PK President Gigi B. Sohn testifies before the U.S. House Committee on Energy and Commerce Subcommittee on Telecommunications and the Internet hearing on "The Audio and Video Flags: Can Content Protection and Technological Innovation Coexist?".

Gigi's written testimony is available here (pdf).

Member statements, if available, and testimony of other witnesses is available here: http://energycommerce.house.gov/108/Hearings/06272006hearing1960/hearing.htm

A transcript of Gigi's oral testimony follows:

Mr. Chairman, Ranking Member Markey and members of the subcommittee, my name is Gigi Sohn. Thank you for inviting me to testify today.

We are living in a digital golden age and consumers -- your constituents -- are the beneficiaries. Consumers have numerous choices for buying digital content and for buying devices on which to play that content. They have never had so much flexibility and so much opportunity to become creators themselves.

iPods and other MP3 players provide a fun and convenient way to listen to music, books and podcasts. TiVo, Slingbox, LocationFree TV and yes, iPods, allow you to watch your favorite TV programs and movies when and where you want.

New opportunities for the content industry to profit from these digital technologies and networks arise every day. Sales of DVDs continue to generate enormous revenues. In just five months, iTunes sold 12 million video downloads for use on its video iPod. The broadcast networks, ESPN and Warner Brothers are making for-pay and advertiser-supported content available either through streaming or as downloads over a variety of online platforms. As the content industry has ramped up online delivery of content, it has been testing a variety of protection measures that provide both security for the industry and flexibility for consumers.

So the answer to the question: can content protection and technological innovation co-exist is a resounding yes - look at the robust market for online content distribution facilitated by the technologies and networks consumers love. Apparently, success is not enough for the content industry, which is asking you to interfere with this market and impose two technology mandates that could bring this technological and artistic renaissance to a grinding halt.

The first would reinstate the FCC's vacated broadcast flag rule. Public Knowledge opposes this rule first and foremost because it would give the FCC unprecedented and broad control over technological design. On this point, the D.C. Circuit emphatically agreed. Moreover, the rule would allow the agency to set the limits of consumers' rights under copyright law. It would prohibit lawful uses of content, including use of broadcast TV excerpts online and for distance education. For example: the Parents Television Council, a TV watchdog, makes available clips of the week's best and worst broadcast TV shows on its website. The flag scheme would prevent this way of educating parents about the shows their children watch.

The flag scheme will also cause great consumer inconvenience, confusion and cost, which will slow the transition to digital TV. For example, flag-compliant devices may not work with non-compliant devices, making obsolete millions of legacy machines. Digital media recorded on a flag compliant device may not play on a non-compliant device, meaning that the DVD you burn in one room of the house may not play on a DVD player in a different room. In addition, the TV flag scheme will increase consumer costs because none of the thirteen technologies the FCC has certified work with each other. Therefore, if you have a Philips flag-compliant TV set, a consumer must purchase downstream devices from that same manufacturer. This is profoundly anti-competitive and anti-consumer.

Nevertheless, if Congress decides to impose a TV flag scheme, it must attempt to ensure that consumers' rights under the Copyright Act are preserved. Thus, any broadcast flag legislation must be coupled with legislation that would permit circumvention of technological protection measures for lawful uses. We are grateful that the Chairman of the full Committee, Mr. Barton, has recommended that any broadcast flag legislation also include H.R. 1201, the Digital Media Consumers' Rights Act.

In addition, any TV flag legislation should have meaningful exemptions for news and public affairs programming, distance education and public domain programming. The former is particularly important, as such programming is the public's compensation for permitting broadcasters to use the public airwaves for free.

We have similar concerns about the audio flag, which are discussed in detail in my written statement. Proponents of the audio flag do not even purport to be concerned with so-called "indiscriminate" distribution of songs over the Internet. Instead, they want to extinguish the long-protected consumer right to make personal home recordings of radio transmissions. Moreover, because the audio flag would impose limits on digital broadcast and satellite radio technology that, unlike digital TV, consumers need not adopt, those limits may well kill these fledgling services.

There are far better alternatives to the heavy-handed technology mandates being discussed today. They include a multi-pronged approach of consumer education, enforcement of copyright laws and use of technological tools developed in the marketplace. The Grokster decision and the Family Entertainment and Copyright Act are just two of several new legal tools that the content industry has at its disposal to protect its content.

Members of the subcommittee, the TV and audio flags are controversial and do not reflect consensus. I am confident that you will conclude that the Federal Communications Commission should not become the Federal Computer Commission or the Federal Copyright Commission. And that the marketplace, not the government, is the best arbiter of what technologies succeed or fail. The flag rules place unacceptable limits on innovation, competition and consumer rights. I urge you to reject them. Thank you.