Public Knowledge President Gigi B. Sohn testified before the House
Judiciary Committee Subcommittee on Courts, the Internet and
Intellectual Property on November 3rd, 2005.

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Statement of Gigi B. Sohn, President
Public Knowledge

Before the
House Judiciary Committee
Subcommittee on Courts, the Internet and Intellectual Property

Oversight Hearing on
“Content Protection in the Digital Age: The Broadcast Flag,
High-Definition Radio, and the Analog Hole”

Washington, DC
November 3, 2005

Chairman Smith, Ranking Member Berman and other members of the
Subcommittee, my name is Gigi B. Sohn. I am the President of Public
Knowledge, a nonprofit public interest organization that addresses
the public’s stake in the convergence of communications policy and
intellectual property law. I want to thank the Subcommittee for
inviting me to testify on content protection in the digital age, and
to comment on what I hope to be the first of many discussions on
three draft pieces of legislation before the subcommittee, the
Broadcast Flag Authorization Act (BFAA), the HD Radio Content
Protection Act (HDRCPA) and the Analog Content Protection Act
(ACPA).¹

Introduction and Summary

As some of you know, I served as counsel to the nine public interest
and library groups that successfully challenged the Federal
Communications Commission’s (FCC) broadcast flag rules in the United
States Court of Appeals for the District of Columbia Circuit. My
organization financed and coordinated the case, which is titled
American Library Association v. FCC, 406 F.3d 689 (D.C.
Cir. 2005). I respectfully request that a copy of the court’s
decision and a copy of petitioners’ opening brief in the case be
placed into the record of this hearing.

For Public Knowledge, its members and its public interest allies,
the D.C. Circuit’s decision vacating the broadcast flag rules is
about much more than the ability of citizens to make non-infringing
uses of copyrighted material that they receive over free
over-the-air broadcast television. It is about limiting the power of
a government agency that, in the court’s own words, has never
exercised such “sweeping” power over the design of a broad range of
consumer electronics and computer devices.

For the past seventy years, Congress has never given the FCC such
unbounded authority to control technological design. This has
fostered a robust market place for electronic devices that has in
turn made this country the leader in their development and
manufacture. The broadcast flag scheme would put a government agency
in the position of deciding what software and hardware technologies
will come to market and which will fail.

I urge this subcommittee to think very long and hard before granting
the FCC broad power to engage in this kind of industrial policy. Ask
yourselves, is it good policy to turn the Federal Communications
Commission into the Federal Computer Commission or the Federal
Copyright Commission? I am confident that with the opportunity for
public input and serious deliberation and an opportunity for public
input, you will decide that the marketplace, not the government, is
the best arbiter of what technologies succeed or fail, and that
Congress, not the FCC, is the correct arbiter of the proper balance
between content protection and consumer rights.

I similarly urge this subcommittee to weigh the costs to consumers
of proposals to mandate content protection for digital satellite and
broadcast radio and to mandate content protection to close the
analog hole. Efforts to limit what consumers can record over digital
radio technologies suffer from many of the same maladies as the TV
broadcast flag — specifically government control over technology
design. In addition, the proposed radio content protection
legislation permits the FCC extinguishes the long-protected consumer
right, guaranteed by the Audio Home Recording Act, to record
transmissions for personal use. Furthermore, because the draft bill
will impose limits on a new technology — so called HD Radio - that,
unlike digital television, consumers need not adopt, those limits
may well kill this fledgling technology. Why would a consumer buy an
expensive new digital broadcast radio receiver when it would have
less functionality than the current analog receiver?

The broad, sweeping draft legislation to close the analog hole
suffers from the same problem; it puts the government in the role of
making industrial policy, and will severely limit consumers’ ability
to make lawful uses of copyrighted content. Like the broadcast flag,
the legislation mandates a one-size-fits-all technology that has not
been the subject of public or even inter-industry scrutiny. The
prohibitions in the legislation would require redesign of a whole
range of currently legal consumer devices, including DVD recorders,
personal video recorders and camcorders with video inputs.
Importantly, the existence of the analog hole has been touted as a
“safety valve” for making fair use of digital media products where
circumventing the technological locks has been rendered illegal by
the Digital Millennium Copyright Act. Should Congress close that
hole without amending the DMCA to protect fair use, consumers’
rights to access digital copyrighted works will be eroded even
further.

There are better alternatives for protecting digital content than
the heavy-handed technology mandates proposed here today. Those
alternatives are a multi-pronged approach of consumer education,
enforcement of copyright laws and use of technological tools
developed in the marketplace, not mandated by government. The recent
Grokster decision and the passage of the Family Entertainment and
Copyright Act, which you spearheaded, Mr. Chairman, are just two of
several new tools that the content industry has at its disposal to
protect its content.

Any Legislation to Reinstate the Broadcast Flag or Impose Radio Copy
Protection Should be Considered in Regular Order

As a preliminary matter, I would like to address an important
procedural issue. If this subcommittee and the Congress ultimately
decide to legislate with regard to the broadcast flag and digital
radio copy protection, it should do so in regular order, and not as
part of a budget resolution or appropriations bill. These matters
are not germane to the budget and appropriations processes. Indeed,
they are far too important and controversial to be legislated on a
spending bill. If Congress ultimately decides that it must try and
legislate broadcast flag and radio content protection mandates, it
should do so only after considerable debate and public input.

There is considerable evidence the public is greatly concerned with
the government’s efforts to mandate digital television and radio
content protection for digital devices. Over 5000 individual
consumer comments were filed in opposition to the flag at the FCC —
where so many consumer comments are rare — and tens of thousands of
citizens have contacted their Congressional representatives over the
past 6 months (since the D.C. Circuit’s decision) urging that the TV
flag not be reinstated. Clearly, this is an issue that deserves a
full and fair hearing, and not to be simply attached to a spending
bill.²

An FCC-imposed Broadcast Flag Scheme and/or Radio Content Protection
Scheme Will Transform the Federal Communications Commission into the
Federal Copyright Commission

Despite the FCC’s protestations to the contrary, the broadcast flag
scheme and any radio copy protection scheme will necessarily involve
the agency in shaping copyright law and the rights of content owners
and consumers there under. Making copyright law and policy is not
the FCC’s job. It is Congress’ job. Petitioners brief in ALA v.
FCC, at 43-50, lays out this argument in great detail.

While it is true that the TV broadcast flag scheme does not
completely bar a consumer from making a copy of her favorite TV
show, it does prevent consumers from engaging in other lawful
activities under copyright law. For example, as the D.C. Circuit
noted in ALA v. FCC, the broadcast flag would limit the
ability of libraries and other educators to use broadcast clips for
distance learning via the Internet that is permitted pursuant to the
TEACH Act, Pub. L. No. 107-273, 116 Stat. 1758, Title III, Subtitle
C, S13301, amending 17 U.S.C. SS 110, 112 & 882 (2002). See
ALA v. FCC, 406 F.2d at 697.

This and other examples highlight that while proponents of the flag
may justify it as prohibiting only “indiscriminate” redistribution
of content over the Internet, it actually prohibits any and all
distribution, no matter how limited or legal. For example, if a
member of this subcommittee wants to email a snippet of his
appearance on the national TV news to his home office, the broadcast
flag scheme would prohibit him from doing so. Video bloggers would
similarly be unable to post broadcast TV clips on their blogs.
Imagine how much different the debate around broadcast decency would
have been had bloggers and others not been able to post a clip of
the now-infamous Janet Jackson Superbowl halftime performance?

The fact that the broadcast flag will limit lawful uses of
copyrighted content was detailed in the Congressional Research
Service Report entitled Copy Protection of Digital Television:
The Broadcast Flag (May 11, 2005). CRS concluded there that

While the broadcast flag is intended to “prevent the
indiscriminate redistribution of [digital broadcast] content over
the Internet or through similar means,” the goal of the flag was
not to impede a consumer’s ability to copy or use content lawfully
in the home, nor was the policy intended to “foreclose use of the
Internet to send digital broadcast content where it can be
adequately protected from indiscriminate redistribution.” However,
current technological limitations have the potential to hinder
some activities which might normally be considered “fair use”
under existing copyright law. For example, a consumer who wished
to record a program to watch at a later time, or at a different
location (time-shifting, and space-shifting, respectively), might
be prevented when otherwise approved technologies do not allow for
such activities, or do not integrate well with one another, or
with older, “legacy” devices. In addition, future fair or
reasonable uses may be precluded by these limitations. For
example, a student would be unable to email herself a copy of a
project with digital video content because no current secure
system exists for email transmission.

CRS Report at 5.³

Thus, it strains credulity to say, as the FCC has, that the
broadcast flag scheme does not put the agency in the position of
determining copyright owners and consumers’ rights under copyright
law. It is Congress’ duty, not the FCC’s, to find the proper balance
of those rights.

The regulatory scheme proposed under the HDRCPA similarly, and
perhaps even more directly, places the FCC in the position of
determining consumers’ rights under copyright law. Section 101(a) of
the draft bill gives the FCC the authority to

control the unauthorized copying and redistribution of digital
audio content by or over digital reception devices, related
equipment, and digital networks, including regulations governing
permissible copying and redistribution of such audio content.

Under this proposal, the FCC is placed in charge both of 1)
determining the extent to which unauthorized copying (which is legal
is some circumstances) of digital broadcast and satellite radio
content is permitted; and 2) determining what kind of copying and
redistribution of audio content is permissible. If this language is
not giving the FCC power to set copyright policy, then it is hard to
imagine what language would do so.

The Broadcast Flag and Radio Content Protection Schemes Would Give
the FCC Unprecedented Control over a Wide Variety of Consumer
Electronics and Computer Devices

The BFAA has been referred to by some as “narrow,” because it
purports to do nothing more than reinstate the FCC rule vacated by
the D.C. Circuit in ALA v. FCC. However, for the reasons
discussed below, the FCC rule is anything but narrow.

As the D.C. Circuit recognized in ALA v. FCC, the broadcast
flag gave the agency unprecedented “sweeping” authority over
consumer electronics and computer devices. In a nutshell, it puts
the FCC in the position of deciding the ultimate fate of every
single device that can demodulate a television signal. Thus, not
only must television sets be pre-approved by the FCC, the agency
must also pre-approve computer software, digital video recorders,
cellphones, game consoles and even iPods if they can receive a
digital television signal. Thus, the broadcast flag scheme places
the FCC in the position of dictating the marketplace for all kinds
of electronics.

The agency has neither the resources nor the expertise to engage in
this kind of determination. This type of government oversight of
technology design will slow the rollout of new technologies and
seriously compromise US companies’ competitiveness in the
electronics marketplace.

Some would argue that the initial certification process worked
because all thirteen technologies submitted to the FCC were
approved. However, that is a very superficial view of that process.
First, it is widely known that several manufacturers removed legal
and consumer-friendly features of their devices before submitting
them to the FCC, largely at the behest of the movie studios. Second,
the changing nature of the FCC and its commissioners is likely to
make for widely varying results. Given the fervor of then-
Commissioner Martin’s dissent to the Commission’s approval of
TiVo-To-Go, it is unlikely that such technology would be certified
today under Chairman Martin’s FCC.⁴

The HDRCPA would similarly place the FCC in the position of
mandating the design of new technologies. The plain language of the
draft bill gives the FCC the authority to adopt regulations
governing all “digital audio receiving devices.” In the case of
so-called High Definition (or HD) Radio⁵
this could have the unintended consequence of destroying this new
technology at birth. Digital broadcast radio benefits consumers
through improved sound quality (particularly for AM radio) and the
ability for radio broadcasters to provide additional program streams
and metadata. Unlike digital television, however, consumers need not
purchase digital broadcast receivers to continue receiving free over
the air broadcast radio. Certainly, if digital radio receivers have
less functionality than current analog radio receivers, consumers
will reject them and the market for HD radio will die. Moreover,
because the HDRCPA also applies to digital satellite radio, it has
the potential to cripple this increasingly popular, but still
nascent, technology.

Legislation to Close the Analog Hole is Premature, Unnecessary and
Would Further Tip the Copyright Balance Against Consumers

The Analog Content Protection Act is a detailed and extremely
complicated technology mandate that deserves further consideration
by my organization.

Preliminarily, I would note that this is the first time in the
recent discussion over digital content protection that CGMS-A + VEIL
technology have been proposed. While the CGMS-A + VEIL technology
was discussed at the Analog Hole Reconversion Discussion Group, it
was quickly dismissed as not worthy of further consideration. Thus,
unlike the broadcast flag, this technology has not been fully vetted
by industry and public interest groups.

Accordingly, we are quite surprised that CGMS-A + VEIL is being
presented today as a fully formed, mature proposal to Congress. If
Congress feels it must do something about the analog hole, it should
refer the technology back to industry and public interest groups so
CGMS-A+VEIL can be thoroughly analyzed for its impact on consumers
and the cost to technology companies. In the complete absence of any
such review, the one-sided imposition of such a detailed technology
mandated would be unprecedented.

Based on a preliminary analysis of the ACPA, I would like to make
the following brief substantive points:

• The ACPA would impose an inflexible, one size fits all
  technology mandate that is more intrusive than the broadcast
  flag: The ACPA mandates that each and every device with an
  analog connection obey not one, but two copy protection schemes.
  Thus, while the broadcast flag would put the FCC in charge of
  design control just for technologies that demodulate a broadcast
  signal, the ACPA would mandate design for every device
  with an analog connector, including printers, cellphones,
  camcorders, etc. Like the broadcast flag, it sets in stone a copy
  protection technology for technologies that are always changing.
• The ACPA would impose a detailed set of encoding rules that
  would restrict certain lawful uses of content. The proposal’s
  tiered levels of restriction based on the type of programming
  (e.g., pay-per-view, video on demand) limit lawful uses
  in a manner that ignores the four fair use factors of 17 U.S.C.
  S107. Thus, the draft legislation upsets the balance established
  in copyright law between the needs of copyright holders and the
  rights of the public by placing far too much control over lawful
  uses in the hands of the content producers.
• Would eliminate the DMCA’s safety valve. One of the
  common justifications for limitations on fair use imposed by the
  anti-circumvention provisions of the DMCA is that the analog hole
  is available for individuals who, for example want to make a
  snippet of a DVD using a video camera held up to the TV
  screen.⁶ The ACPA would eliminate
  that safety valve.
• The exception for legacy devices renders the ACPA
  ineffective. The ACPA exempts from its grasp the millions of
  legacy devices with analog connectors. It is unlikely that any
  action to try to close the analog hole will be effective. There
  are millions of video recording devices in homes that will operate
  for years and not be covered by this act. At the same time, the
  ACPA will discourage sales of new products because consumers will
  realize that the newer technologies will have less functionality
  than older technologies.
• Must be considered in the context of broadcast flag
  legislation. Without broadcast flag legislation, the ACPA
  would be an ill-considered technology mandate that will increase
  costs and limit consumer rights; together with a broadcast flag
  mandate, the ACPA would allow nearly complete control over what
  consumers may do with content they have purchased or otherwise
  received legally.

Copyright Law and Marketplace Initiatives are Better Vehicles for
Finding the Proper Balance Between Content Protection and Consumer
Rights than are Government-imposed Technological Mandates

I am often asked the following question: if Public Knowledge opposes
the broadcast flag, radio content protection and closing the analog
hole, what are better alternatives to protect digital television and
radio content from infringing uses? The best approach to protecting
rights holders’ interests is a multi-pronged approach: by better
educating the public, using the legal tools that the content
industry already has at its disposal, and the technological tools
that are being developed and tested in the marketplace every day. In
the past year alone, the content industry has used and won several
important new tools to protect content, including:

• The Supreme Court’s decision in MGM v. Grokster and its
  aftermath. The Supreme Court gave content owners a powerful
  tool against infringement when it held that manufacturers and
  distributors of technologies that are used to infringe could be
  held liable for that infringement if they actively encourage
  illegal activity. The result has been that a number of commercial
  P2P distributors have gone out of business, moved out of the U.S.,
  or sold their assets to copyright holders.
• Lawsuits against mass infringers using P2P networks. Both
  the RIAA and the MPAA continue to sue individuals who are engaged
  in massive infringement over peer-to-peer (P2P) networks. By their
  own admission, these lawsuits have had both a deterrent and
  educative effect.
• Passage of the Family Entertainment and Copyright Act.
  The FECA gave copyright holders a new cause of action to help
  limit leaks of pre-release works and made explicit the illegality
  of bringing a camcorder into a movie theatre. It also provided for
  the appointment of an intellectual property “czar” to better
  enforce copyright laws.
• Agreements by ISPs to pass on warning notices. It is
  apparent that the war between Internet Service Providers and
  content companies has begun to cool. Last month, Verizon and
  Disney entered into an agreement by which Verizon will warn
  alleged copyright infringers using its networks, but will not give
  up their personal information to Disney.
• Increased use of copy protection and other digital rights
  management tools in the marketplace. There are numerous
  instances of the use of digital rights management tools in the
  marketplace. iTunes Fairplay DRM is perhaps the most well known,
  but other services that use DRM include MSN music and video,
  Napster, Yahoo Music, Wal-mart, Movielink, CinemaNow and
  MovieFlix. The success of some of these business models are a
  testament to the fact that if content companies make their
  catalogues available in an easily accessible manner, with
  flexibility and at a reasonable price, those models will succeed
  in the marketplace, without government intervention.

These tools are in addition to the strict penalties of current
copyright law, including the DMCA. To the extent that the content
industries are looking for a “speed bump” to keep “honest people
honest,” I would contend that many such speed bumps already exist,
while more are being developed every day without government
technology mandates.

Finally, by far the most effective means of preventing piracy is for
the content industry to do what it took the music far too long to
do⁷ - satisfy market demand for
easy access to content at reasonable prices (which a free market
will inevitably produce) that consumers can enjoy fairly and
flexibly. DVDs are the best example of the market working. There, a
government mandate -the Digital Video Recording Act - was rejected
and an industry-agreed upon fairly weak “keep honest people honest”
protection system was adopted. Despite the fact that the protection
system was defeated long ago, the DVD market has grown at an
astounding rate - from zero in 1997 to $25,000,000,000 in sales and
rentals last year. As I noted above, new music and movie digital
download services are just now emerging in the market. We sincerely
believe these efforts, if supported vigorously by the content
industry, along with industry-agreed upon protection, will make
government intervention in the free market unnecessary.

Conclusion

The draft bills presented here today reflect a vision of the future
where government places itself squarely in the middle of
technological design, and where consumers rights to make lawful uses
of copyrighted content are determined by a government agency that is
tasked with regulating our nation’s communications system. That
vision is antithetical to the largely successful and generally
balanced system we have now, where the marketplace is the driver of
technological innovation, and copyright law, developed by Congress,
governs consumers’ rights. Because this vision of the future so
radically departs from the present, I urge this subcommittee to
proceed slowly, with great deliberation and with input from the
public given great weight.

I want to again thank Chairman Smith, Ranking Member Berman and the
other members of the Subcommittee for holding this hearing to
discuss how to balance digital content protection with consumer
rights to make lawful uses of copyrighted works. I look forward to
answering any questions you may have.

1. I would like to thank Neil Chilson, Public
Knowledge’s legal intern, Heidi Wachs, Public Knowledge’s legal
fellow, and Fred Von Lohmann and Seth Schoen of the Electronic
Frontier Foundation for their assistance with this testimony.

2. Moreover, Public Knowledge believes that
any debate about technological mandates of the kind proposed here
would be incomplete without a thorough consideration of how these
mandates, together with the anticircumvention provisions of the
DMCA, place limits on consumer rights and technological
innovation. It has been suggested that H.R. 1201, “The Digital
Media Consumers Rights Act” as introduced in the House Committee
on Energy and Commerce, may provide a proper balance to the legal
limitations imposed on consumers and innovators. Clearly this is a
debate that deserves full public attention.

3. The equipment incompatibility problems
caused by the broadcast flag scheme are myriad, and should be
taken into account by this subcommittee as it considers the BFAA.
In addition to the compatibility problems discussed in the CRS
report (e.g., the inability to make copies on one system
and play it on another), for example, none of the 13 different
technologies approved by the FCC in its interim certification
process are able to work with each other. This means that a
consumer who buys one Philips brand flag-compliant device must buy
all Philips brand flag compliant devices. This raises
consumer costs, and also raises serious questions about
competition among and between digital device manufacturers. For a
detailed discussion of these issues, see
http://www.publicknowledge.org/content/presentations/bflagpff.ppt

4. For a detailed analysis of the flaws of
the FCC’s certifications process, see Center for
Democracy and Technology, Lessons of the FCC Broadcast Flag
Process (2005), found at http://cdt.org/copyright/20050919flaglessons.pdf

5. I say “so called,” because calling a
digital radio broadcast signal “High Definition” is quite
misleading. Whereas in the television context, High Definition
connotes a far clearer and sharper picture, an HD radio signal
simply raises the quality of AM radio to FM standards, and permits
the reception of broadcast radio in places where an analog signal
would get cut off, such as in a tunnel or at a traffic light.
Indeed, an “HD” quality signal is not even a CD quality signal.
See, Ken Kessler, Digital Radio Sucks, it’s Official,
found at http://www.stereophile.com/newsletters/.

6. See Testimony of Dean Marks, Senior
Counsel Intellectual Property, Time Warner, Inc., and Steve
Metalitz, Representing Content Industry Joint Commenters, before
the Copyright Office in Rulemaking Hearing: Exemptions From
Prohibitions On Circumvention Of Technological Measures That
Control Access To Copyrighted Works, May 13, 2003 at 60-61: “I
think the best example I can give is the demonstration that Mr.
Attaway [MPAA Executive Vice President for Government Relations
and Washington General Counsel] gave for you [Marybeth Peters,
Registrar of Copyrights] earlier this month in Washington in which
he demonstrated that he used a digital camcorder viewing the
screen on which a DVD was playing to make a excerpt from a DVD
film and have a digital copy that could then be used for all the
fair use purposes….” (Mr. Metaliz at 60.) “I agree with everything
Steve has just said about fair use copying or taking clips … with
digital camcorders and analog camcorders being widely available …”
(Mr. Marks at 61.)

7. See Keynote Address of Edgar Bronfman,
Chairman and CEO of Warner Music at
http://www.tvworldwide.com/events/pff/050821/agenda.htm. “The
Music Industry, like almost every industry faced with massive and
rapid transformation first reacted too slowly and moderately,
inhibited by an instinctive and reflexive reaction to protect our
current business and business models.”