Short excerpts of broadcast digital television content over the Internet;

  • Broadcast digital television content over a home network or other localized network accessible to a limited number of devices connected to such network;

  • Broadcast digital television content over the Internet for distance learning purposes.

The FCC's rules would also have to:

  • Permit government bodies or accredited nonprofit educational institutions to use copyrighted work in distance education courses pursuant to the Technology, Education, and Copyright Harmonization Act of 2002 and the amendments made by that Act; and

  • Permit the redistribution of news and public affairs programming (not including sports) in which the primary commercial value depends on timeliness as determined by the broadcaster or broadcasting network.

Of course if the broadcaster did not insert a flag, there would be no technical restrictions on copying and distribution. Legal restrictions might still apply, depending on the nature of the content.

The debate on the definition of "fair use" is certainly not over.

That was abundantly clear in the audio broadcast flag portion of the hearing.

The issue there was whether satellite radio services (Sirius and XM) should be allowed to broadcast playlists of songs to digital recording devices without paying "mechanical" royalties to the musicians and songwriters who created the songs.

Mechanical royalties are those paid to performers and writers when a recording is sold, versus a performance royalty paid when a consumer is given the opportunity to listen to a song (eg. during live performance or over a radio).

The new digital recording device that Sirius has introduced is called the F50. It has been licensed by the FCC. XM Radio is introducing an as yet unlicensed device dubbed "the mothership" -- "It's the mothership; it's not the pod."

These devices would be able to receive and download/record digital songs in a manner similar to Apple's iPod, except that where Apple charges a buck for each song (with royalties going to the musicians/songwriters), the satellite radio customer pays nothing except the standard monthly subscription fee ($12.95). The songs can be catalogued and sorted without ever listening to the music, and then played and replayed over and over.

Anyway, big debate over that. A question of whether technology has gotten past existing royalty laws.

There was also a debate over proposed legislation that would require warning labeling on music CDs that incorporate anti-copy technology. H.R. 1201 is the bill. Seems reasonable to me; I'm all for telling consumers what they're buying.

Without reprinting all the details in the bill, here's the basic thrust:

A BILL

To amend the Federal Trade Commission Act to provide that the advertising or sale of a mislabeled copy-protected music disc is an unfair method of competition and an unfair and deceptive act or practice, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Digital Media Consumers' Rights Act of 2005'.

SEC. 2. FINDINGS.

Congress finds the following:

  • (1) The limited introduction into commerce of `copy-protected compact discs' has caused consumer confusion and placed increased, unwarranted burdens on retailers, consumer electronics manufacturers, and personal computer manufacturers responding to consumer complaints, conditions which will worsen as larger numbers of such discs are introduced into commerce.
  • (2) Recording companies introducing new forms of copy protection should have the freedom to innovate, but should also be responsible for providing adequate notice to consumers about restrictions on the playability and recordability of `copy-protected compact discs'.
  • (3) The Federal Trade Commission should be empowered and directed to ensure the adequate labeling of prerecorded digital music disc products.