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Can the Digital Hub Survive Hollywood?

The Most Important Rule: Build Products People Want.

iMovie, iPod, iPhoto, iTunes, television tuner-cards, composite video out, CD burners on laptops, flat-screen iMacs, Cinema displays, and QuickTime… seemingly every quarter, Apple ships another drool-worthy technology that further erodes the tenuous division between "entertainment devices" and computers.

Since 1979, Apple has broken every rule in business. It shipped a personal computer at a time when computers were million-dollar playthings of universities, insurance companies, and defense contractors. It introduced a commercial graphical interface to a market filled with power-nerds who sneered at the ridiculous idea of "friendly" computers. It brought video to the desktop, wireless to the home, and the biggest, sexiest titanium notebook ever made to laps everywhere. It put freaking open-source Unix underneath its legendarily easy-to-use operating system!

Apple has broken every rule except the most important one: build what your customers want to buy. Since 1979, Apple has achieved its every success by selling the stuff that people like you and I want to buy. Since 1979, Apple’s failures (Remember the Apple III? The Newton? The Cube?) have been products that simply didn’t sell well enough.

Today, Apple – and every other technology company – is in danger of losing its right to make any device that it thinks it can sell. Hollywood, panicked at the thought of unauthorized distribution of movies captured from digital television sets, is calling for a new law that would give it ultimate control over the design of every device capable of handling digital television signals.

This is bad news for any company that wants to collapse the distinction between entertainment devices and computers. Digital hub projects are exciting, but they’re also squarely in Hollywood’s cross-hairs. The more your Mac acts like a television device (think of TidBITS’s April Fools spoof iTiVo coming true, or El Gato’s new EyeTV) the more your Mac will be subject to regulations that are meant to control "only" digital television (DTV) devices.



We’ve seen some coarse attempts to reign in technical innovation from the likes of Senator Fritz Hollings (D-SC), whose Consumer Broadband and Digital Television Promotion Act (CBDTPA) is also known as the "Consume, But Don’t Try Programming Anything" bill. There’s a far more insidious threat to your rights to buy a Mac that does what you want it to do: regulations intended to speed the adoption of digital television are in the offing, regulations that will have a disastrous effect on Apple and every other computer manufacturer.

Digital Television and Hollywood — Here comes digital television. Digital television uses a lot less radio spectrum than the analog TV system we use today. If all broadcasters were to switch to digital, the U.S. government could auction off the freed-up spectrum for billions of dollars. Understandably, the FCC is big on getting America switched over to digital, so much so that they’ve ordered all analog broadcasts to cease in 2006, provided that 85 percent of Americans have bought digital sets.

Hollywood says that digital television will make it too easy to make digital copies of its broadcast movies and redistribute them over the Internet. Never mind that digital TV signals eat up to a whopping 19.4 megabits of data per second, well beyond the ability of any current Internet user to redistribute without compressing the video to the point where it’s indistinguishable from analog shows captured with a TV card. Never mind that you can always hook up a capture card to the analog output of a digital set and make a near-perfect copy.

Never mind reality. In Hollywood’s paranoid fantasy, digital television plus Internet equals total and immediate "Napsterization" of every movie shown on TV. So the Motion Picture Association of America (MPAA) has threatened to withhold its movies from digital television unless Something Is Done.

This has given the feds The Fear. If there aren’t any movies on digital television (the argument goes), no one will buy a digital TV set, and if no one buys a digital TV, the feds won’t be able to sell off all that freed-up spectrum and turn into budget-time heroes. So Something Will Be Done.

Perfect Control Makes Imperfect Devices — In November of 2001, at the request of Representative Billy Tauzin (R-LA), the MPAA’s Copy Protection Technical Working Group spun off a sub-group, called the Broadcast Protection Discussion Group (BPDG). It’s an inter-industry group with representatives from the movie studios, consumer electronics companies, computer companies, broadcasters, and cable and satellite operators. The BPDG’s job was to consult with all these industries and draft a proposal that would set out what kinds of technologies would be legal for use in conjunction with digital television.


The BPDG started off by ratifying two principles:

  1. All digital TV technologies must be "tamper resistant." That means that they need to be engineered to frustrate end-users’ attempts to modify them. Under this rule, open-source digital television components will be illegal, since open-source software (like Darwin, the system that underpins Mac OS X) is designed to be modified by end-users.

  2. To be legal, a digital television device must incorporate only approved recording and output technologies. Some system will be devised to green-light technologies that won’t "compromise" the programming that they interact with, and if you want to build a digital TV device, you’ll need to draw its recording and output components exclusively from the list of approved technologies.

Hollywood Never Gets Technology — The entertainment industry has a rotten track record when it comes to assessing the impact of new technologies on its bottom line. Every new media technology that’s come down the pipe has been the subject of entertainment industry lawsuits over its right to exist: from player pianos to the radio to the VCR to the MP3 format and the digital video recorder, the industry has attempted to convince the courts to ban or neuter every new entertainment technology.

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In 1984, Hollywood lost its suit to keep Sony’s Betamax VCR off the market. The Betamax, Hollywood argued, would kill the movie industry. In the words of MPAA president Jack Valenti, the VCR was to the American film industry "as the Boston Strangler is to the woman home alone." The most important thing to emerge from that case was the "Betamax doctrine," the legal principle that a media technology is legal, even if it can be used to infringe copyright, provided that it has substantial non-infringing uses.

That means that even though a VCR can be used to duplicate and resell commercial video cassettes illegally, it’s still legal to manufacture VCRs, because you can also use them to time-shift your favorite programs, a use that is legal. That’s why the iPod exists: You can create MP3s legally by ripping your lawfully acquired CDs with iTunes. That you can also illegally download MP3s from file-sharing networks is irrelevant: the iPod has a substantial, non-infringing use.

The BPDG proposal compromises the Betamax Doctrine. Under Betamax, Apple can make any device it wants to, without having to design it so that it can never be used to infringe – it is enough that some of the uses for the device are non-infringing. Crowbar manufacturers aren’t required to design their tools so that they can never be used to break into houses – it’s enough that crowbars have some lawful uses. It’s impossible to make really good, general-purpose tools that can’t ever be used illegally – Betamax lets manufacturers off that impossible hook.

A Veto Over New Technology — Consumer electronics and IT companies were willing to go along with the idea that devices should be tamper-resistant, and that there should be some criteria for deciding which outputs and recording methods would be permitted. Each company had its own reasons for participating.

Two groups now have proprietary copy-prevention technology they want to build a market for: Hitachi, Intel, Matsushita, Sony, and Toshiba are members of the "5C" group, and Intel, IBM, Matsushita (Panasonic), and Toshiba are members of the "4C" group. Since the 4C and 5C technologies have been blessed by Hollywood’s representatives to the BPDG, a mandated BPDG standard will make it illegal to sell less-restrictive competing products, and so by participating in BPDG, the 4C and 5C companies could shut out the competition, guaranteeing a royalty on every DTV device sold.



Other companies, like Philips and Microsoft, have their own copy-prevention technologies and were anxious that if they didn’t play ball with the BPDG, it would be illegal for them to sell DTV devices that incorporate their technology.

Finally, the computer companies became involved because they saw the BPDG as a way of setting out an objective standard that they could follow, and in so doing, be sure that they wouldn’t be sued into bankruptcy if their customers figured out how to use their technology in ways that Hollywood disapproved of. But then Hollywood dropped its bomb. When it came time to setting out the actual criteria for DTV technology, Hollywood announced that it would consider only one proposal: new DTV technology would be legal only if three major movie studios approved it.

The tech companies at the BPDG had been there with the understanding that the BPDG’s job was to establish a set of objective criteria for new technology. Those criteria might be restrictive, but at the very least, tech companies would know where they stood when they were planning new gizmos.

Hollywood suckered the tech companies in with this promise and then sprang the trap. No, you won’t get a set of objective criteria out of us. From now on, every technology company with a new product will have to come to us on its knees and beg for our approval. We can’t tell you what technology we’re looking for, but we’ll know it when we see it. That’s the "standard" we’re writing here: we’ll know it when we see it.

The Endgame — The BPDG co-chairs submitted their final report to Rep. Tauzin, the Congressman who had asked for the BPDG to be formed at the beginning. The report was short and sweet, but attached to it was a half-inch thick collection of dissenting opinions from the likes of the Electronic Frontier Foundation, the Free Software Foundation, and Digital Consumer, as well as commercial interests like Philips, Sharp, Zenith, Thomson, and Microsoft.

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Missing from the report were objections from any computer manufacturer. The information technology industry took its lead from Intel, which has an interest in the 5C and 4C technologies, and is quite pleased at the idea of a BPDG mandate becoming law. Apple, which has previously been outspoken on the subject of a free technology market, was silent, as were IBM, HP, Dell, Gateway, and all the other general-purpose computing companies who have the most to lose from a BPDG mandate.


The Future — It’s bleak. On 08-Aug-02, FCC Chairman Michael Powell announced that the FCC would open proceedings to mandate the BPDG proposal, turning this "standard" into the law of the land. Without any computer companies willing to carry the banner for the freedom to innovate, to make Betamax-legal technology without oversight from the film industry, the BPDG mandate will almost certainly come to pass.

The BPDG world will be extremely hostile to the digital hub concept. Think about a high-definition digital video suite of iMovie tools. These tools will exist to capture, store, and manipulate high-definition video streams – streams from camcorders, TV sources, and removable media like DVDs. They might support cable-in or a DTV antenna so that your digital hub doesn’t require a stand-alone TV. And they’ll need a DVD burner/reader and drivers.

Incorporating a tuner and a DVD player/burner into a Mac is just the kind of thing that scares the daylights out of the BPDG. If you expect to be able to play your existing DVDs on your Mac, let alone record shows that you get off cable or an antenna and play them on your TV set, think again.

Hollywood wants to be sure that you can’t do anything with video from TV or cable without the film studios’ permission. So while you may want to be able to stick a DVD full of home movies into your Mac and edit a five minute short for your distant relatives to download from your iDisk, Hollywood wants to be sure you won’t be able to do the same with that episode of Buffy you recorded from the TV. When your distant relatives download your home movies to their computers and burn them to DVD, Hollywood wants to be sure that what they’re burning is really a home movie and not a Law & Order episode that slipped through the cracks and made it onto a Web site.

How can this be accomplished? Once the video is on a DVD, a Web site, or your hard disk, neither your Mac nor your TV can tell the difference between Buffy and your holiday videos. There’s no easy answer, and lucky for us, the Betamax doctrine says that just because someone might do something illegal with El Gato’s EyeTV or a real iTiVo, it doesn’t mean you can’t have one. It’s enough that there are legal things that can be done with the technology.

But absent any way to achieve Hollywood-grade perfect control over the technology’s use, the BPDG simply won’t let it come into being. It will be illegal to manufacture this device.

Hollywood’s approval of an iTiVo will be contingent on its "tamper resistance" (so long, Mac OS X, hello again, Mac OS 9!) and its operating system will have to include a facility for marking files that can’t be streamed over an AirPort card or Ethernet port (forget sitting in your bedroom watching video stored on a server in your living room!). The entire operating system and box will have to be redesigned to prevent unauthorized copying of Hollywood movies, even if that means your own digital video data can’t be backed up, sent to a friend, or accessed remotely.

If the entertainment industry had gotten its way, we wouldn’t have radios, TVs, VCRs, MP3s, or DVRs. Business Week called Hollywood "some of the most change-resistant companies in the world." No one should be in charge of what innovation is permitted, especially not the technophobes of the silver screen.

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A Glimmer of Hope — For all the likelihood of a BPDG mandate becoming law, it’s by no means inevitable.

One technology company – Apple, IBM, AMD, Gateway, Dell, HP – could stall the process. All it would take is a public statement of opposition to the BPDG, a breaking of ranks with Intel and the other companies who are seeking to secure a market for their copy-prevention technologies, and the FCC would be confronted with infinitely more uncertainty about a BPDG mandate than it currently faces.

There are already a couple million DTV devices in the market that will be nearly impossible to accommodate under the BPDG mandate; another 12 months and there will be 10 million or more, and it will be too late to try to lock down DTV without permanently alienating DTV’s most important customers.

Apple has been a strong champion of its customers’ right to buy and use innovative technologies in innovative ways. If any company has the rule-breaking courage to stand up to Hollywood’s bullying, it’s Apple. If we’re very lucky, Apple will agree. One press conference where Steve Jobs gives the MPAA what-for would likely derail the FCC’s consideration of the BPDG process – maybe forever.

Mac users are fiercely loyal to the Macintosh, and Apple has always responded with new Macs with innovative features. Let’s hope that they won’t forget us now that there’s pending legislation that could hamstring both Apple’s entire digital hub strategy and the ways we already use our Macs with tools like iMovie, iDVD, and the SuperDrive.

(For further reading, I encourage you to read the following Web sites and articles: the EFF’s BPDG weblog, "Consensus at Lawyerpoint"; Rep. Tauzin’s memo to the BPDG representatives; the EFF’s letter to Rep. Tauzin; the New York Times on the BPDG’s final report; the EFF’s comments on the BPDG’s final report; a summary of the EFF’s comments on the BPDG’s final report; and the BPDG final report.)




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[Cory Doctorow is Outreach Coordinator for the Electronic Frontier Foundation. He’s been using Apple computers since 1979 and has a 27-pixel-by-27-pixel tattoo of a Sad Mac on his right bicep. He won the John W. Campbell Award for Best New Science Fiction Writer at the 2000 Hugo Awards, and his first novel, Down and Out in the Magic Kingdom, will be published by Tor Books next Christmas. He is the co-editor of the weblogs Boing Boing and Forwarding Address: OS X and is a frequent contributor to Wired.]



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