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Digital Television: A Private Sector Perspective on the Transition
Subcommittee on Telecommunications and the Internet
Mr. Chris Cookson
Good morning, Chairman Upton and members of the subcommittee. I am Chris Cookson, Executive Vice President/Chief Technology Officer at Warner Bros. I am here today as a representative of Warner Bros. to express my company's enthusiastic support for the transition to digital television. Warner Bros has been a leader in digital television innovation and believes that digital TV will be good for both consumers and the entertainment industry. With DVD, for example, Warner Bros. worked actively to bring viewers a much better digital picture than was available with analog VHS, and we are pleased with the way consumers have responded. We are intrigued by the prospect of digital television more generally -- for example, the networked home where consumers can access information and entertainment in the ways that best suit their lifestyles; where music and movie collections can be served to any room whenever they're wanted at the click of a button. This convergence is one of the driving visions of the AOL Time Warner merger. What digital television promises is greater consumer choice. All of this country's media and communications industries - satellite, telephony, cable, video, broadband and the Internet - already are or soon will be utilizing digital technology. With the powerful tools of digital distribution, consumers will enjoy a much greater range of delivery options and pricing variations. For example, a consumer could have a choice of: Video-on-demand to watch a movie once, A 48-hour "pass" with unlimited viewing, A subscription to a range of on-demand titles, Or the option to own and keep a copy. So, given its promise, why has the transition to digital television been slower than anticipated? Certainly the speed of technological change and the questions raised over digital transmission standards have made many wary about investing in a technology that could be quickly made obsolete. And the need to roll out digital technology with provision for rights management and the control of copying has involved conversations across industry lines. This has been more complicated than was anticipated. Deploying suitable technologies has taken considerable effort from three industries in collaboration - the entertainment industry, consumer electronics manufacturers and the information technology industry. We are pleased with our progress and agreements we have reached so far. Why is digital rights management so important to digital TV deployment? Digital technology offers consumers numerous advantages - higher quality, lower costs, greater flexibility and choice - and overall a better value. But those advantages carry a greater risk of unauthorized copying and redistribution. In the real world, Blockbuster can advertise "Buy for $19.99, Rent for $3.99" or 30 movies in 30 days for a set fee. In a digital world with unlimited copying and retransmission, those choices wouldn't exist. Without a "rights management" capability, every viewing would need to be priced and sold as if a permanent copy were being made, thereby increasing prices and limiting investment and creative incentives. To bring consumers the broadest range of options, it is necessary to permit the consumer to buy, and to price, each option. In a digital world, we expect consumers to be able to freely make a copy and share many kinds of programming, consistent with the rights they choose to buy. One major component necessary to bring these advantages to the digital home is a technology that protects content as it is transmitted from a set top box to a recorder and to other devices across the home network. Five consumer electronics and information technology companies - Intel, Matsushita, Toshiba, Sony and Hitachi - have joined together to create an encryption and authentication technology that can be used to protect those links. This 5C technology can be turned on when the conditions under which content was received into the home require it -as may be the case with cable or satellite video conditional access delivery. This encryption technology is designed for a home network; it is not technologically suited for over the air broadcast television, but it can be used to protect broadcast TV transmissions delivered by cable or satellite. We think that the 5C digital rights management technology is key to promoting the rollout of digital television and to encouraging content owners to make high value content available in critical release windows. We have signed an MOU with the 5C companies and look forward to its swift deployment and use. Can broadcast television signals received over-the-air be protected under current or foreseeable technology? We think not, and we believe that would delay the consumer benefits of what we can do with existing technology. We produce some of the most popular programming in the industry-- West Wing, Friends, and ER -- that we would of course like to see protected from unauthorized retransmission over the Internet. We wish there was a silver bullet technology to protect broadcast transmissions - but we haven't been able to find one to date that doesn't create more problems than it solves. The challenge here is different because the over-the-air broadcast transmission is in the clear-today there are no conditions attached to their receipt by consumers. In our decision to go forward with 5C, we realized that today's technology could do little that was meaningful to prevent homes that receive the signals over the air from retransmitting that programming over the Internet. But we do not want to delay digital TV until as-yet-undeveloped technology comes into being.
Why don't we endorse legislation at this time? We believe that the anti-circumvention provisions of the 1998 Digital Millennium Copyright Act are striking the right balance. The DMCA was carefully negotiated and is being interpreted correctly in the courts. It needs time to work. The uncertainty of a protracted legislative debate will likely cause even more delay in the acceptance of DTV. There is no straightforward technology that can be mandated. Watermarking has been proposed but will be extremely complicated to deploy meaningfully. A great deal more needs to be learned before a workable and secure architecture can be proposed. For example, since watermark detectors need to look at specific file types, a mandate would be meaningless unless the number of file types was controlled and limited. A detector that works in MPEG 2 wouldn't find a mark in an MPEG 4 stream or any other compression format. After the product with the detector is shipped, any new format would be unknown and the system would fail. New formats couldn't be permitted without risking the overall integrity of the system. Mandating a standard at this time would curtail legitimate innovation in compression-one of the most rapidly changing technologies-while giving pirates a place to hide. Any simple manipulation of the data format would effectively obscure the mark. We recognize that we don't have a perfect world. but the perfect is often the enemy of the good. We think that the cross-industry negotiations must be given the opportunity to continue to develop useful solutions. The market should be allowed to evolve without imposing rules that curtail flexibility and innovation. Given the fast pace of developments in digital entertainment, government intervention at this point in time could inhibit the creation of new products and services that will benefit consumers in the converged world.
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