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Parsons: Digital-protection deal closer

Movie studios, consumer-electronics manufacturers and technology companies
have moved closer to an agreement that digital-television content must be
protected from rebroadcast over the Internet, AOL Time Warner Inc. CEO-elect
Richard Parsons said at a hearing Thursday before the House Telecommunications and
Internet Subcommittee.

"I think we are very close to having something that most of the industry
would put its arms around," Parsons said.

During the hearing, Dr. Paul Liao, chief technology officer for
Panasonic/Matsushita Electric Industrial Co. Ltd., said an agreement had been
reached between some parties, but a spokesman for the Motion Picture Association
of America disputed that afterward, saying, "They worked into the late hours, but they
still aren't quite there."

Liao said he expects the group of negotiators to release by May 17 a final
report on the technology, known as the "broadcast flag," as well as standards that will
be used to protect broadcast content from Internet redistribution.

Once an agreement is reached, industry representatives said, a narrowly written
piece of legislation will be needed to codify the deal.

While AOL Time Warner wants the government to stay largely out of the
negotiations, The Walt Disney Co. and News Corp. have been encouraging government
intervention if the additional pressure means they will reach an agreement more

At the hearing, Larry Blanford, president and CEO of Philips Consumer
Electronics North America, asked Congress to intervene in the talks. "This
proposal threatens the fair-use rights of the consumer and introduces
unnecessary levels of complexity and costs in consumer devices," he said.

Reaching a decision on how to copy-protect digital-TV content is important
because it will mean that the studios will begin producing more digital and
high-definition programming, which, in turn, should drive sales of digital
televisions and the transition as a whole.