Copyright 2002 Warren Publishing, Inc.

Television Digest…02/18/2002

From Lexis-Nexis

Hollywood's major movie studios are pressing the U.S. Federal Communications Commission for government intervention to help establish common technological standards for copyright protection on digital devices.

The studios also told FCC Chair Michael Powell that collaborating with broadcasters on the issue didn't pose antitrust concerns. Executives of AOL Time Warner (AOL TW), Disney, Fox, MPAA, Sony Pictures, Viacom and Vivendi Universal met earlier this month with FCC Cable Bureau Chief Kenneth Ferree, Rick Chessen, chair of FCC's Digital TV task force, and members of Office of Plans & Policy and Office of Engineering & Technology. Studios fear that, without adequate protection, their TV programs, movies and other content could be copied and distributed on Internet without reimbursing copyright holder.

Among the studios' talking points was the idea of common standards for digital consumer electronics. Absent such measures, they said, consumers, producers and distributors would face incompatible standards likely to "retard the rollout of new digital services." Studios have been working with engineers on so-called "5C" technology to provide protection for audio and video signals among digital media devices such as DVD players, TVs, set-top boxes, VCRs. Studios said they were prepared to conclude license agreements as long as 5C included protections for broadcast content.

But studios and equipment makers remain divided. The latter are worried that common technology would raise antitrust concerns and said they wanted to clear their technical proposal with consumer electronics industry. Manufacturers involved include Hitachi, Intel, Matsushita, Sony, Toshiba. Studios — except AOL TW and Sony — refused to sign a 5C license last year because it didn't include broadcast protections. That's key for studios because their content often is transmitted via broadcast, and lacking protections, that content could easily be pirated.

Cross-industry standards and licensing that serve to promote content protections, such as water-marking, on DTV signals, are "fully justifiable and legitimate activities under the federal antitrust laws," attorney Daniel Swanson wrote to Powell on behalf of MPAA. Swanson said existence of consumer benefits "flatly rules out any contention" that negotiations and implementation of common standard for protection of intellectual property violate antitrust laws under DOJ and FTC guidelines. He said lack of alternative solutions was another major reason why Powell should look favorably upon studios' efforts. Powell has said DTV transition would be one of FCC's major priorities on his watch.