TECHNICAL PROGRESS SEEN ON DRM, BUT KEY ISSUES REMAIN

There’s technical progress in digital rights management (DRM) standards-setting process, but that movement has opened door to broader issues such as fair use, said Undersecy. of Commerce-Technology Philip Bond. His comments came Wed. at Commerce Dept. Technology Administration (TA) roundtable on digital content and rights management. ContentGuard CEO Michael Miron said that since last TA DRM roundtable 7 months ago, many technical groups had continued to work on DRM-related standards. Motion Picture Experts Group (MPEG) is expected to unveil near- final standard at end of next year, and European organization is putting together report on DRM standards as well, he said. Miron warned, however, that interoperability was paramount and that various groups pursuing DRM solutions would end up by fragmenting interoperability of devices.

Representatives of content industry continue to press for solutions in form of broadcast flag standard and fix to plug “analog hole.” DRM won’t be effective if analog hole isn’t closed, said Andrew Setos of Fox Entertainment Group. Advanced Television Systems Committee (ATSC) recently voted to adopt standard for broadcast flag, he said, but industry now must agree on how to implement it in actual products. Fox has been talking with CE and IT groups, he said, and believes it has reached consensus on implementation. While consumer groups continue to worry about infringement of their rights, he said, industry groups think they have done everything they can to make implementation flexible. Graham Spencer of Digital Consumer said there was broad agreement on most technological aspects of DRM but there still was way to go in balancing user vs. content owner rights. Success of technical agreements on broadcast flag is contingent on Congress’s ratifying standard and giving FCC authority to enforce it, said Elizabeth Frazee of AOL Time Warner. RIAA Senior Vp-Govt. Relations Mitchell Glazier announced that his organization recently had made overtures to CE and IT communities on pursuing development of audio performance flag.

Technical folks are beginning to have doubts whether technological solution will ensure DRM success, said Gordon Lyon, group leader of NIST Distributed Systems Technologies Group. Lots of technical things can be invented, Lyon said, but they're not worth much if business can’t be made to work with them. Solution may lie, he said, in business models that allow certain “losses” because it’s not worth implementing processes that would prevent them.

On policy side, many questions remain. One is how to craft objective criteria for policy-setting process to prevent small number of players from controlling outcome, said Rhett Dawson, pres., Information Technology Industry Council. Another critical element is “balance,” said Michael Epstein of Philips. It’s difficult not to cause damage with technological tools, he said: “We're on the cusp of a discussion” on how to prevent DRM from doing that. Digital Media Assn. worries that most discussions are taking place on West Coast, keeping some consumer organizations and other groups with fewer resources out of picture, Exec. Dir. Jonathan Potter said. But whether or not all those concerns are resolved, he said, sooner or later companies will have to “pull the trigger” and launch.

Asked what role govt. should play in DRM issues, Listen.com Chmn. Rob Reid said it should guarantee “robust, competitive marketplace.” Potter suggested that govt. should step in when marketplace failure was so severe that “free” wins and content were available only through compulsory licenses as long as someone was willing to pay. Disney Vp-Public Policy Preston Padden said many problems facing DRM implementation wouldn’t be solved without transparency and discipline of govt. regulatory process. But Douglas Comer of Intel opposed notion of govt. mandates. AOL Time Warner’s Frazee suggested that various sectors work on revolving 3 “narrow issues” of broadcast flag, analog hole and peer-to-peer piracy.

Apart from broadcast flag, Miron said, govt. should: (1) Solicit input on other efforts to deal with DRM. (2) Serve as bully pulpit to educate public about concepts of fair use and copyright. (3) Avoid stifling innovation. (4) Ensure that standards-setting efforts don’t run into antitrust or regulatory issues. (5) Hold more dialogs such as TA sessions. (6) Refrain from locking down technology. Govt.’s role is to make sure public is represented at table, Spencer said.

Public was very much in evidence at meeting. Observers sporting buttons reading “DRM Is Theft” packed room, clapping and attempting to enter into discussion. Bond asked them to submit their comments online. Afterward, roundtable co-chmn. Undersecy of Commerce for IP James Rogan said session was valuable because it reminded everyone of “massive demand for resolution” of content protection vs. consumer use issues. If that doesn’t happen, he said, there’s risk govt. will step in and no one will be happy with results.