Prisoners of digital television: A misadventure in high-tech regulatory policy—and a harry Potter fix

Reason, April, 2003 by Mike Godwin

IN Harry Potter and the Prisoner of Azkaban, the young student wizard Harry Potter is pursued by a horde of creatures called Dementors. To make a long, well-plotted story far too short, a future version of Harry suddenly appears and waves his magic wand, reciting the spell "Expecto Petronum!" Thus Future Harry manages to scare away the Dementors, protecting the Harry of the present.

The transition from analog broadcast television to digital broadcast television (DTV), now an enshrined part of American broadcasting policy, faces its own set of Dementors--a horde of technical, legal, economic, and social problems. Taken together, the problems look as unbeatable as any monster. Making things worse, many factions with a stake in the outcome are at war over such issues as technology mandates, copyright protection, and fair use.

But what if we could somehow look back from the future to today's troubled present debate, wave our wands, and magically defeat the problems that bedevil the DTV transition? Such magic is beyond us mere muggles (as Harry's fellow wizards disparage non-magical humans). But it is possible to look back from the future we have long been imagining--one in which various consumer electronics and information technologies have converged, and in which the broadband Internet reaches every home. From there, we can come up with our own version of a magical solution.

It's fair to ask why we even need a solution, other than letting our DTV industrial policy collapse under the weight of its own mistakes. The short answer is this:There's much more than digital television at stake. Bad government actions in this sphere--and you can be sure that Congress and the Federal Communications Commission will act rather than refrain from acting--could permanently shoehorn part or all of the computer revolution under government-driven design control. Not only would this likely kill the dynamism of the information-technology sector, but it is unlikely to do much to protect copyright interests. Worse, by slowing technical innovation, the Hollywood studios may end up shooting themselves in the foot, since digital innovations have both lowered production costs and let new features and effects be included in modern TV and movies. Since our government is dead-set on taking action, the question becomes one of helping our regulatory Harry Potters invoke the most innovation-friendly spell rather than (as might otherwise be preferable) giving up the magic of regulation altogether.

The Problems

Before we can outline a solution, we have to take a look at the problems. A list follows of the issues each set of stakeholders sees at the center of the transition to DTV. One might reasonably dispute some of the groups' assertions, but for the sake of argument I'll treat all their primary points as essentially valid. Even with that understanding, as we'll see, there may be a win-win solution for all the major players--especially consumers.

Problems for content companies. Motion picture studios, TV networks, and other companies that produce, publish, or distribute content worry that DTV will allow viewers to record high-quality content, then recirculate it through the Internet or other media, a la Napster. Such copying could undermine the revenue potential of high-quality content, which otherwise could be resold to local broadcasters through syndication or repackaged as VHS tapes and DVDs for sale or rental.

One proposed fix, widely advocated within the content industries, is to "mark" all commercial content that needs to be controlled-perhaps with a broadcast flag (a string of bits contained in the digital broadcasting stream) or perhaps with watermark technology (a hidden mark designed to survive digital-to-analog conversions, as well as the conversions of content that occur routinely in computers and consumer electronics).

Such marking solutions, however, produce another set of problems. To look for the marks, an unprecedentedly broad range of technologies would be required. Plus, the government would have to standardize the marking technologies. And broad sectors of the information technology, consumer electronics, and communications fields would have to be radically rebuilt. Some industrial sectors--especially those that produce niche digital-manipulation devices (such as Formac, whose product line converts TV to digital video and back again) or personal video recorder systems (such as TiVo)--might be wiped out by the cost of the redesign and by limits on developing new products.

Without government regulation and oversight, the marking approach can't work. Unless it's required by law, electronics manufacturers would have little incentive to encumber digial devices with the necessary features. Import regulations would be needed to prevent entry of noncompliant devices. And we might need new regulatory controls over analog-to-digital and digital-to-analog recording technologies. Such devices are currently ubiquitous and cheap, but because they may ignore or even strip out the marks placed in digital content, they form part of what the content industry calls "the analog hole"--their unsightly term for analog devices' tendency to ignore or sidestep digitally based protections, thus creating a gap through which protected digital content can leak,