[DMCA-Activists] Cato Institute on FCC's broadcast flag regulations

[Seth Johnson]

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Subject: [fairuse-discuss] [Politech] Cato Institute on FCC's broadcast flag
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               [Politech] Cato Institute on FCC's broadcast flag regulations

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 To: address@hidden
 Subject: Cato TechKnowledge: Broadcast Flag Decision
 From: "Adam Thierer" <address@hidden>
 Message-Id: <address@hidden>
 Date: Wed, 12 Nov 2003 14:05:11 -0800 (PST)


 The Broadcast Flag Decision: The FCC Bends Over Backward to Protect
 Over-the-Air Television and the HDTV Transition

 Issue #64
 November 12, 2003

 by Adam D. Thierer

 Just how far will policymakers go to protect "free, over-the-air"
 television and our ongoing industrial policy experiment with
 high-definition television (HDTV)? To answer that question, one need look
 no further than last week's decision by the Federal Communications
 Commission mandating that by July 1, 2005, every consumer electronic device
 in America capable of receiving digital TV signals must be able to
 recognize a "broadcast flag"-or string of digital code-that will be
 embedded in digital broadcast programming in the future. In theory, this
 little bit (excuse the pun) of regulatory engineering will encourage
 content creators and broadcasters to air more digital programming "in the
 clear" (i.e., through the broadcast television spectrum), knowing that the
 broadcast flag will allow them to prohibit mass redistribution through
 peer-to-peer (P2P) networks. In other words, the broadcast flag mandate
 will prevent the "Napster-ization" of video programming.

 That's the theory, and to some extent it just might work. But is adding
 another layer of regulation to the existing mountain of HDTV mandates
 really a good idea? In one sense, it's tempting to say, why not? The
 history of broadcast television in general, and the HDTV transition in
 particular, is just an endless string of mini-industrial policies. Each
 industrial policy decision begets another and another. The theory has
 always been that broadcasting is a complicated and important business and,
 therefore, policymakers need to take special steps to guarantee its
 success. Somebody needs to figure out, for example, the transmission
 standards for broadcast television. Are 480 lines of resolution enough, or
 should we bump it to 1,080? Is interlaced video acceptable, or would
 progressively scanned video be better? Is a 4x3 TV set aspect (square)
 ratio good enough, or should all pictures be shown in 16x9 (letterbox)
 aspect? Should we phase out the old analog broadcast transmission on a
 specific timetable? Should each new television set include a digital tuner?

 Hey, somebody has to make these decisions, right? Sure they do, but it
 remains unclear why that someone should be the FCC. Nonetheless, in each of
 the examples just listed, the FCC has already adopted mandatory standards
 for companies and consumers to follow. We have aspect ratio standards and
 rules governing what counts as a "high-def" signal; rules governing by what
 date stations are supposed to make the digital transition in their
 communities; mandates requiring set manufacturers to install
 government-approved digital tuners in every set they sell; and now a
 broadcast flag edict mandating that every program and electronic device
 include or read government-approved digital code to guard against content
 redistribution. We are told to believe that the HDTV transition will not
 happen in this country without such mandates and micromanagement from
above.

 One cannot help but snicker at such an assertion since the HDTV
 "transition" has already been going on for almost 20 years and yet only a
 very small percentage of consumers receive HD signals today. Moreover, the
 FCC does not impose grand industrial policy experiments on most other
 high-tech industries, but they seem to make complex transitions all the
 time. The computer sector is equally, if not more complicated than
 broadcasting, and there exists a variety of knotty computing issues for
 which the FCC could potentially establish complex regulatory solutions. But
 they don't. Somehow the computer sector just keeps chugging along without
 such meticulous micromanagement from Washington.

 But what's done is done, and we long ago reached the point of no return on
 the road to a HDTV industrial policy. What should we make of the latest
 mini-industrial policy, the broadcast flag? Doesn't the content community
 have valid reasons to be concerned about widespread redistribution of their
 digital programming? Some broadcasters have even said they'd consider
 pulling their existing digital programming off the air if they couldn't
 ensure adequate protections existing against Net redistribution.

 As someone who's obsessed with HDTV and currently owns three HD sets, I
 certainly appreciate the value of high-definition television programming
 and want to make sure it doesn't disappear. But while the broadcast and
 content industry are correct in asserting that the widespread
 redistribution of high-definition broadcast content over the Internet might
 represent a serious problem, it's hard to believe anyone in America today
 has enough bandwidth or processing power to be downloading and
 redistributing massive digital television files via the Net. In the future,
 however, when broadband speeds (hopefully) multiply, content providers
 might have more reason to be concerned about the financial viability of
 certain programs if those shows could be redistributed to the world at the
 click of a button. In such a world, it might make sense for them to embed
 digital broadcast flags in their programming, or even encrypt their
 programming at the source and require consumers to purchase new equipment
 to decrypt that programming before it can be viewed. But it is an entirely
 different matter to have the FCC set up a mandatory regulatory regime that
 forces such solutions on the entire nation.

 Technology mandates are misguided because, well, they are mandatory!
 Policymakers should not lock industry or consumers into any static
 technological standard, even when it's done in the name of protecting
 intellectual property. IP rights can still be enforced in other ways. For
 example, programmers could sue individual users who redistribute content on
 a widespread basis without permission or compensation for the creators.
 Instead of taking this more targeted approach to prosecuting the handful of
 users that cause the most serious problems, the broadcast flag proposal
 opens the door for the FCC to create an intrusive new regulatory apparatus
 for the Internet and computers in the future. The FCC would be hard-pressed
 to point to any language in the Communications Act of 1934 or the
 Telecommunications Act of 1996 that gives them the authority to regulate
 IP, the Internet, or computers in this manner, but statutory law long ago
 ceased to be much of constraint on this agency's actions.

 Finally, there are some troubling enforcement issues here worth
 considering. In the wake of the broadcast flag plan as well as the digital
 tuner mandate, the phrase "compliant devices" will become more common in
 this arena. If I build a personal computer that powers my home theater
 setup and it includes a noncompliant digital tuner or video card, have I
 broken the law? What if I sold a few of those devices on eBay? If the
 broadcast flag makes my current DVD players obsolete, can I tinker with
 them to make sure they're still usable after July 1, 2005? What about the
 so-called "analog hole" problem of consumers simply using analog outputs to
 transfer files to computers, ignoring the broadcast flag altogether? And
 what happens when the broadcast flag gets hacked a few weeks after it
 debuts? Will the FCC invoke the Digital Millennium Copyright Act's
 "anti-circumvention" provisions to go after certain consumers who take
 advantage of the hack? What's the FCC's enforcement plan if and when each
 of these scenarios develop?

 So many questions. I guess we'll have to wait for the next few FCC
 industrial policies to be promulgated to get our answers. One wonders if
 the Soviets ever spent this much time and attention planning a sector of
 their economy.

 Adam Thierer (address@hidden) is the Director of Telecommunications
 Studies at the Cato Institute in Washington, D.C. (www.cato.org/tech). To
 subscribe, or see a list of all previous TechKnowledge articles, visit
 http://www.cato.org/tech/tk-index.html.
 [][]
     
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