SET MAKERS ENDORSE 1394 DTV INTERFACE, 5C COPY PROTECTION

Move seems clearly designed to boost pressure on Hollywood studios to agree to use 5C standard for digital copy protection. While Sony Pictures and Warner Bros. have signed memorandum of understanding with 5C group of software developers, other 5 major studios -- Disney, MGM, Paramount, 20th Century Fox and Universal -- continue to balk at software licensing terms. “We hope the others will get on board,” said CEA spokesman. “We're trying to keep the train moving forward.”

Seeking to sell more DTV sets and displays, CE manufacturers are also trying to stem congressional opposition to 5C standard fomented by broadcast networks ABC, CBS and Fox. Sources said set makers fear new broadcast encryption battle is really “smokescreen” by balking film studios to postpone adoption of 5C standard. In lobbying lawmakers networks have sought to delay implementation of 5C, arguing that technology wouldn’t prevent their terrestrial TV broadcasts from being copied repeatedly by consumers or distributed illegally by Internet pirates (CD March 19 p3). Broadcasters lined up 12 key lawmakers who, in March 2 letter to Powell, warned that “the digital transition will slow considerably” and free, over-the-air TV would suffer if 5C were adopted because TV producers would move their shows to cable and satellite channels “where protections are clearly stronger.”

Expressing concern about that letter, Shapiro told Powell that CE manufacturers “do not disagree with the view that copyrighted broadcast programming should be fully protected by the copyright laws.” Indeed, he wrote, “we are particularly sensitive to the content community’s concern over the mass Internet retransmission of such programming.” But, noting that unscrambled broadcast TV “lacks the legal protection against circumvention that protects signals that are provided through conditional access systems such as cable and satellite,” he argued that “the ability to apply the DMCA in circumstances where the content is not scrambled or encrypted is very difficult.” He said it would take “an Act of Congress,” not FCC action, to impose “a mandate to protect broadcast content.”

MPAA, which has taken no position on 5C standard, declined comment. MPAA spokeswoman said 5 studios are continuing to negotiate with CE manufacturers and software developers over 5C licensing terms but remain deadlocked over issues, especially copyright protection for unscrambled broadcast programming. Industry observers see Disney leading charge against 5C, with Universal possibly wavering in its resistance.

CEA also appears to be trying to deflect any criticism of consumer electronics industry in continuing Washington debate over lagging pace of DTV transition. In that debate, broadcasters, cable operators, set makers, film studios and software developers have each sought to pin blame on other industries. CEA-backed Home Recording Rights Coalition (HRRC) sent its own letter to Powell May 4, complaining anew that cable industry continues to stymie speedy transition by dragging its heels on technical standards for competitive digital cable set-top boxes and licensing terms for its own copy protection technology. In that letter, Shapiro, who’s also HRRC chmn., urged Powell to seek public comment on cable’s POD-Host Interface (PHI) copy protection license and force all set-top manufacturers to adhere to same OpenCable technical standards. “Almost a year after the Commission’s deadline, cable industry standards and practices still do not support reliable manufacture of, or consumer investment in, cable-ready digital television receivers,” Shapiro said.

NCTA officials rejected HRRC arguments. “The CEA letter merely repeats arguments that the consumer electronics industry has made before,” said NCTA Gen. Counsel Neal Goldberg. “CEA is unalterably opposed to copy protection and refuses to accept that the FCC has already found it is appropriate to include copy protection requirements in a manufacturing license. CEA also is opposed to reasonable certification requirements even though the FCC has indicated that CableLabs certification of OpenCable- compliant products, patterned after the successful CableLabs cable modem program, would be in the public interest.”

Meanwhile, FCC set deadlines for comment on petitions for reconsideration of its Jan. digital cable must-carry order, which tentatively concluded that mandatory dual carriage of analog and digital broadcast signals violated free speech rights of cable operators. Oppositions to petitions are due May 25, replies June 4.