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Squaring Off Over Piracy

In the fight over the right to copy digital TV programs, consumer groups face a nearly united front of lobbyists for the entertainment and technology industries.

Hollywood and the broadcast networks are already demanding that Capitol Hill reinstate anti-copying protections enforced by the FCC but thrown out two weeks ago by the federal appeals court in Washington. They expect support from Silicon Valley and TV-set makers.

“There is now no government agency with authority to deal with the most serious issue raised by the transition to digital television: the lack of security for content,” says Rick Cotton, general counsel for NBC Universal.

NBC and the other networks fear that studios and other copyright holders won't permit new movies and other high-value HDTV programming to air on broadcast TV unless government copy restrictions are imposed. Cotton says Congress must give the FCC authority to protect digital content after it has been received by a TV because digital content, unlike analog broadcasts of the past, can be duplicated into thousands of copies at the touch of a button.

The court ruled unanimously two weeks ago that the FCC went far beyond its authority to regulate TV sets when it ordered manufacturers of any device capable of receiving a digital transmission—including PCs and electronics outfitted with television tuner cards—to include “broadcast-flag” technology. The flag is a code embedded in digital broadcasts that tells TV sets to block illegal retransmission of broadcast shows over the Internet and other computer networks. The flag is not meant to block home recording.

Activist Gigi Sohn says consumers scored a “slam dunk” over Hollywood and the big broadcast networks in federal appeals court by stopping government rules aimed at illegal copying of digital TV programs.

But her group, Public Knowledge, which fights for consumers' digital- content rights and helped finance the court case against the FCC anti-piracy rules, will find it much harder to protect that victory as the battle moves to Congress. With a handful of consumer groups, Sohn must face down the entertainment giants.

Public Knowledge and allies like the American Library Association fear that, besides affecting TVs, the flag will put undue limitations on other devices capable of receiving and distributing TV programs—including TiVo, digital VCRs, iPods, computer tuner cards and cellphones—and inhibit further development.

House Commerce Committee Chairman Joe Barton (R-Texas), who is drafting legislation to speed the DTV transition, is the industries' most likely source for redress. They are expected to ask that Congress either impose the flag itself or grant the FCC authority.

Barton hasn't spoken on the flag issue, but one staffer for another Commerce Committee member says Barton and other lawmakers on the panel see a threat to broadcasts of high-definition programming as an impediment to viewers' adoption of DTV.

Barton may choose to include a flag mandate in his DTV transition bill or try to move it as an independent piece of legislation, say staffers, but “there is little chance he will do zero,” says one aide.

The court ruled that the FCC has the right to govern how TV signals are received but can't dictate what is done with them after that.

Anyone logging on to Internet file-sharing networks such as Grokster can find hundreds of the latest TV shows posted for illegal downloads—testimony to the business threat posed by unlawful downloading and consumers' demand for immediate access to it.

The computer industry and set makers—businesses that once opposed the flag—have now embraced it. Like the networks and the Motion Picture Association of America, they insist it is the most viable option for protecting against illegal copying.

Says Don Whiteside, VP of corporate technology for Intel, “The flag approach balances the need for protection against indiscriminate retransmission of television and freedom for innovation.”