FCC to consider MPAA proposal to lift DVR control ban

A new round of petitioning by movie studios to the FCC has triggered a renewed debate over whether studios and content providers have the right to send signals to consumers' DVRs, disabling their ability to record certain programs.

As a result of public debate that took place in early 2004, the US Federal Communications Commission under then-Chairman Michael Powell adopted a set of rules that prohibited the carriers of digital TV programming from adopting any kind of control over viewers' rights to record those programs, or to reduce the quality of programs they might happen to have the ability or means to record. Now those regulations are under review as the result of a petition from the Motion Picture Association of America, which argues that such controls would be vitally necessary to the existence of the successor service to "premium cable."

FCC rules today -- specifically, Title 47, Section 76.1903 of the Code of Federal Regulations (PDF available here) -- specifically prohibit the use of what are now being called selectable output control (SOC) devices. That paragraph reads as follows: "A covered entity shall not attach or embed data or information with commercial audiovisual content, or otherwise apply to, associate with, or allow such data to persist in or remain associated with such content, so as to prevent its output through any analog or digital output authorized or permitted under license, law or regulation governing such covered product." ("Covered entity" in this case means, a licensed provider of digital programming bound to FCC rules. Recently, the FCC has referred to such entities as multi-channel video programming distributors (MVPD).)

Debate over the rule began in April 2003, with the rule banning SOCs adopted in September. The following month, however, commissioners brought the matter of the ban to public debate, arguing it was necessary for the maintenance of viewers' rights. At that time, the Commission suggested the drafting of a Memorandum of Understanding (MOU) between program distributors and the Commission, in order to get MVPDs on the record as agreeing to the fundamental principles of the prohibition order.

"Bans on both the current use of selectable output control and the down-resolution of broadcast programming will further the DTV transition and ensure that consumer expectations regarding the functionality of their digital cable ready televisions and products are met," reads the October 2003 proposal (PDF available here). "In addition, enacting limits on the amount of copy protection that may be applied to different categories of programming strikes a measured balance between the desire of content providers and MVPDs to prevent the unauthorized redistribution or copying of content distributed by MVPDs and the preservation of consumer expectations regarding the time shifting of programming for home viewing and other permitted uses of such material."

At the time, the FCC was also considering petitions from some CE manufacturers who argued that consumers might not invest in a digital platform if they did not have faith in being able to record any program that came into their home. (This prior to the start of the format war between HD DVD and Blu-ray.) Meanwhile, DirecTV made its support of SOCs a part of the public record, claiming as far back as early 2003 that the ability of MVPDs to competitively bid for the right to air certain content under premium conditions mandates that MVPDs have facilities available to them for restricting viewing ability.

In other words, for instance, should an HBO service want to put together a premium package for a hit film -- say, the latest Indiana Jones release -- it may need to demonstrate to Viacom that it could present the film to a select group of high-paying DirecTV subscribers, rather than to the whole lot of subscribers all in one lump.

Last Thursday, the Commission under Chairman Kevin Martin announced a period of public comment, ending June 25, for responses to the MPAA's petition that this rule be stricken from the books. Central to the Association's argument is the notion that the ability to preclude individuals from recording, or perhaps even viewing, some programs at particular times represents a public service.

As last Thursday's notice reads, "Specifically, MPAA requests that the Commission waive its prohibition on the use of selectable output control...for set-top boxes in order to facilitate partnerships between Petitioners and multi-channel video programming distributors...to provide copy-protected, high definition feature films directly to subscribers prior to the films' prerecorded media release dates. According to MPAA, the new service will benefit the public by expanding the timeliness and quality of consumers' in-home viewing choices while aiding the digital transition by providing more incentives to purchase new high definition televisions. MPAA contends that allowing customers to view high-value, recently released films via unprotected outputs would create an unacceptably high risk of unlawful copying and redistribution. Therefore, the proposed service could be offered only if the SOC prohibition is waived. Further, MPAA argues that the Commission recognized the potential benefits of SOC when it adopted the rule and left open the possibility of waivers that would be 'advantageous to consumers."'

In the most recent draft of their petition dated May 9 and filed last Friday (PDF available here), MPAA members cite certain parts of the 2003 debate where commissioners apparently said they would be willing to revisit the issue should new business models arise. Now, members say such an event is coming:

"Specifically, the Petitioners are interested in exploring opportunities to provide consumers with the ability to order recently released theatrical, high-definition movies directly through their MVPD (the 'Services'). These new Services are exactly the type of 'new business models' that the Commission contemplated when it adopted the encoding rules. While each studio would have its own independent business model developed through private negotiations with existing and potentially new partners, the purpose of this Petition is to remove a general regulatory impediment that prevents implementation of content protection required in the specific case of the Services.

"In order to make this extremely high value content available for general in-home viewing at such an early release window, protections are necessary to ensure it is not exposed to unauthorized copying or redistribution," the MPAA petition continues. "Enabling SOC in this instance will provide the Petitioners with vital protections by allowing their high value content to flow only over secure and protected digital outputs. Absent sufficient protections, the Petitioners' theatrical movies are simply too valuable in this early distribution window to expose them to uninhibited copying or redistribution."

In other words, studios want to create a new window for distributing their own content first through their own exclusive channels (one of the original purposes of the Internet link, as Blu-ray and HD DVD consoles were originally conceived). Such channels would bypass premium services such as HBO and potentially DirecTV, creating a "super-premium" distribution window that postpones those of the independent MVPDs. And if you noticed a thin veil, it's probably there on purpose: Studios are actually suggesting that they may not release their content over existing digital channels at all, rather than risk piracy.

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