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05.08

Opinion: The Jolly Roger of Digital Television

By Sourish Basu

Technology & Copyright Laws — A Cat-And-Mouse Game

Thomson Multimedia wanted to build an entertainment system — called SmartRight™ — that would let owners share television programs with a handful of other SmartRight™ owners anywhere in the world. The National Football League (NFL) and Major League Baseball (MLB) were worried that SmartRight™ would reduce their ticket sales by letting fans stay home and watch blacked-out games streamed from SmartRight™ users in other cities. To protect their stadium revenue, they held the specter of the Broadcast Flag — a piece of 2003 copyright legislation designed to prevent piracy of television programs — to pressure Thomson into crippling their technology. Thomson capitulated, and now SmartRight™ will only share content within the same house.

Such use of copyright laws to control technological innovations — especially those disruptive to business models of content owners — is a trend that goes back decades. In the 1970s, the Motion Picture Association of America (MPAA) vehemently opposed the marketing of Sony’s Betamax VCR — a then-novel technology — claiming that rampant copying of televised movies and television shows would destroy Hollywood. MPAA president Jack Valenti famously told a Congressional panel in 1982 that “the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.” But the VCR survived, and, ironically, videocassette sales through the 1980s made more money for movie studios than theater screenings.

In boosting profit margins from videocassette sales, the film industry adapted their business models to harvest a lot of money from a new technology that they were initially afraid would ruin their business. Equally common, however, is the movie industry's resistance to any novel technology potentially disruptive to existing revenue channels. They had always regarded the distribution of copyrighted TV programs over the internet — another new technology — to be a major revenue killer. At their insistence, in 2003, the Federal Communications Commission (FCC) introduced the Broadcast Flag regulation to curb such distribution.

The Broadcast Flag was a scheme for copy-protecting digital broadcast television, which was set to replace analog broadcasts received by nearly all existing television sets at the time. The scheme had technical and legal parts. The technical part was a simple watermarking system for digital television signals to specify the extent of recording and copying allowed. The legal part was a FCC regulation requiring that digital television sets and other devices that handle digital television content obey those specifications.

Once again, the content industry sought to enforce copyright by controlling technology. Under the Broadcast Flag legislation, manufacturing fully functional digital television sets, computers, DVD recorders and TiVo-like devices that allowed consumers to freely record, re-watch and share television programs became illegal.

For innovators, this meant unprecedented government control over technology for the purpose of protecting financial interests of content providers rather than the public interest. The legislation forced consumer electronics companies to “innovate according to the rules” of the entertainment industry, suggests Susan Crawford, a visiting professor at Yale Law School. Any innovation outside those rules — such as Thomson's SmartRight™ — could be stifled based on legality instead of functionality.

Such legal restrictions also meant, however, that those companies that did choose to play “according to the rules” could get a head-start in a regulated market, especially if they were instrumental in drafting those rules, such as the five biggest consumer electronics companies (the 5C consortium of Sony, Matsushita/Panasonic, Intel, Toshiba and Hitachi). Their initiative in drawing up the Broadcast Flag specification could give them a head-start in manufacturing Broadcast Flag-compliant devices and turn the home entertainment market into an oligopoly of five companies.

The Broadcast Flag — Some History

Digital television, introduced in the 1990s, offered improved picture quality and interactivity over analog television, but carried a potential cost to content providers. By 2002, most satellite television and premium cable channels in the United States were already digital. That’s when Congress charged the FCC with overseeing a transfer of the remaining avenues (basic cable and over-the-air television) to digital by 2006.

Digital media, unlike analog signals, can be copied many times without any degradation in quality — a copied digital television program is always identical to the original. Further, the information stream in digital television is similar to a movie file on a computer, explains technologist Seth Schoen of the Electronic Frontier Foundation. The copied program, just like any other file, can be easily transferred between two computers over the Internet. This ease of redistribution is particularly frightening to movie studios, explains Crawford, because their profit margins rely on the ability to charge licensing fees for multiple distribution outlets — such as box office, airline performance, rental, pay-per-view and DVD sales — for each work they produce. So as broadcasters and consumers migrated toward the newer, better digital television standard, movie studios sought ways to prevent online redistribution of digital television programs.

One way was to limit the viewer's ability to record programs, such as in present-day satellite television and premium cable. The signal in these services is scrambled by the broadcaster and is descrambled by a set-top box on its way to the television set. A television that can connect to the digital output of the set-top box must be constructed to implement certain restrictions, such as not recording digital content and not feeding external recorders through a digital output. Such restrictions are put in place by equipment manufacturers, Schoen explains, at the insistence of the cable and satellite companies, who in turn must follow the restrictions to get content from copyright owners. When Congress pushed for digitizing all television, content owners demanded the same level of copy-control for the soon-to-be-digitized “clear” channels — basic-tier cable and over-the-air digital television broadcasts — before putting content on them.

Scrambling the content à la premium cable would create an over-the-air television standard that is not free, since viewers would have to pay for a decoder — similar to a set-top box. Although only 15 percent of television-viewing Americans still use rabbit-ears, “as a political matter, it’s impossible for our senators and representatives to give up the idea of free over-the-air television,” explains Crawford.

Further, explains Schoen, over-the-air digital television signals are currently unencrypted. Although broadcasters could create a new encrypted standard for digital over-the-air television, “there’s no actual installed base of television sets that would understand that signal.” Brand new digital television sets bought by early adopters of digital television would not work with such a signal, turning people away from digital television. That would counter the FCC’s mission of facilitating a digital transition.

Thus, maintaining unencrypted over-the-air television became a political issue, says Crawford, which was convenient for content providers — since that meant they were required to keep over-the-air television signals clear. “They wanted their content to be protected, and now they could ask the equipment manufacturers to do it for them,” she explains. It shifted the cost, effort and onus of designing a proper copy-control system onto the electronics companies. The content providers, on their part, came up with the system they wanted electronics companies to adopt.

In 2001, Fox Broadcasting suggested embedding a descriptor — the Broadcast Flag — in digital television programs to specify acceptable forms of recording and distribution. Broadcast Flag-compliant television sets would refuse to record or share programs that had the Broadcast Flag set. Since the actual signal would be clear, however, a tech-savvy viewer could build a digital television set to simply ignore the flag. To her, the Flag would be akin to a “No Trespassing” sign on an unlocked gate. The Motion Picture Association of America and the 5C consortium recommended this proposal to the FCC, who ruled that all devices manufactured after July 2005 that could handle digital television signals would have to be Broadcast Flag-compliant.

Resolution and Impacts

A consumer using a Broadcast Flag-compliant digital television set would discover that the ability to record a program — to watch later or share with a friend — was now subject to the content owner’s whim. Content restricted by the Broadcast Flag didn’t even need to be copyrighted, explains Crawford. Even obvious fair uses of video, such as showing a news clip of a disaster in a fund-raising drive, could now be vetoed by the broadcaster. This, argues Crawford, “goes way beyond any national consensus we might have on the meaning of copyright and its exceptions.”

Further, flag-compliant devices would only talk to other flag-compliant devices, so DVD players bought tomorrow would refuse to work with television sets bought yesterday. Consumers who wanted all their devices to talk to each other would therefore face a costly upgrade to Broadcast Flag-compliant devices.

In a post-Broadcast Flag world, such upgrades could generate enormous revenue for the equipment manufacturers. This prospect may have led them to endorse the Broadcast Flag. More importantly, they saw economic sense in cooperating with content providers to make Broadcast Flag-compliant devices, since movie studios refused to make their content readable by devices that didn't obey their copyright restrictions.

Extraordinarily low consumer expectations — shaped in part by living in the United States, where devices are often clunky and crippled — also eased the alignment of equipment manufacturers with movie studios, explains Crawford. “We expect devices to be crippled. We just accept that. No one, for example, is outraged that you can’t burn [a copy of] a DVD,” she adds, or play a European DVD on a U.S. DVD player. Customers used to hamstrung technologies, equipment manufacturers reasoned, would not mind Broadcast Flag-compliant devices.

In many cases, however, such compliance went over and above the requirements of the 2003 FCC regulation. Before the Broadcast Flag went through, four non-5C consortium companies, including TiVo, proposed Broadcast Flag-compliant technologies (such as Thomson’s SmartRight™) to allow users to securely share digital television programs across the Internet. For example, a user who recorded a show on her TiVo in New York would be able to view it on a TiVo she owned in Paris, or share it with her son’s TiVo in Los Angeles. Although geographical localization was never a focus of the Broadcast Flag, three of the strongest pro-flag lobbyists, the MPAA, NFL and MLB, vehemently opposed this functionality. The leagues worried that fans would use this feature to watch blacked out games — which are not broadcast locally because stadium seats are not sold out — by streaming them from other cities where the leagues had permitted the game to be broadcast. Although this objection had nothing to do with copyright protection, everyone but TiVo capitulated and agreed to implement a “localization” feature in their design — even before it went up for FCC approval. This confirmed FCC’s own fears that private parties with enough clout could significantly influence the approval of technologies.

Perhaps the most troubling aspect of the Broadcast Flag regulation — beyond the MPAA’s influence, the disregard for fair use, and muzzled innovations — was the way the FCC overreached its authority. “The FCC doesn’t have the jurisdiction over devices that they have over signals” per their mandate, says Tarleton Gillespie, author of Wired Shut: Copyright & the Shape of Digital Culture (2007).

Broadcast Flag opponents held that the FCC could not regulate what devices, like TV-tuner cards, did with digital television signals, and in May 2005, the United States Court of Appeals for the D.C. Circuit agreed. In a lawsuit brought against the FCC by the American Libraries Association and others, the court threw out the regulation barely two months before it was set to take effect.

Although the FCC regulation was repealed, the process of enacting it has had long-lasting consequences, says Gillespie. The United States Constitution codified the notion of copyright purely as a utilitarian concept, he explains. Free exchange of ideas, the framers realized, was essential to sustain a public sphere full of information and discourse in the sciences and arts. But those ideas and creative works were not going to be put forward if the creators felt the effort was not economically sustainable. So the framers of the Constitution decided to grant a limited copyright term of 14 years to the creator, purely to strike a balance between free exchange and economic incentive. But the present interpretation of copyright — largely created by the entertainment industry — has transferred the ownership of copyrights from the artists to the content owners. Further, that interpretation suggests that culture is best enriched if copyright is enforced always and everywhere, for as long as possible, with a minimum of exceptions. “That interpretation gets reinforced” whenever a Broadcast Flag-like legislation is proposed and debated, muses Gillespie, “and my worry is that’s not a useful interpretation of copyright.”

Sourish Basu is a physics Ph.D. student at Cornell University. Basu was selected to be the 2007 IEEE-USA-sponsored AAAS Science and Engineering Mass Media Fellow. He spent the summer as a science reporter at Scientific American. When he’s not poring over equations, Sourish can usually to be found biking, hiking, cooking or roaming around with one of his cameras. Comments may be submitted to todaysengineer@ieee.org.

Opinions expressed are the author's.