The FCC decides today how copied programs can be used. Hollywood views it as a pivotal issue
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Los Angeles Times
August 4, 2004 Wednesday
After intense lobbying by Hollywood, the Federal Communications Commission is expected to issue a potentially far-reaching ruling today affecting what television viewers can do with the programs they record.
The stickiest question before the agency is whether people can use a new breed of digital recorders from TiVo Inc. to pipe recorded programs over the Internet from their homes to their offices, hotel rooms, friends' living rooms or beyond.
The movie studios and others are urging the FCC to reject the TiVo technology, arguing that people should not be allowed to beam programs out of the houses where they were recorded.
The tussle began after the FCC required that digital television equipment guard against the "indiscriminate redistribution" of free TV shows via the Internet. Under this so-called broadcast flag rule, issued last November, manufacturers of digital TVs and recorders must install FCC-approved anti-piracy technologies on models sold after July 1, 2005.
Today's FCC decision will determine which of 13 approaches proposed by consumer-electronics and computer companies meet the new mandate.
Seven of the proposals deal with technologies for disks or removable memory cards that could be recorded on but not duplicated. Two others offer a secure way to move shows within a home network.
The other four — by Microsoft Corp., RealNetworks Inc., consumer-electronics giant Thomson and San Jose-based TiVo — proposed ways to protect programs so they can be safely transmitted over the Internet as well as a home network.
But in response to objections by the Motion Picture Assn. of America, Microsoft, Real and Thomson agreed to limit their software in ways that effectively bar viewers from sending shows over the Internet — at least for now.
Only tiny TiVo, whose technology powers a digital video recorder, resisted the studios' demand for this kind of "proximity control."
Consequently, the studios have given at least tentative support to all of the proposed technologies except TiVo's.
The studios and their allies maintain that allowing remote access to programs would undermine free local television broadcasts, the market for syndicated shows and other important elements of their business models. Hollywood also fears that viewers with high-capacity, Internet-connected recorders will have less appetite for DVD box sets of popular TV series.
Under several of the MPAA-supported approaches, viewers would be able to move recordings to laptop computers and other devices that they could take on the road.
TiVo, which had 1.6 million subscribers at the end of April, wants to give viewers even more flexibility: They could transfer shows from their recorder at home to any Internet-connected computer equipped with a special TiVo security device. Each owner would be entitled to transfer shows to as many as nine other recorders and specially equipped computers.
TiVo has taken elaborate steps to prevent programs from being intercepted, duplicated or forwarded. Still, the MPAA, the National Assn. of Broadcasters, the National Football League and Major League Baseball oppose the technology, in part because TiVo owners could send their security devices and recordings to anyone in the world.
"We think that TiVo does permit indiscriminate redistribution, albeit to a very limited number of people," said Fritz Attaway, an MPAA lobbyist. "When you multiply that by 100,000 or 1 million or 10 million TiVo owners, what does that do to the business model of local broadcasters?"
James M. Burger, who argued TiVo's case to the FCC, said the company could easily work with the studios to prevent indiscriminate redistribution and other specific issues.
TiVo controls every recorder and security device on its service, he said, so it could respond quickly to any improper activities cited by the studios or other copyright owners.
But "if the issue is, 'We don't want anyone to transmit free over-the-air television out of their home without our permission,' we have a problem," Burger said.
"TiVo is a small company," he added. "It needs to have the space to innovate. Obviously, the company feels very strongly that this is an innovation that does not harm content in any way."
Indeed, some consumer advocates are worried that the FCC might stunt the digital evolution of home entertainment, which is being powered by large storage capacity, powerful software and devices that connect over the Internet.
"This is the test case," said Alan Davidson of the Center for Democracy and Technology. "We're concerned about a precedent being set that stops people from being able to do the new, cool things with television that they're likely to do in an always-connected world."
One thing working in TiVo's favor is that FCC Chairman Michael K. Powell is a customer. "TiVo," Powell told the International Consumer Electronics Show in January, "is God's machine."