COMBATANTS STEP UP THEIR RHETORIC ON BROADCAST FLAG

Philips also restated its belief that the Commission lacked jurisdiction to impose the broadcast flag’s “encryption technology mandate” proposed by MPAA and the “5C” companies (Hitachi, Intel, Matsushita, Sony, Toshiba). Philips also pressed its case again for 2 “alternative regulatory structures” to broadcast flag proposal. They include the “functional regulation and self-certification” approach that Philips said would remove the FCC “from the business of picking technology winners and losers and build in incentives to promote competition and innovation in the digital content protection marketplace and the consumer electronics and IT marketplaces.”

In a reply typifying the escalating war of words during the wind-down toward likely FCC action on broadcast flag at the Commission’s Oct. 16 agenda meeting, Digital Transmission Licensing Administrator (DTLA), representing the 5C consortium, shot back that Philips’s approach “would sanction an extraordinary and unwarranted government intrusion into the robust and competitive market for content protection solutions.” DTLA said Philips’s proposals were flawed because they “seek to impose upon all competitors a one- dimensional vision of what the market should be and thereby constrain competition and innovation and resist consumer choices.”

As in its past comment filings at FCC, Philips again took particular issue with rules “X.3” and “X.4” of the proposed broadcast flag regulations on the ground that they “effectively permit the private licensing terms associated with an authorized technology to trump virtually everything that would be regulated by the Commission.” Philips said the “sweeping change” imposed “unilaterally” in July by the 4C licensing entity onContent Protection for Recordable Media (CPRM) rules for recordable DVD typified “a real-world example” of its concerns toward X.3 and X.4. Philips said the change required CE devices using CPRM to search all incoming analog content for CGMS-A, which it called “a marking technology in which the 4C companies have a financial stake.” Philips said the change confirmed its “worst fears about the potential threat -- to the public interest, competition and innovation -- posed by a government mandate of privately controlled digital broadcast content protection technologies.”

The DTLA response didn’t address the 4C change in CPRM by name, but said broadcast flag regulations “would exclude no technology from Commission consideration.” Contrary to Philips’s assertions, DTLA said, its proposal would require “minimal government regulation and will promote marketplace competition.” Moreover, DTLA said, broadcast flag rules have sufficient safeguards built in to assure that “any demonstrably sound protection technology will have a full and fair opportunity to obtain approval, even without support from any broadcaster or motion picture studio or device manufacturer.” DTLA said contrary to Philips’s argument, “the Commission, not private parties, controls the right of any technology proponent to obtain ‘Table A’ approval” under the broadcast flag provisions.

Meanwhile, the IT Coalition, composed of the Business Software Alliance and Computer Systems Policy Project, told the FCC in an ex parte filing the Commission decided to go ahead and embrace the broadcast flag, it should do so in 2 parts, first by adopting general rules “tagging” HDTV broadcast content, 2nd by a further rulemaking seeking more elaborate comment on the robustness and certification of content protection technologies. “There is no urgency” to combine the 2 stages into single rulemaking, the Coalition argued. It said “DTV devices are already on the market, so the need to provide certainty to the consumer electronics market” for the 2004 holiday selling season doesn’t apply as it did for those that argued in the plug-&-play proceeding that prompt Commission action was critical. Moreover, testimony last week by MPAA Pres. Jack Valenti before a Senate Governmental Affairs subcommittee that the problem of video downloading was 3-4 years away “clearly demonstrates that the Commission has time to get it right,” the Coalition said.

Thomson, in a separate ex parte filing on the timing of bringing broadcast flag implementations to market, told the FCC it might be possible to incorporate them “on a voluntary basis” in some TVs coincidental with the first DTV tuner mandate deadline of July 1, 2004. But Thomson said mandatory implementation of the broadcast flag would pose “a sufficiently high degree of technical risk” to make it “imprudent to establish such an obligation” until a year later -- July 1, 2005, “at the earliest, given the established and recognized 18-month manufacturing cycle for these products.”