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Ensuring Content Protection in the Digital Age
Subcommittee on Telecommunications and the Internet
Mr. Larry Blanford
Executive Summary Philips Consumer Electronics
has a long and proud history in the creation and development of consumer
electronics products and technologies. We commend the Chairman for holding this important hearing at
such a critical juncture of the transition to the digital age.
Philips was a central figure in the development of the ATSC DTV standard,
as a member of the Grand Alliance, and continues to invest heavily of time and
resources to address the remaining implementation issues for digital television.
Copy protection in this digital age is complex, and much work remains to
find solutions that balance the rights of the content holder and the consumer. Philips testifies today with
the issuance of a serious caution to the Congress that the most recent direction
from the Broadcast Protection Discussion Group to prevent Internet
retransmission of digital terrestrial broadcasts is not in the interest of sound
public policy, is not in the best interest of the affected industries, and
certainly is not in the interest of the consumer.
Because this proposal would require encryption in the home of free
over-the-air digital television broadcasts, and because this proposal would
place in the hands of a few companies control of all consumer electronics
devices through private, contractual licensing arrangements, Philips believes
that the current direction is seriously flawed.
Regrettably, in its effort to
address Internet retransmission, BPDG has been taken over by a small group of
companies that are pressing a particular approach that would affect ALL
retransmission of content inside the home.
This proposal tramples upon the fair use rights of the consumer and
introduces unnecessary levels of complexity and costs in consumer devices. Today, Philips calls upon the
Congress to reassert itself in this important area by providing a forum for
continuation of these discussions-a forum consistent with the nature of this
public-private relationship to develop sound public policy and technology
solutions. Also today, Philips
pledges its full, continued support and further pledges to do its part to make
technological solutions available on open, fair and reasonable terms to all
interested parties. We look forward
to this Committee's continued leadership in this critical arena.
TESTIMONY
Mr. Chairman and Members of the Subcommittee, my name is Larry Blanford.
I am President and Chief Executive Officer of Philips Consumer
Electronics Company, a division of Philips Electronics North America
Corporation, which is the US subsidiary of Philips Electronics of the
Netherlands. In the United States,
Philips employs over 35,000 people manufacturing and selling over $10 Billion
dollars of goods and services in the areas of consumer electronics, lighting,
medical systems and devices, semiconductors, displays and domestic appliances.
I thank you for the
opportunity to appear before you today and commend you for conducting this
hearing entitled, Ensuring Content Protection in the Digital Age at such
an important juncture in the transition to that new age.
Your attention to the Digital Television (DTV) transition and to the
complex set of issues that remain to be addressed is vital to the ultimate
success of that transition. You rightfully focus today on a key challenge--resolving copy
protection and digital rights management in a way that is consistent with public
policy goals of protecting content, allowing technology to thrive and, most
importantly, preserving the fair use rights and expectations of the consumer in
this new digital age. The manner in
which we proceed will dictate the measure of success we attain.
The combined efforts of the
public and private sectors have come a long way toward ushering in this new
digital age, but I come before you today to raise a caution-that the current
direction embodied in the on-going Broadcast Protection Discussion Group
addressing ways to prevent Internet Retransmission of digital television
broadcasts is not in the interest of sound public policy, is not in the best
interest of the affected industries and is certainly not in the interest of the
consumer. Mr. Chairman,
Philips raised its concerns in the most recent DTV Roundtable Discussion on
April 9. We are here today because
we feel it is very important to bring to your attention the fact that the chorus
you will hear today, as Senators Leahy and Hatch heard at their hearing only
weeks ago, that a solution to the problem of Internet redistribution is imminent
misrepresents the current state of affairs and the nature of the challenge that
still lies ahead. Philips, as much as any
company in the US wants to see this transition to the digital age, and more
specifically this transition to digital television, move as swiftly as possible.
But we also know from decades of involvement in the consumer electronics
industry that we must get this right, meaning that we cannot rush to judgment on
technological solutions that are not widely accepted as the best solution for
all parties involved-the CE industry, the Information Technology industry, the
Content Community and, of course, the consumer. Philips
calls upon the Congress today to reassert its role in this critical
public-private partnership by providing an appropriate, public forum to continue
these industry discussions and to foster workable solutions on a timely basis. Further, today we offer to provide our complete support to
such an effort, including offering related Philips technologies to all comers,
under open, fair and easily available terms.
Philips has an extensive technology portfolio, which we believe can
contribute to the development of solutions every bit as robust and effective as
those embodied in the current, BPDG direction.
Philips has long
history in development of consumer electronics products and technologies Philips is no stranger to the
world of inventing and developing products and technologies in the area of
consumer electronics. From the
Compact Cassette to the Compact Disc to the one chip TV, Philips has invented
and developed products that have enjoyed widespread acceptance in the industry
and among consumers. The Compact
Disc is the most widely implemented digital technology on the face of the earth.
Open, public standards helped make this so, open, public standards should
help us select new copy protection schemes.
Our untiring commitment to the development and implementation of advanced
television in the United States began in our research labs in Briarcliff Manor,
New York in 1981. With decades of
financial investment and enormous scientific effort, we worked to help create
and commercialize Digital Television. Philips
is extremely proud to have been instrumental in the development of Digital HDTV,
beginning with its own system, later as a member of the Advanced Television
Research Consortium, and finally as a founding member of the "Grand
Alliance," which produced the DTV standard adopted by the FCC in 1996.
This unprecedented standards setting process involved numerous private
companies from each affected industry but just as importantly involved an
extraordinary public-private collaboration fostered by the Congress and the
Federal Communications Commission embodied in the Advisory Committee for
Advanced Television Services (ACATS) chaired by Mr. Richard Wiley.
The positive result has propelled the United States into an historic
transition to advanced digital television and related services.
Philips has been an
active participant in the development of Copy Protection Technologies and
Adheres to Basic Principles to Protect the Consumer
The implementation phase has certainly
presented its challenges, not the least of which has been the development of
copy protection technologies. Philips
has long developed solutions along with the content community that struck the
proper balance between the interests of the copyright holder and the consumer.
Philips invented, and offered to the consumer electronics industry for
free, the Serial Copy Management System, which simply provided the necessary
instruction to the recording device as to whether a copy was or was not allowed.
We continue to be equally involved and committed to seeking solutions
that strike the proper balance. Philips
has for years been a constructive participant in inter-industry copy protection
activities. We have dedicated
millions of dollars and thousands of hours of effort from our best engineers to
groups such as the Copy Protection Technical Working Group (CPTWG), the Secure
Digital Music Initiative (SDMI), and the Broadcast Protection Discussion Group (BPDG).
Drawing on our expertise in digital video we were the lead developer of
one of the two watermark technologies being considered for the protection of
digital video content. Philips
created and offered to the record labels an innovative technology to work with
watermarks to address Internet file sharing of sound recordings.
We have suggested several approaches to the BPDG.
As these contributions suggest,
Philips develops new products and technologies with the interest of the
consumers' rights and expectations at top of mind:
Consumers should not bear the
costs, in dollar terms and in terms of technological complexity, when there are
much simpler solutions to the agreed upon problem-the prospect of Internet
redistribution of digital terrestrial broadcasts. Philips Supports the
Goal of Preventing Internet Retransmission of Digital Terrestrial Broadcasts,
But Believes the BPDG Process Is Actually Retarding Industry
Efforts To Move Forward We fully support the goal of
BPDG to protect against retransmission of digital television over the Internet
and the concept of a flag in the ATSC signal to achieve this end.
We also appreciate the progress made by that group, including the general
agreement that a flag in the ATSC signal can be used to trigger protection, the
idea of starting protection upon demodulation, and many of the other details
that have been advanced. However,
we, along with a growing number of participants, are deeply concerned about the
direction that the group is taking with respect to what happens AFTER the
broadcast flag is identified, and how DTV would be constrained inside the home.
This issue of protecting broadcast content is a complex one that merits
careful consideration and the evaluation of a variety of alternatives.
Regrettably, in this effort
to address Internet retransmission, BPDG has been taken over by a small group of
companies that are pressing a particular approach that would affect ALL
retransmission of content inside the home.
This proposal tramples upon the fair use rights of the consumer and
introduces unnecessary levels of complexity and costs in consumer devices. Under the approach proposed
by one Studio and a consortium of hardware companies called the 5C, digital
television content would need to be "protected" once demodulated.
The technologies that could be used for this protection, which are
generally conceived to be encryption technologies, would be under the control of
the studios and private consortia, such as the 5C.
For example, the technologies that the studios wish to use as a benchmark
for the protection are the encryption technologies licensed by the 5C entity
(which encrypts content on digital links) and the related 4C entity (which
encrypts content on removable recording media).
Any party interested in designing and manufacturing devices using these
technologies to encrypt digital television programs would be required to sign up
to a Byzantine set of complex, over-reaching contracts for these proprietary
technologies. These contracts
include obligations called Compliance Rules and Robustness Rules that extend
deeply into the design and functionality of each device and dictate what actions
the devices may take. These
Compliance Rules and Robustness Rules are in the control of the studios and the
private consortia and will be created in the first instance, and may be changed
in the future, wholly in their discretion.
The public, consumers, licensees, and public officials are,
unfortunately, not a part of this process.
In short, private interests are taking control of consumer rights and as
a result establishing public policy! A
small number of our competitors and the studios are put in control of the
functionality of our products! This result is possible
because of the licensing construction built around the use of these
technological solutions. Moreover,
the technology licenses agreements and associated Rules include obligations that
extend far beyond that which is necessary and appropriate to prevent the
Internet retransmission of DTV. Even if it were appropriate
to cede public policy to private interests, the implementation of this most
recent proposal is rife with unintended consequences for products and for the
consumer. The obligation to include
multiple encryption technologies in each device that handles DTV content will
burden consumer devices, increase their cost and decrease their legitimate
functionality. Further, the 35+ million DVD
players in the market today are unable to decrypt any discs recorded in the home
using any proposed encryption system. If
future DVD recorders are obligated to encrypt recordings of television
broadcasts from digital sources, any such recordings made on those recorders
will not be useable on any existing DVD player or on any DVD player likely to be
shipped in the near future. Consumers
should not be required to purchase a new set of devices or to make digital
recordings of content of digital content through old fashioned analog interfaces
simply to do what consumes have always done in their homes. To leave matters in
this state is to deny the consumer the benefits of digital technology.
Digital technology's primary advantage is to move and copy data without
any qualitative loss. Where this is appropriate (such as in a consumers home) it
is reasonable that the consumer not only retain the ability to watch broadcast
content at a convenient time or to move content from one room to another but
also to gain additional flexibility to utilize content. To do otherwise is to
restrain technology solely for the benefit of the copyright holder as a
mechanism to subdivide content into smaller units, each of which can be sold at
a premium price. The current proposal also
would inhibit innovation in television products. Under the proposal, any innovative company interested in
developing and marketing new products that would give consumers more control
over how and when they view television would be required to sign these
over-reaching, burdensome licenses for the "approved" proprietary encryption
technologies, pay the applicable license fees, and bear the costs of including
encryption and decryption capabilities in their products.
The complexity and cost of these licenses and the technologies alone will
inhibit start-up companies, which are often the most innovative. The BPDG is not a
consensus body and is certainly not a standards body. Philips has lost all
confidence that the BPDG discussion group as currently constituted can achieve
meaningful results, or that it will allow for serious consideration or adoption
of technology solutions of equal merit presented by other interested parties.
BPDG is not an open, consensus standards setting process.
BPDG has no process for making decisions.
In fact, the studios and 5C have made clear their view that there need be
no process, because BPDG is not a standards body; it simply is a forum for
discussion and the identification of points of agreement and disagreement.
Such discussions may have their place, but on this matter of such
critical importance to the establishment of good public policy, this approach is
seriously lacking. We respectfully believe that
the decisions of how DTV content broadcast over the public airwaves will be
handled in the home and how it will be available to consumers raise important
public policy issues; issues that are far too important to leave to any group of
private companies no matter how well intentioned.
Private industry should be given a chance to reach a consensus, but the
process should be cleansed by the sunlight of government.
Further discussion should be held in an open forum, with the involvement
of those who are entrusted with the development of public policy. Philips believes the Congress
should make clear that there will be no toleration of a system in which the
private interests control the Rules for copy protection technologies that become
de facto standards. The
rules and licenses under which such technologies are used raise key public
policy issues and must be subject to minimum standards of openness,
reasonableness, scope and consensus. We
have ideas for appropriate technologies that we are prepared to share with the
industry in exactly this manner, as we have attempted in the past. Philips, therefore, calls upon the Congress to reassert itself in this ongoing endeavor by providing under its auspices or the auspices of the Federal Communications Commission, or a suitable standards body an organized, open and fair venue to oversee the continuation of efforts to develop and implement next generations of copy protection technology. In support of such a change, Philips pledges its full, continued support and further pledges to do its part to make technological solutions available on open, fair and reasonable terms to all interested parties. We look forward to this Committee's continued leadership in this critical arena.
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