ENCRYPTING DIGITAL BASIC TIER IS FAIR ‘MIDDLE GROUND,’ NCTA TELLS FCC

Objections raised by the CEA, the Consumer Electronics Retailers Coalition (CERC) and the Home Recording Rights Coalition (HRRC) are based on the “mistaken premises” that encrypting basic would lock DBS services out of home networking products or would “disenfranchise viewers,” turning the CableCARD conditional access device into a “home gateway.” Both those concerns are “misplaced,” the NCTA said. If an MSO encrypted a digital basic tier, any customer could use a CableCARD or set-top box to decrypt the signal once and transport it around the home “without the use of any cable-controlled conditional access.”

As for the allegation that encrypting the basic tier would disenfranchise viewers, the NCTA said the rule barring encryption of analog broadcast signals and cable’s analog basic tier was devised “because there were so many television sets deployed with the ability to receive unencrypted broadcast signals over cable with the use of a set-top box.” By contrast, the “vast reservoir” of legacy TVs that the CERC alleges would be locked out by encryption of the basic tier “cannot tune to a digital tier without a digital set-top box,” the NCTA said. “Permitting the option of encryption of digital broadcast signals would have little effect on consumers who wish to view cable’s digital offerings,” it said. As for the “other extreme” of MPAA’s call for requiring encryption of the basic tier, “it is not appropriate to convert the broadcast flag rules into a tool by which MPAA and its member studios can dictate cable operators’ transport technology.” The NCTA also argued that the FCC should maintain separate approval processes for broadcast flag and unidirectional plug-&-play. But it said outputs and content protection technologies approved “under the more demanding requirements” for unidirectional plug-&- play should be approved automatically for broadcast flag.

The HRRC and the CE industry urged the FCC not to bow to interests that would turn the broadcast flag proceeding into a referendum on copy protection. “The Commission should clearly and firmly reject such invitations to lead it astray,” the CEA and CERC said. The MPAA’s request for selectable output control “raises questions about its good faith” on its broadcast flag goals, the HRRC said: “If permitted to pursue this agenda, the MPAA will have converted this proceeding from one about whether digital broadcast television content can reach the Internet to one about how much power the Commission will delegate to MPAA members to control what consumer can see and do in the privacy of their homes.”

Macrovision, in its replies, was among those disagreeing on separate approval processes for broadcast flag and plug-&- play rules. “Because multiple products cutting across multiple industries will be affected” by DTV standards, a unified process “will streamline approval of content protection technologies… and provide a more straightforward mechanism for the Commission to resolve the conflicts that inevitably will arise during implementation of the 2 rules,” Macrovision said. It also urged the FCC to: (1) Explicitly permit multiple content protection technologies, including non-encryption-based alternatives. (2) Give “equal consideration” to analog interfaces.

Consumer groups Public Knowledge and Consumers Union said several commenters oppose any effort by the FCC to impose a personal digital network environment (PDNE) in the broadcast flag rules. If the Commission moves to “craft” such a PDNE, the groups said, they agree with the HRRC and others it must be as consistent with fair use as “other balancing principles” of the Copyright Act. They also argued that if the FCC gives in to the “urgings” of parties that the Commission “stretch its commitment and presence far beyond” the goals of promoting the DTV transition, there never will be any “end game.” The groups, which have filed suit against the FCC in the U.S. Appeals Court, D.C., alleging that the Commission overstepped its jurisdictional authority on broadcast flag, said if further regulatory intervention is appropriate, “the Commission should do so only to minimize the marketplace distortions and deleterious impact on consumers that the original broadcast flag and plug-&-play regulations will introduce.”

The Electronic Frontier Foundation (EFF) took particular aim in its replies at the MPAA, saying the trade group “is alone among commenting parties in taking the radical view that cable operators should be required to scramble DTV programming on the basic tier.” But the MPAA arguments “are without merit,” the EFF said. For example, on the MPAA claim that mandatory encryption will help MSOs protect copyrighted content on the basic tier, the EFF said: “This argument is a bit puzzling, as broadcast programming carried on the basic tier is already protected -- by the very broadcast flag regime successfully urged on the Commission by the MPAA!”

The Digital Transmission Licensing Administrator (DTLA) again pressed its case for the adoption of “market-based criteria” as “an essential and logical method” for certifying content protection technologies. The DTLA said it was pleased the proposal had drawn strong support from the IT community and from the MPAA. But it also took the MPAA to task, urging the FCC to reject its “backdoor request” for selectable output controls. The DTLA also answered what it called “the spirited attack” by Philips contending certain terms of the DTLA-administered 5C license were anticompetitive. Nowhere does Philips show that any terms of the 5C agreements “are per se unlawful, or that the license agreement as a whole does not satisfy the rule of reason analysis,” the DTLA said.

The MPAA said no matter what criteria the Commission adopts for broadcast flag, “it must provide for an adequate opportunity for content providers to challenge proposed technologies. This means at a minimum, that technology proponents must be required to submit detailed explanations of how their technology will prevent the unauthorized distribution of marked and unscreened content.” Again, the MPAA defended its call for the FCC to require encryption of the digital basic tier. “Doing so would help pave the way for future modulation schemes used by cable operators, and would help protect cable-originated programs, not just retransmitted broadcasts, against unauthorized distribution,” the MPAA said.