March 02, 2003
The Broadcast Flag and DRM

The first panel discussion yesterday focused on DRM as a tool, with a lot of discussion around the Broadcast Flag (or see this definition) and what it means to DRM and broadcasting, movies, and the media business. Full transcript as best I could make out from the tape is here, with a few thoughts below and under the more button at the bottom.

Mozelle Thompson (FTC) is skeptical of content owners' and broadcasters' motivations because they have asked for contradictory protections from the FTC over the years.

Richard Epstein (U. Chicago Law School) is willing to give up "that little bit of consumer right" of fair use in order to protect broadcasters using the Broadcast Flag, if that's all that is lost. But he said repeatedly that there were still too many things undefined about the Broadcast Flag debate to really be able to advocate a position, but seemed to lean toward protecting content owners over everything else, on issues beyond fair use. Regarding HDTV and cable, he says: "So what we really have to do is to junk that technology (over the air broadcast), put everything through encryption, once you encrypt it then you can monitor it, and then you don't care about it, including the assignment problem, and then we can all go home, including the FCC."

Emery Simon (BSA) admitted that it's very expensive and difficult for consumer groups to get involved with standard setting bodies. The easiest thing for the public is to rely on Congress or the FCC, but for his "money, it's still better to try to do this through voluntary efforts, and include whoever wants to show up at these things and speak their minds."

Fritz Attaway (MPAA) said that he thought that while it is difficult for consumer groups to participate in standards body decision processes, consumers have the marketplace and can take or leave technologies, as they see fit.

Jon Healey (LA Times) talked about how difficult it is to describe these things to the public, when they don't care so much about the technical details and processes, but rather just want to know the ramifications of the options offered to solve these problems in broadcasting digital content.

Ed Black (CIAA) cautions consumer groups to get involved in the standards bodies or risk losing the fight to a few companies who might define a standard with a competitive disadvantage for other companies, where consumers then also lose out on the most competitive marketplace possible.

Update: see Ed Felten's post on this issue.

Ed Black: A quick reference to the Hollings bill, I think it was a terrible idea, but a wonderful piece of legislation because it helped galvanize a tremendous amount of interest on this thing.

Mozelle Thompson, FTC… (His opening line bringing some humor to what was becoming a tense subject) I'm from the government and I'm here to help you.... There is nothing wrong with being a monopolist, it depends on how you achieve the monopoly and ... market power. The same principles are applicable here because what we are talking about is standards setting, whether it's done by a self-regulatory body or whether it's done by the government, the question is does the standard actually appear to be overbroad, so instead of protecting innovation and incentiving innovation, it actually does is cast a chill on innovation, and actually thwarts the very purpose of having intellectual property rights. The question is not DRM, yes or no. It can be a helpful tool. It's under what context it's being developed and how it's being used. The same thing for the Broadcast Flag legislation, and too often we hear people talking from the polar extremes. ...This is not the field of dreams, build it and they will come. We have a lot of people out there who want access to content. ...We are increasingly a demand driven economy, where consumer confidence becomes important, but what I see is very little being done to focus on what the demand is, and what are the levers that you can have to create demand....

Richard Epstein… Ignorance is bliss, I think, on many of these panels. As best I can tell, the objection against the Broadcast Flag seems to be at this particular point is that it will stop fragmented use that would normally be protected under the fair use doctrine. I haven't heard any kind of other monopoly arguments, and if that's where it sits, then I guess I'm with Fritz. Although, two seconds ago, I was against him. And it seems like that is a trivial loss, as compared to the games you get from the distribution. The problem with fragments is, I think, much more serious. You get ten people who want fragments, and they each take ten minute fragment, and then somebody could reassemble the movie on the outside, and the difficultly that you have to remember is that he is working in a precipice environment, and if he loses one pristine copy of a DVD to an unauthorized network, then he's lost a billion of copies to it, and so when you start saying there is just a small breach in the wall, this is an industry in which everything cascades instantly, and it seems to me that if a Flag can do what he says, and does nothing more, and I don't believe this yet, because I don't know enough about the technical stuff, but if that's the representation, you don't have the problems that you have with the Hollings situation, where you are mucking up a computer thing which takes all sorts of nonprotected software, and is software specific and content specific rather than machine general, and so therefore in effect, that should be the line we go down, and we should be pleased that at least in the first instance, we've got Hollings off the table, now you can tinker with this thing, but it it's a question of doing it all, in his way, or doing it none, because the fair use leakage becomes essentially a complete stream, then I would rather give up that little bit of consumer right in order to keep the instruments working.

Ed Black on the debates at the time of passing the DMCA: Even now with the exceptions, which are modest, were fought tooth and nail, for research, and no one even thought of encryption research as an exception two months before the bill was passed and it surfaced and it was fought tooth and nail and I am in agreement with Emery, in those days, we were the two organizations debating the scope of encryption research, and what we have resolved, and were beaten on by Sen.s Hatch and Leahey to come to resolution on was where we are based on the political powers and forces involved. There was no broad understanding in Congress with what they were doing, these were nitty gritty little debates that were fought out in the trenches, and the impact, we think, is as we predicted. Far reaching consequences of people coming to use the anti-circumvention provisions for anti-competitive uses, not for intellectual property protections purposes, and that's the danger.

Posted by Mary Hodder at March 02, 2003 08:36 AM
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