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Home Entertainment: High-definition Demons

Just as anyone who bought a Betamax videocassette recorder 20 years ago eventually found little to play in it, the roughly 3.5 million owners of high-definition television sets may have scant programming to watch on them. These sets could become obsolete because they are not equipped to receive the heavily copy-protected programming that Hollywood wants to foist on the nation. The movie industry, led by the Motion Picture Association of America (MPAA), wants to impose copyright controls on high-definition television broadcasts that are so draconian, viewers ought to worry about whether they will be able to watch these shows, much less record them.

This copyright battle is a sprawling, many-tentacled monster reaching into every corner of the consumer electronics industry. The debate over the music industry’s decision to sell copy-protected compact discs is just another example. But the dispute has taken its most visible and menacing form in the angry arguments over how to carry high-definition transmissions over cable networks. The controversy has dragged on for years and will become an even more pressing concern as the Federal Communications Commission and Congress, eager to move along the transition to digital TV, push the industries to finally solve the problem. Meanwhile, DTV buyers remain at risk.

Until now, this has been a largely academic concern. Since digital broadcasting began in November 1998, the cable industry has opposed any obligation to carry HDTV because high-definition broadcasts use swaths of bandwidth larger than what cable operators want to give up. But early this year, under prodding from the chairman of the FCC, the nation’s 10 largest cable companies finally agreed

to begin carrying at least five high-definition programs on any of their systems that have upgraded, fiber-optic networks.

And so comes the question: How does one carry these digital, high-definition movies and shows from the digital cable box to the digital television set? The answer from the cable and motion picture industries is to build new DTVs with a special input from a cable box that complies with the cable industry’s “interface license agreement.” That’s a 41-page, single-spaced document that has riled almost everyone who has managed to read it, including some prominent members of Congress. It embodies the fondest hopes and dreams of the copyright zealots from the motion picture industry. The cable industry is willing to go along because cable networks cannot survive without access to Hollywood’s top movies. Unless TV manufacturers agree to sign the agreement, which obligates them to the cable industry’s terms, they are not permitted to include the special input on their new digital sets. Without it, viewers may not be able to watch high-definition cable shows. So far, not one manufacturer has signed.

The provision causing the greatest anguish among manufacturers and lawmakers is the one governing how these new digital cable boxes will work with existing digital television sets. Not long ago this, too, would have seemed like an academic issue because high-definition TVs were selling rather slowly, and a relatively small number of people would have been affected. But now sales are taking off. The Consumer Electronics Association predicts manufacturers will sell more than 4 million HDTVs to dealers by year-end. The number is likely to rise to more than 8 million by the end of 2003.

Not one of these TVs—or probably any that will be sold next year—is equipped with this special digital connector that the cable industry, at the behest of Hollywood, is insisting on. All of these TVs are viewed as “legacy equipment,” to use industry jargon. They have only analog (usually component video) inputs for high-definition programming, or some other incompatible form of digital connection.

The cable contract requires manufacturers to design their sets with these special inputs set up to “constrain the resolution” of high-definition programming that is carried from digital cable boxes to these analog inputs. In other words, by the time the movie reaches the TV screen, it won’t be high-definition anymore. It will look only marginally better than conventional analog TV.

And there’s more. The cable industry wants to be sure that you cannot record copyrighted material and keep it. Some material will be coded so that you cannot record it at all. You would be able to record other shows only once—and only on personal video recorders, such as TiVo or ReplayTV, that have internal hard drives—and hold them for only a short period of time before they are automatically deleted. The contract requires manufacturers who connect their equipment to digital cable boxes to allow the cable company to reach into these video recorders at will to “obliterate the stored content after a stated period of time.” From the cable office downtown, the cable company would also—again, at will—be able to disable a video recorder or similar device in your home if it were recording something it wasn’t supposed to.

This has incensed the TV manufacturing industry, which is why none of the companies has signed the contract. Industry executives are particularly upset about the provision that would require them to constrain the resolution of high-definition shows. This requirement, called “down-resing,” would make all digital televisions sold since 1998 essentially obsolete.

This would “alienate and penalize millions of DTV early adopters” and “is not in the public interest, nor in the interest of any of the industries that seek to benefit from the DTV transition,” said Gary Shapiro, head of the Consumer Electronics Association, in a letter to Congress.

Andrew Levin, minority counsel to the House Energy and Commerce Committee, was on a panel at a digital television summit sponsored by the Consumer Electronics Association in the late spring. He works for Rep. John Dingell, the ranking minority member of the committee, and when the subject of the cable license came up, Levin said the committee had asked cable industry representatives about the various onerous provisions in the license, particularly the down-resing requirement. “The answer we got back,” he said, “was ‘don’t worry about it. We won’t use it.’ But we need to get those things out of there,” he added. “Consumers should have a reasonable expectation that their equipment will continue to work—equipment that will have earned the industry $9 billion by year-end. I can’t even imagine the headaches members of Congress will get if rules are ever put into place that will make these sets obsolete. It’s outrageous. It’s counterproductive to the transition and possibly illegal.”

Sen. Ernest Hollings, a Democrat from South Carolina, introduced a bill in March that gives the parties one year to settle this debate. If it is not settled by then, the bill stipulates that Congress will settle it for them. The bill is still pending but is unlikely to pass before this Congress ends at the end of the year.

The bill would have to be reintroduced in the new Congress next year, but the issue of cable connectivity has been under discussion for more than four years now and there is little assurance that the Hollings bill will ever become law. So do not expect a quick resolution.

Meantime, some congressmen, for obvious political reasons, are insistent that buyers of present-generation digital sets not be left behind. “I can’t think of a more dangerous place to be than to get between a member of Congress and a TV camera—or a consumer and his TV set,” said Rep. Billy Tauzin, the Louisiana Republican who is chairman of the House Committee on Energy and Commerce. The committee has jurisdiction over these issues, and one of his goals, he insisted, is “to make sure consumers are not left with equipment that is made obsolete or inoperable.”

Tauzin vowed to introduce his own bill on these issues in the fall and repeated that promise in late summer.

Valenti has been in this position before. “The growing and dangerous intrusion of this new technology,” he once said, threatens his industry’s “economic vitality and future security.” In fact, he added, the technology “is to the American film producer and the American public what the Boston Strangler is to the woman alone.” He made that remark to the House Judiciary Committee in 1982, and the technology he was so concerned about was the VCR. Now, of course, video-cassette and DVD rentals and sales account for about half of Hollywood’s revenues.

Some in related industries think the MPAA is being just as shortsighted today as it was when it fought the introduction of the VCR, which is not the only precedent to this debate. Almost 100 years ago, the sheet music industry filed suit to shut down the new player piano industry, fearing that the perforated rolls would drive the sheet music publishers out of business. They never stopped to think that player pianos would kindle a new interest in music, just as it never occurred to the MPAA two decades ago that VCRs would increase consumer demand for movies.

Now the same organization obviously does not believe that supersharp, high-definition versions of their products might draw eager viewers back to watch and savor even movies they have already seen, just as DVDs have already done.

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