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Hollywood, Silicon Valley Near Deal on Digital TV
By Andy Sullivan
WASHINGTON (Reuters) - Movie studios and consumer-electronics companies are close to reaching an agreement that would protect digital-television broadcasts from being copied and traded Napster-style over the Internet, negotiators said on Monday.
The group will likely report that most industry players agree that digital televisions, recordable DVDs and other devices should recognize a "broadcast flag" that would allow consumers to make personal copies but prevent them from distributing those copies online, said negotiators involved in the process.
Consumers could save digital broadcasts on DVDs, and transfer broadcasts for playback on different devices in the same house, they said. But they probably would not be able to e-mail an episode of "The Simpsons" to a friend, or make it available on a file-sharing network like Kazaa.
The agreement, if adopted by a standards-setting group on Wednesday, would knock down a major hurdle in the much-delayed transition to digital broadcasting and could serve as the basis for federal law.
It would also be a rare moment of harmony for Hollywood and Silicon Valley, which have clashed recently over whether devices such as computers and CD burners encourage piracy.
The Broadcast Protection Discussion Group, made up of representatives from major media companies, electronics manufacturers and high-tech companies like No. 1 chipmaker Intel Corp(NasdaqNM:INTC - News), was prepared late Monday to wrap up work on the issue after struggling with it since last November.
"We expect to have something done late today," said Robert Perry, a vice president of marketing at Mitsubishi Digital Electronics America(Tokyo:8058.T - News), who has served as one of three co-chairs of the group.
AGREEMENT COULD BREAK LOGJAM
The report will be taken up on Wednesday by the Copy Protection Working Group, a technical standards-setting body that has in the past arrived at common standards for DVDs.
The U.S. Congress or the Federal Communications Commission could use the group's conclusions as the basis for a new law that would prevent electronics manufacturers from making devices that do not conform, observers said.
The agreement could break the logjam between Silicon Valley and Hollywood that has slowed the adoption of digital television.
Media firms have been hesitant to embrace free, over-the-air digital broadcasts, worrying that perfect digital copies of shows like "Law and Order" would be subjected to the Internet-based bootlegging that has plagued the music industry since file-sharing programs such as Napster first emerged three years ago.
Electronics makers, for their part, worry that they would be forced to turn out DVD players and other devices laden with so many restrictions that nobody would want to buy them.
Substantial disagreements remain about the precise definitions of personal use, said negotiators, asking not to be quoted on the record. For example, the companies did not agree whether consumers would be allowed to send copies to their office computers, or whether recordable DVDs would have to be encrypted to prevent further duplication.
Joe Kraus, director of a consumer-rights group called Digitalconsumer.org, said that many tech companies were still not on board and planned to file dissenting comments along with the official report.
"The only consensus this group seems to be arriving at is that there is no consensus," Kraus said.
