Regulators Nearing Decision On Technology To Prevent Web Piracy Of Digital TV

The Federal Communications Commission will decide as early as next week whether some new video equipment should be made to recognize a "broadcast flag," a marker that could be used by broadcasters to prevent digital TV shows from being widely shared online.

"This is potentially the first real FCC step into regulating the Internet," said Ed Black, president of the Computer and Communications Industry Association. He said the FCC is moving too quickly and without public hearings on an issue affecting many millions of people.

Some people already share TV shows and movies online, but the practice is limited by the speed of Internet connections; it can take many hours to transfer high-quality copies.

Entertainment industry officials fear that with the onset of faster connections and the growing reach of digital broadcasts, video will follow the path of music, with top-quality copies proliferating online. They say easy access to those copies endangers free TV because after an initial broadcast producers won't be able to sell shows for syndication or overseas.

The music industry has seen CD sales plummet over the past three years as illegal music file-sharing became popular. The industry is suing people who swap music without paying copyright holders.

Critics of the broadcast flag say it won't stop piracy, but will force some consumers to buy new DVD players or other equipment to overcome compatibility problems.

"This is the first step that leads to trash dumps full of obsolete technology," said Chris Murray, an attorney for Consumers Union, publisher of Consumer Reports magazine. He said the FCC is working on "a solution that isn't going to work, with technology we haven't yet seen, to a problem we don't yet have."

A broadcast flag in an over-the-air TV signal would tell digital devices to encrypt shows when recording. The encryption does not prevent copying at home, but is intended to hinder online distribution. Under one proposed method, encrypted files would "self-destruct" after traveling a certain distance across the Internet.

The FCC's five commissioners still are reviewing details of the flag proposal, but they appear ready to endorse the idea, said an FCC official familiar with the measure, who spoke on condition of anonymity.

Traditional analog television uses radio signals sent as waves, but digital TV uses the language of computers, allowing for sharper pictures and sound and the potential for perfect copies that can be distributed online. Digital signals can be sent with satellites, by cable or as over-the-air broadcasts.

Congress has set a goal of 2007 for all television broadcasts over airwaves to switch from analog to digital. After the switchover, consumers who don't subscribe to a cable or satellite service will need digital tuners, either inside a TV or a set-top box.

Cable and satellite services already are rolling out technology to limit copying and prevent online sharing. The entertainment industry says the broadcast flag is needed to give over-the-air TV similar protection.

Current televisions, digital recorders and analog VCRs won't be affected by the flag, said Fritz Attaway, an executive vice president with the Motion Picture Association of America.

"With rare exceptions, consumers will never know the broadcast flag exists," he said.

It's those exceptions that concern critics. They note that encrypted shows could only be played back on devices designed to work with the flag, meaning a DVD recorded on a next-generation machine could not be viewed on an older model.

"I concede that for some consumers that's going to be an inconvenience, but that has to be weighed against the overwhelming consumer interest in keeping high-value content on free, over-the-air broadcasting," Attaway said.

Critics of the flag say it does nothing to prevent piracy using analog recorders like VCRs, which would be unaffected by the flag. Analog copies would lack the quality of a digital recording, but they could be converted into a format for online distribution.

Opponents also say the flag will make it difficult for consumers to send recordings online to friends or themselves at a different location.

The FCC is considering industry proposals for technology that restricts mass Internet distribution of broadcast shows but allows limited sharing, such as within a home network.