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December 10, 2009
William T. Lake
Chief, Media Bureau
Federal Communications Commission
445 12th St. SW
Washington, DC 20554
RE: Ex Parte Communication: MB Docket No. 08-82
CSR-7947-Z
Dear Chief Lake:
On November 19, 2009, Public Knowledge submitted a letter to Austin
Schlick, General Counsel of the Federal Communications Commission
addressing the Bureau’s ability to grant the Motion Picture
Association of America, Inc.’s (“MPAA”)
Petition[1]
in the above-mentioned docket.[2] In the letter, Public Knowledge stated that a waiver
by the Bureau would be arbitrary as a matter of law, and that such a
decision would exceed the Bureau’s delegated
authority.[3] The
most recent submission by MPAA does nothing to alter this
analysis.[4]
Furthermore, the information that MPAA proffers as evidence is suspect
and contradicts earlier provided information. Finally, MPAA’s
argument that its Petition would not cause harm is contradicted
by filings by other market participants, as well as those from the
general public.
MPAA’S PROFFERED EVIDENCE IS UNRELATED TO ITS PETITION
There are two related types of evidence that MPAA might put forward in
support of its Petition. First, MPAA could offer evidence that
the remedy of waiver is related to the problem described in the waiver
request. Second, assuming MPAA succeeds in presenting both a problem and
a solution, MPAA could offer evidence that its solution is in the public
interest. MPAA has failed on both counts.
MPAA Is Unable to Produce Consistent or Relevant Evidence in Support of
its Petition
Even with absolute control over the data, MPAA is unable to establish
anything beyond the vaguest assertion that infringement occurs and that
it occurs from any source available, protected or not. Given its control
it is strange that, while confident that “protections are
necessary”[5]
to release films via Video on Demand (“VoD”) before DVD
release, MPAA is unable to determine if releasing a film on VoD prior to
DVD has an impact on the availability of illegal copies.[6]
It is perfectly fine for MPAA to claim that “there is a perfectly
obvious and rational reason why there is no ‘evidence’ today
of massive theft of movies distributed via VOD,”[7] but it is disingenuous to
insist that the absence of such data somehow enhances the credibility of
MPAA’s wavier request. It is made all the more disingenuous when
the reason given for the lack of evidence (that “by the time a
movie is available on VOD today, almost without fail it already has
been stolen”[8] because “[r]elease on DVD is today the first
opportunity for thieves to get access to high-quality copy of a
movie”)[9] is
immediately qualified by the admission that “independent studios
have experimented with releasing their movies earlier [than DVD] on
VOD”[10]
and contradicted in a footnote admitting that MPAA member Warner Brothers
had, in fact, made two movies available via VoD prior to DVD
release.[11]
This inability to produce relevant information is especially suspicious
in light of MPAA’s ability to pinpoint sources of illegal copying
when it suits its own goals. MPAA is able to track the source of illegal
copies from Russia, to Ukraine, to a hotel pay-per-view system in order
to illustrate the nature of online copying networks.[12] However, when it is relevant to
the waiver discussion, MPAA cannot determine whether illegal copies of a
member studio’s film came from the DVD release or the VoD release
some days earlier.[13]
It is additionally noteworthy that, in light of the fact that member
studios are already making films available via VoD prior to DVD
release,[14] MPAA
has been repeatedly forced to admit that it was incorrect when it
insisted in its original Petition that “protections are
necessary to deter unauthorized copying or redistribution” of films
released via VoD “sometime prior to release” on
DVD.[15]
MPAA soon clarified that it meant that Selectable Output Control
(“SOC”) protections are necessary except in the case
of ill-defined “limited trial[s],”[16] or, of course, when
non-member studios release films. MPAA now additionally qualifies that
SOC protection is only needed for VoD release of an MPAA member film
“significantly earlier” than DVD release.[17] It remains unclear to
Public Knowledge when “sometime prior” (not requiring SOC)
becomes “significantly earlier” (thus requiring SOC), if
“significantly earlier” is subject to additional
clarification and redefinition as MPAA finds necessary to sustain its
argument, and why the Commission should view that distinction as
meaningful.
MPAA Has Offered No Evidence Suggesting SOC Addresses Infringement
Concerns or that SOC is in the Public Interest
MPAA’s evidence fails to address two distinct, but related
shortcomings of its Petition. First, nowhere does MPAA explain
how SOC will reduce the flow of illegal copies that originate with MPAA
member studios themselves, well before the films are available to
consumers. Second, MPAA does not even attempt to explain why SOC will be
effective in reducing illegal copies made by consumers in light of the
failure of every previous protection technology MPAA has supported in the
past.
SOC Will Not Prevent Illegal Copies Made By Consumers
MPAA’s filing highlights several sources of online infringement.
Most strikingly, every film released by an MPAA member studio via DVD was
available for unlawful streaming or downloading.[18] This suggests, contrary to numerous
prior assertions by the MPAA,[19] that the DVD encryption scheme is not an effective
bar to illegal copying. There is every reason to think that SOC will
prove similarly ineffective in addressing illegal copying while imposing
significant costs on consumers.
However, DVD encryption schemes have had an impact. Products such as
RealDVD and Kaleidescape, which allow consumers to make legal personal
backups of legally purchased DVDs, have been blocked by courts because
they ran afoul of DVD encryption licensing terms.[20] While DVD encryption has not been
effective in reducing the availability of unlawful digital copies, it has
been remarkable effective in reducing the availability of innovative
consumer products. The record certainly suggests that SOC will be
similarly ineffective at preventing unlawful copying while being
similarly effective in stifling innovation.
In addition to DVDs, at least one film was obtained from a Blu-ray source
(another “secure” video format)[21] and at least one film was
“stolen from a hotel pay-per-view system.”[22] These sources (DVD,
Blu-ray, and pay-per-view) all have one thing in common: they are sources
that have received MPAA’s approval and have supposedly been secured
through private negotiations and technology.[23] In other words, the data presented
demonstrates a single fact: infringement occurs, regardless of the level
of protection on the source.
MPAA’s newest “secure” solution has already been
compromised. MPAA describes “HDMI protected with HDCP” as a
“secure digital output.”[24] However, there are already established
circumvention techniques accessible to users with a wide range of
technical competencies.[25] As content protection only has to be defeated once
for a film to be available to millions, there is no reason to think that
“secure” SOC distribution will be any more effective at
combating piracy than “secure” DVD or “secure”
Blu-ray distribution has been. At the same time, there is every reason to
think that “secure” SOC distribution will be just as
effective at inhibiting innovation as prior “secure” formats.
Despite its own evidence that use of technological protections is
completely ineffective, MPAA suggests that it should be granted the right
to turn off any video connection (including current analog and
digital connections,[26] both of which are currently
“protected”[27]), forcing costly and unnecessary upgrades on
millions so that it can ensure that only their preferred
“protected” connections are available.
SOC Will Not Prevent Illegal Copies Made By Studio Insiders
The smattering of heavily sanitized charts and affidavits provided by the
MPAA and its member studios prove little more than the existence of
online infringement of movies and the ineffectiveness of MPAA’s
attempts at protection.[28] MPAA’s data is woefully inadequate to
support any sort of external verification. The majority of its charts and
graphs provide no actual titles, dates, or other information that would
enable a third party to either verify the data or explore any alternative
explanations for varying levels of measured infringement. Because MPAA
controls the data, they can cherry pick single instances and insist that
the examples are typical. While MPAA claims that what appear to be
increases in downloading are due to the availability of a new copy, the
anonymous and isolated nature of the data prevents anyone from presenting
alternative explanations or verifying the existence of the increase.
What MPAA’s data does make clear is that consumer access to content
is not directly related to illegal copying. As Fox executive Ronald C.
Wheeler’s declaration states, a high quality DVD-sourced digital
copy of an anonymous “heavily-pirated family action adventure
movie” was available online “just 3 ½ weeks following
the theatrical release.”[29] Although it is impossible to determine which film
this actually is from MPAA’s data, it is highly unlikely that this
“family action adventure movie” was available to the general
public on DVD 3 ½ weeks after it was released in theaters.
Similarly, Frederick Huntsberry of Paramount Pictures admits that a
DVD-sourced “near-perfect digital copy” of Star Trek was
available online prior to consumer DVD release.[30]
In the case of the anonymous “family action adventure movie,”
Star Trek, and many others,[31] it was irrelevant how the movie was protected when
it was released to consumers. Illegal copying occurred well before
consumers could access the movies and the source of the copying was
the studio itself. No amount of burdensome digital rights management
protection will prevent copying that occurs well before general public
availability.
MPAA IGNORES HARM TO CONSUMERS
When MPAA’s proposal is evaluated by consumers, they reject it.
Since November 1 over 2,700 consumers have filed comments with the
Commission, the overwhelming majority urging rejection of MPAA’s
Petition. General interest and technology-oriented publications
(with no direct financial stake in the FCC’s decision) including
The Washington Post,[32] Ars Technica,[33] Gizmodo,[34] TechDirt,[35] and
Consumerist,[36] have also examined MPAA’s Petition.
They overwhelmingly conclude that there is nothing pro-consumer about the
MPAA forcing consumers to do less with their television sets and consumer
electronic devices.
MPAA’s assertion that SOC “would have no impact whatsoever on
the ability of existing television sets, Tivos, Slingboxes or any other
consumer product to work in exactly the same fashion that such devices
work today”[37] evidences a misunderstanding of consumer
expectations. For example, consumers purchasing a Slingbox are assured
that it is compatible with “Cable Set-Top Boxes (Comcast, Cox, Time
Warner, Cablevision, etc.)” and “Satellite Receivers
(DIRECTV, DISH, etc.).”[38] Nowhere is this compatibility qualified with
“except some content” or “only with MPAA
permission.”[39] Consumers expect their Slingboxes, as well as
their high definition televisions, not to mention any number of other
consumer products, to work with all of the programming flowing from their
set top boxes. In fact, many audio/visual systems in homes and businesses
rely on a series of switches, receivers, and control devices that utilize
high definition analog signals for a variety of practical and technical
reasons.[40]
Recent filings by MVPDs insisting that consumer concerns can be addressed
by on-screen instructions[41] in fact do nothing to address these concerns.
Informing consumers that their expectations are no longer going to be met
does not mitigate the damage created when expectations are not met in the
first place. When consumers are concerned that their devices will
unexpectedly cease to function in the future, they are understandably
reluctant to invest in consumer electronics. Consumers rationally delayed
their purchase of next generation video disc players while Blu-ray and HD
DVD battled – in the current economic climate it is not rational to
give consumers reason to hesitate in the purchase of consumer
electronics.
MPAA IGNORES HARM TO OTHER MARKET PARTICIPANTS
MPAA’s focus on Public Knowledge – while flattering –
causes it to omit consideration of the spectrum of objections from trade
associations whose members would suffer harm if the Bureau[42] granted the MPAA’s
waiver request.[43] To the extent the Bureau weighs the claims of
commercial harm from MPAA, NCTA, and individual MVPDs, it must give equal
consideration to the economic harms NATO, IFTA, and CEA.
MPAA’s most recent response does nothing to address the concerns of
NATO.[44] NATO
describes the “devastating impact on movie theaters” that
would result from a grant of MPAA’s Petition.[45] Public Knowledge is not
in a position to evaluate the impact of SOC on traditional theater
owners. However, NATO’s concerns make it clear that MPAA is asking
the Bureau to choose winners and losers in the motion picture
distribution industry. The Bureau should not inject itself into a battle
between VoD-based distribution models and theater-based distribution
models merely because MPAA would prefer that the former win over the
latter.
IFTA is similarly skeptical of the wisdom of MPAA’s
Petition.[46] While IFTA members have won over 50% of the
“Best Picture” Academy Awards in the past 30 years and are
undoubtedly sensitive to illegal copying of films, IFTA ultimately views
SOC as harmful to filmmakers, before even considering its impact
on consumers.[47]
IFTA is concerned that MPAA members will use SOC to recapture control
over the initial film distribution window – control they lost years
ago.[48]
CEA also expressed reservations about MPAA’s
Petition.[49] In addition to objections raised by Public
Knowledge, CEA is concerned that the waiver will give the MPAA
unprecedented control over the design, function, and features of lawful
consumer electronics.[50] It will also make consumers concerned that
equipment purchased today will be turned off by content protections
implemented tomorrow.[51]
It should be no surprise that CEA members are unwilling to trust the
judgment of an organization that once warned “the VCR is to the
American film producer and the American public as the Boston strangler is
to the woman home alone”[52] when it reassures CEA and the Bureau that no harm
will come from SOC and that analog outputs spell doom for the industry.
In another docket, IPCO, Inc.’s recent filing shows how seemingly
innocuous rule changes (in the case of IPCO, the waiver of severable
security rules for set top boxes) have the potential to radically alter
sectors of the consumer electronics industry.[53] Fortunately for the MPAA of 2009, the
MPAA of 1982 did not have the ability to destroy the technology that
would eventually become, in the words of MPAA’s latest filing, the
“only” way “that studios are able to earn a profit on a
given movie.”[54] CEA members are rightly worried that consumers,
not to mention the MPAA of 2036, will not be so fortunate if MPAA’s
Petition is granted.
As a general matter, Public Knowledge does not believe that a public
interest finding turns on the impact to industry participants’
bottom line. Rather, this Greek chorus of concern should make clear to
the Bureau that grant of an industry-wide waiver such as this can
reverberate in unexpected ways. The effort of MPAA and its would-be
business partners to minimize the impact of this change does not make it
any less disruptive or problematic.
* * *
In sum, although reasonable people can reach different conclusions about
matters of public policy, Public Knowledge urges the Commission to say
focused on the facts and not to be swayed by statements that distort the
truth about the SOC waiver request. Moreover, Public Knowledge believes
that MPAA failed to persuasively demonstrate that SOC will have any
impact on unlawful copying, or that it provides any consumer benefit
whatsoever. MPAA failed to explain why the concerns of the thousands of
consumers who have called on the Bureau to reject this Petition
should be ignored. MPAA failed to address why the Bureau should dismiss
the harms to others in the motion picture distribution industry simply
because it prefers one distribution method over another. Finally, MPAA
failed to mitigate the harm to the waiver process that would be inflicted
were the Bureau to grant a waiver to existing rules without requiring
evidence in support of that waiver.
When coupled with the tremendous consumer costs that would flow from
breaking tens of millions of consumer devices and undermining long
standing consumer confidence that current and future devices will
continue to function as expected when purchased, these failures presents
the Bureau with no basis to grant MPAA’s request.
Respectfully Submitted,
_______/s/___________
Harold Feld
Jef Pearlman
Michael Weinberg
Public Knowledge
cc: Austin Schlick
[1] See MPAA
Petition for Expedited Special Relief: Waiver of 47 C.F.R.
§76.1903. (“Petition”)
[2] See
Letter from Jef Pearlman, Staff Attorney, Public Knowledge to Austin
Schlick, Office of General Counsel, Federal Communications Commission MB
Docket No. 08-82 (Nov. 19, 2009).
[3] Id.
[4] See
MPAA, Letter to Marlene H. Dortch, Secretary, Federal Communications
Commission, MB Docket No. 08-82 (filed Nov. 23, 2009) (“MPAA
Letter”).
[5] Id. at
3.
[6] Id. at
9, fn. 30.
[7] Id. at
3.
[8] Id.
[9] Id. at
4.
[10] Id.
at 6.
[11] Id.
at 9, fn. 30.
[12] See
id. at 4.
[13] See
id. at 9, fn. 30.
[14] Id.
[15]
Petition at 2-3.
[16] Letter from
Antoinette Cook Bush, Counsel to MPAA, to Marlene H. Dortch, Secretary,
Federal Communications Commission MB Docket No. 08-82 at 5 (Nov. 4,
2009).
[17] See MPAA
Letter at 9.
[19] See e.g.
Comments of the Motion Picture Association of America, Exception to
Prohibition on Circumvention of Copyright Protection Systems for Access
Control Technologies, United States Copyright Office Docket No. RM 2008-8
(Feb. 2, 2009).
[20] See
Realnetworks, Inc. v. DVD Copy Control Ass’n, 641 F.Supp.2d
913 (N.D.Cal., 2009); DVD Copy Control Ass’n, v. Kaleidescape,
Inc., 176 Cal.App.4th 697 (Cal.App. 6 Dist., 2009).
[21] MPAA
Letter at Ex. C at Ex. B.
[22] Id.
at 4.
[23] MPAA
describes pay-per-view distribution, the contents of which are
“routinely” stolen, as “using the most protected means
available today on MVPD platforms.” See id. at 7.
[24] Id.
at 8.
[25] See
HDContentSecurity, http://sites.google.com/site/hdcontentsecurity/.
See also Ryan Block, The Clicker: HDCP’s Shiny Red
Button, Engadget, July 21 2005 available at http://www.engadget.com/2005/07/21/the-clicker-hdcps-shiny-red-button/.
[26] MPAA Reply
Comments, MB Docket No. 08-82 at 7 (July 31, 2008).
[27] See
47 U.S.C. § 76.1902(d), 76.1904(b)(1)(i).
[28] See
MPAA Letter.
[29] Id.
at Ex. C ¶ 4b.
[30] See
id. at Ex. B ¶ 9.
[31] The
availability of 20th Century Fox’s film
Wolverine online weeks before theatrical release this summer is
only one of many examples of illegal copies of films appearing online
well before theatrical release. See Lisa Respers France, In
digital age, can movie priacy be stopped?, CNN.com, May 2, 2009
available at http://www.cnn.com/2009/TECH/05/01/wolverine.movie.piracy/index.html.
[32] See
Rob Pegoraro, Studios could provide new movies later to Netflix and
Redbox, earlier to “protected” digital cable, The
Washington Post, Nov. 12, 2009,
http://voices.washingtonpost.com/fasterforward/2009/11/netflix_viewers_may_wait_longe.html.
[33] See,
e.g. Matthew Lasar, Ars responds to Big Cable: TV networks
nothing like an iPod, Ars Technica, Nov. 18, 2009,
http://arstechnica.com/telecom/news/2009/11/selectable-output-control---more-choices-but-for-who.ars.
[34] See
Danny Allen, MPAA Still Trying to Plug Your Analog Hose with
Selectable Output Control, Gizmodo, Nov. 5, 2009,
http://gizmodo.com/5397818/mpaa-still-trying-to-plug-your-analog-hole-with-selectable-output-control.
[35] See
Mike Masnick, FCC Poised to Let Hollywood Break Your TV and DVR,
TechDirt, Nov. 5, 2009, http://www.techdirt.com/articles/20091105/1051206806.shtml.
[36] See
Chris Walters, MPAA Asks FCC For Control Of Your TV’s Analog
Outputs, Consumerist, Nov. 9, 2009,
http://consumerist.com/2009/11/mpaa-asks-fcc-for-control-of-your-tvs-analog-outputs.html.
[37] MPAA
Letter at 2.
[38] See
Slingbox FAQ, What audio/video devices are compatible with
Slingbox? available at http://www.slingbox.com/go/slingbox-prohd-faq.
[39] See
id. Although Slingbox does state that radio frequency controlled
devices are not currently supported, there is nothing to indicate that
some types of programming are beyond functionality.
[40] See
Letter from Bill Paul, CEO, Neothings Inc. to Marlene H. Dortch,
Secretary, Federal Communications Commission MB Docket No. 08-82 (Dec.
11, 2008). For more information about the reasons these systems rely on
analog signals, see Mr. X-Parté Episode 3: An SOC Interview with
Neothings CEO Bill Paul, Public Knowledge Policy Blog (Nov. 18,
2009) available at http://www.publicknowledge.org/node/2774.
[41] See
Letter from Stacy Fuller, Vice President, Regulatory Affairs, Direct TV
to Marlene H. Dortch, Secretary, Federal Communications Commission MB
Docket No. 08-82 (Nov. 24, 2009).
[42] To the
extent that the Bureau is considering granting this petition, Public
Knowledge continues to assert that it cannot do so without examination by
the full Commission. See Letter from Jef Pearlman, Staff
Attorney, Public Knowledge to Austin Schlick, Office of General Counsel,
Federal Communications Commission MB Docket No. 08-82 (Nov. 19, 2009).
[43] See
e.g. Letter from Todd Halstead, Deputy Director of Government
Affairs, National Association of Theatre Owners, Inc.
(“NATO”) to Marlene H. Dortch, Secretary, Federal
Communications Commission MB Docket No. 08-82 (Nov. 6, 2009); Letter from
Jean M. Prewitt, President & CEO, Independent Film & Television
Alliance (“IFTA”) to Julius Genachowski, Chairman, Federal
Communications Commission MB Docket No. 08-82 (Nov. 10, 2009)
(“IFTA Letter”); and Letter from James W. Hedlund, Vice
President, Regulatory Affairs, Consumer Electronics Association
(“CEA”) to Marlene H. Dortch, Secretary, Federal
Communications Commission MB Docket No. 08-82 (Nov. 25, 2009) (“CEA
Letter”).
[44] NATO filing
[45] Letter from
Todd Halstead, Deputy Director of Government Affairs, NATO to Marlene H.
Dortch, Secretary, Federal Communications Commission MB Docket No. 08-82
(Dec. 2, 2009).
[46] See IFTA
Letter.
[47] Id.
[48] Id.
[49] See CEA
Letter.
[50] See
Letter from Mitchell L. Stoltz, Counsel to CEA, Constantine Cannon LLP to
Marlene H. Dortch, Secretary, Federal Communications Commission MB Docket
No. 08-82 (Oct. 26, 2009).
[51] See
Letter from James Hedlund, Vice President, Regulatory Affairs, CEA to
Marlene H. Dortch, Secretary, Federal Communications Commission MB Docket
No. 08-82 (Dec. 8, 2009).
[52] Home
Recording of Copyrighted Works: Hearing on H.R. 4783, H.R. 4794, H.R.
4808, H.R. 5250, H.R. 5488, and H.R. 5705 Before the Subcommittee on
Courts, Civil Liberties, and the Administration of Justice of the
Committee on the Judiciary, House of Representatives,
97th Cong. (1982) (testimony of Jack Valenti, President,
Motion Picture Association of America, Inc.).
[53] See
Letter from James Meyers, Counsel for IPCO, LLC to Marlene H. Dortch,
Secretary, Federal Communications Commission Mass Media Bureau Proceeding
CSR-8206-Z (Oct. 8, 2009).
[54] See
MPAA Letter at 2.
