CAPITAL CURRENTS: Selectable Output Control
As always, the slow pace of FCC decision-making stands in the way.
It’s been six years since the FCC adopted the cable TV “plug-and-play” rules. Those rules were derived from a memorandum of understanding between the cable industry and the consumer electronics industry.
One element of those rules is the prohibition against “selectable output control.” The Motion Picture Association of America (MPAA) opposed that prohibition but lost. Then in May 2008, the MPAA filed a “petition for expedited special relief” asking for a waiver of the prohibition. The Consumer Electronics Association and others opposed the petition. While the FCC might give “expedited relief” in time of national emergencies, it has never been accused of expediting a decision on business disputes. So the petition just sits there, gathering dust (electronic dust, to be sure, in the form of “ex parte” filings reporting on meetings with the new FCC commissioners to try to “educate” them on the issues).
Most readers are now scratching their heads, trying to remember what “selectable output control” means. It’s all about copy protection. Suppose you have an HD cable box with both a digital HDMI video output and a wideband analog video output (e.g., RGB or YPrPb). The HDMI output has a copy protection system built in, which requires handshaking between the source (the cable box) and the sink (the TV display). You can’t hook up the HDMI output to any old computer and store a digital first-run movie onto the computer’s hard drive and then later send that file over the Internet. (There might be some computers that comply with HDMI copy protection; they might allow copying to the hard drive, but they would prevent the redistribution of the digital movie files over the Internet.)
But the wideband analog video output does not have any copy protection. So you could send that output to any old computer (having a video capture card to convert from analog to digital) and store the first-run movie on the hard drive, and later send it out over the Internet.
And that’s a primary reason why first-run movies don’t make it to cable until months after they hit the movie theaters. The MPAA calls these movies “high-value content,” and cable subscribers simply don’t get access today to movies until they are no longer high-value content. But that would change if the content owner or cable operator could send a code that disables the analog output while allowing the movie to be sent from the digital HDMI output.
So the MPAA wants to allow the content to carry a code that “selects” an “output” (the wideband analog port on a cable or satellite box) and “controls” it (turns it off).
The opposition to this waiver request comes from the TV manufacturers (which have traditionally been opposed to copy protection) and Public Knowledge, the public interest group that has been active in the “net neutrality” debate. They argue that consumers would be deprived of the full capabilities of their HDTV sets. They claim that 20 to 25 million HDTVs would be incapable of receiving and displaying movies that had the selectable output control turned on. (These numbers are based on CEA estimates of the number of HDTV receivers shipped that did not have an HDMI input. For example, in 2005 there were about 10 million HDTV sets shipped, but only 50 percent had HDMI inputs, and the rest had only wideband analog inputs.) Eventually these older HDTVs will be replaced with HDMI-capable models, but the CEA says that, even today, there are HDMI-capable HDTVs that are nonetheless hooked up to the cable box using only the wideband analog ports – and that will always be the case.
The MPAA (supported by the cable industry and the DBS satellite operators) says that these home viewers would not be deprived of anything they are now receiving. Only the “high-value” movies would be protected with selectable output control, and none of these subscribers have access over cable or satellite to those movies today. But they do have access over the Internet. DirecTV says that it needs access to high-value movies “in order to meet competition in the marketplace. Alternative providers (such as Netflix) are already able to distribute similar content because they are not subject to the same rules that restrict DirecTV. This places DirecTV at a competitive disadvantage.”
When the FCC adopted the prohibition in 2003, it said the issue “involves a difficult balancing of interests,” but it said the output control functionality “might be advantageous to consumers in facilitating new business models.” The MPAA calls the delivery of first-run movies a new business model that will be advantageous to consumers. But, as always, the slow pace of FCC decision-making stands in the way.