Regulatory Watch : Digital Rights Bill Targets Hardware Manufacturers

Movie studios and other content producers are upping the ante in protecting copyrighted films and other content sent to millions of digital recording and viewing devices. Even as antiterrorism legislation roared its way through Congress in October, Sen. Ernest F. Hollings, D-S.C., announced his intentions to introduce a bill that would require manufacturers of interactive digital devices to install standard technology to block the unauthorized transfer of copyrighted material into PCs and other devices.

Disney, Fox and other industry heavyweights support the bill. The Security Systems Standards and Certification Act would make it unlawful to “manufacture, import, offer to the public, provide or otherwise traffic in any interactive digital device that does not include and utilize certified security technologies that adhere to the security system standards.”

That requirement has the manufacturers of digital viewing equipment on edge. They believe the bill would not only change their manufacturing process, but also give too much power to content owners. It would require manufacturers of interactive digital devices—PCs, TV set-tops and other digital appliances—to build in embedded standardized microprocessors to block unauthorized content. Many fear such a law would severely tighten the grip on the way standard over-the-air broadcasts are enabled, watched, recorded and played back. They also don’t want to relinquish control of key system design technologies. “We are not in the business of making a video recorder to give Disney the authority to turn it off or on,” a consumer electronics executive told an industry publication.

Vendors of digital rights management software have for the most part been at the forefront of the battle over illegal downloading or viewing of copyrighted material via the Web and other technologies. Content distributors have also launched their own programs to prevent theft: The Secure Digital Music Initiative, which includes the Big Five music distributors, is establishing standards for digital watermarks that can be stored on CDs. The 1998 Digital Millennium Copyright Act, which makes it a federal offense to pirate copyrighted digital material, has become almost irrelevant in the face of leaps in digital piracy technology. To combat piracy, software vendors have created ways to send automated warnings to would-be pirates who grab content off a peering network; other methods can report the IP addresses of members of peering networks who swap content illegally.

Studios, content owners, computer makers and manufacturers of consumer electronics have been talking for years about acceptable standards and designs for piracy-proof hardware. PC and consumer electronics builders would have to retool and redesign their products and manufacturing methods—an expensive proposition, especially in times of slowing sales. Movie studios believe the inability to win agreement from the manufacturers has slowed the rollout of digital TV.

So now the Senate may end up forcing manufacturers to agree on new standards within 12 months after passage of the bill. If they can’t do it by then, the Commerce Department would step in and do it for them.

Patience Growing Thin on E-911

Three public safety organizations, complaining that wireless carriers are dragging their feet in implementing Phase II E-911 capabilities, asked the FCC to put in place “serious penalties” for carriers that failed to comply with the October deadline.

The Association of Public Safety Communications Officials, the National Emergency Number Association and the National Association of State Nine One One Administrators believe the carriers have had ample time. “The commission established its rules five years ago, and carriers and their suppliers have long known that deployment must begin on Oct. 1, 2001,” the groups wrote the FCC. “The commission must stand firm on this and other deployment deadlines. Otherwise there will be little incentive for carriers and others to fulfill the promise of wireless E-911.”

Phase II deployment would raise location abilities to a dispatch standard. For instance, according to CTIA’s Travis Larson, once Phase II implementation works, emergency dispatchers should be able to locate a cell user calling for help within a radius of 50-300 meters. As things stand now, emergency operators must question wireless 911 callers to determine their location. “Emergency response teams must often waste critical minutes or longer, searching for those callers,” Commissioner Michael Copps wrote in an Oct. 5 opinion.

Copps also backs enforcement and punitive action if carriers don’t get the heat on. He was responding to an FCC decision to grant extensions to some of the nation’s largest wireless carriers—Nextel, Sprint, Verizon and the GSM portions of the AT&T Wireless and Cingular networks. The FCC wants the carriers to achieve complete deployment of Phase II in all areas across the nation where 911 call centers are ready and able to use this information no later than December 31, 2005.

Wireless carriers say completing the national E-911 system isn’t that easy. Many wireless users—the nation has some 122 million subscribers—would need new phones, and more than 100,000 cell sites would need to be upgraded. Industry sources estimate the costs could reach more than $1 billion.