MS. SOHN. Nevertheless, if Congress decides to impose a TV flag scheme, it must also ensure that consumers' rights under the copyright act are preserved. Thus, any broadcast flag legislation must be coupled with legislation that would permit circumvention of technological protection measures for lawful uses. We are grateful that Chairman Barton has recommended that any flag legislation also include H.R. 1201. In addition, any TV flag legislation should have meaningful exemptions for news and public affairs programming, distant education, and public domain programming. The former is particularly important as news programming is the public's compensation for permitting broadcasters to use the public airways for free. We have similar concerns about the audio flag which are discussed in detail in my written statement. Proponents of the audio flag do not even purport to be concerned with so-called indiscriminate redistribution of songs. Instead, they want to extinguish the long-protected consumer right to make personal home recordings of radio transmissions. There are far better alternatives to the heavy-handed technology mandates being discussed today. As Mr. Markey said, they include a multi-prong approach of consumer education, enforcement of copyright laws, and use of technological tools developed in the marketplace which Public Knowledge supports. The Grokster decision and the Family Entertainment Copyright Act are just two of several new legal tools that the content industry has at its disposal to protect its content. Members of the subcommittee, the TV and audio flags are controversial and do not reflect consensus. That is another myth. I am confident that you will conclude that the Federal Communications Commission should not become the Federal Computer Commission or the Federal Copyright Commission, and that the marketplace, not the Government is the best arbiter of what technologies succeed or fail. The flag rules place unacceptable limits on innovation, competition and consumer rights. I urge you to reject them. Thank you. [The prepared statement of Gigi Sohn follows:] PREPARED STATEMENT OF GIGI SOHN, PRESIDENT, PUBLIC KNOWLEDGE Chairman Upton, Ranking Member Markey and other members of the subcommittee, my name is Gigi B. Sohn. I am the President of Public Knowledge, a nonprofit public interest organization that addresses the public's stake in the convergence of communications policy and intellectual property law. I want to thank the subcommittee for inviting me to testify on the audio and video broadcast flags. I specifically want to focus on the impact of these technological mandates on consumers. I served as counsel to the nine public interest and library groups that successfully challenged the Federal Communications Commission's (FCC) broadcast flag rules in the United States Court of Appeals for the District of Columbia Circuit. My organization financed and coordinated the case, which is titled American Library Association v. FCC, 406 F.3d 689 (D.C. Cir. 2005). I have attached a copy of the court's decision in the case, and I respectfully request that it be placed into the record of this hearing. Introduction This is the digital golden age for consumers. They have numerous choices for buying digital content and for buying devices on which to play that content. Far away from the copyright and technology battles in which we engage in Washington, newly forged partnerships between technology companies and content companies are revolutionizing the way we view and listen to digital media. Here are just a few examples: New versions of Microsoft's Media Center software enable the playback of a Yahoo! has developed software and services that enable consumers to view, Google has developed a distribution system to allow anyone to provide videos for free or for sale, and allow others to download that content to a computer, Apple iPod, or Sony Play Station Portable (PSP). Google has announced content distribution agreements with large content providers like CBS and the NBA. This follows the recent success of NBC, ABC, and ESPN, which distribute programming in partnership with Apple's iTunes. TiVo's most recent software update makes it simple for consumers to watch their favorite television shows on popular players like the iPod and PSP. And soon, the next generation TiVo recorder will help consumers record over-the-air high-definition television. Together, XM Radio and Pioneer developed an innovative portable satellite radio player that, like a TiVo, allows consumers to automatically record their favorite songs or shows while they are being broadcast. A consumer's preferences are stored on the radio, and when connected to a computer, XM's software helps the consumer to find more information about the artists, purchase music through the new Napster, and discover other songs and shows by similar artists. These and many other examples demonstrate that the market for delivering content digitally over new technologies is working. Consumers can watch and listen to the content they purchase anytime and anywhere they want. Some of that content will be protected, and consumers can decide whether that protection is flexible enough. All of these great developments happened without government intervention. The public appetite for buying individual TV shows and songs online is growing by leaps and bounds. There are more ways than ever to watch TV and movies and listen to the radio. Here are some of the newest legal services that offer consumers the opportunity to view, either for free or for a charge, content provided by the TV networks and Hollywood studios: Last winter, CBS Sports and the NCAA announced that they would stream the NCAA tournament for free over the Internet. Over the course of the tournament, they served up a record 268,000 simultaneous streams, with a total of 14 million streams served and 4 million unique visitors.' The iTunes Video store, launched in October 2005, now carries television programs from ABC, NBC, Fox and CBS, along with many cable networks. In its first five months of operation, the movie store sold more than 12 million videos at $1.99 a piece. In May, ABC began offering downloads of many of its most popular shows, including Lost, Alias, and Desperate Housewives for free on a trial basis. Last week ABC reported that more than 11 million viewers used the service in the first month of operation. Services like CinemaNow and WorldCinemaOnline allow consumers to download Digital Rights Management (DRM) protected movies and TV shows to their computers. Consumers can opt for a limited time rental, or choose to keep the movie for a higher price. Akimbo and MovieBeam use a special set-top box that enables the user to download and watch movies on demand, with variable pricing based on the length of viewing. Warner Brothers has entered into a partnership with BitTorrent to provide DRM-protected media using BitTorrent technology. This innovative model will use BitTorrent's distributed model to provide high speed downloads, and shared compensation for the content owners. Yet even as innovators in the motion picture and recording industries promote these alternative distribution models and the technologies that facilitate them, their colleagues in Washington are asking Congress to step in and give them protection from the vague threat of massive copyright infringement the industry says these new technologies could facilitate. Let us be clear. The content industry has not shown that any infringement has resulted from these technologies. And it certainly has not shown that government 1http://www2.ncaa.org/portal/media_and_events/press_room/2006/march/20060320_mmod_rls.html technology mandates will work to stop actual copyright pirates rather than prevent ordinary consumers from engaging in lawful activities. The content industry is asking Congress to impose three technology mandates: the TV broadcast flag, an audio broadcast flag, and an end to the analog hole. Each mandate 1) injects government into technological design; 2) restricts lawful consumer activities; and 3) increases consumer costs by making obsolete millions of digital devices. Once consumers start to purchase devices that are compliant with these technology mandates, the costs will be enormous. For example: A consumer would not be able to record over-the-air local news on her broadcast-flag compliant digital video recorder in her living room and play it back on a non-compliant player in her bedroom (broadcast flag). A member of Congress could not email a clip of his appearance on the national news to his home office (broadcast flag). A student would be prohibited from recording excerpts from a DVD for a college Powerpoint presentation (analog hole). A consumer would be unable to record individual songs off digital broadcast and satellite radio (audio flag). Current versions of TiVos (and other digital video recorders), and Slingboxes may not work with analog hole closing compliant devices, rendering them virtually obsolete (analog hole and broadcast flag). A university could not use digital TV video clips for distance learning classes (broadcast flag). I urge the Committee to think very long and hard about trying to fix what is not broken. Ask yourselves, in light of recent marketplace developments, is it good policy to turn the Federal Communications Commission into the Federal Computer Commission or the Federal Copyright Commission? Is it good policy to impose limits on a new technology like HD Radio (that unlike digital television, consumers need not adopt) that may well kill it? Is it good policy to impose technological mandates (like the broadcast flag and closing the analog hole) that would result in consumers having to replace most of the new devices that they just purchased? There are better alternatives for protecting digital content than heavy-handed technology mandates. An effective multi-pronged approach would utilize consumer education, enforcement of copyright laws, new business models for content distribution and the use of technological tools developed in the marketplace, not mandated by government. The recent Grokster decision and the passage of the Family Entertainment and Copyright Act are just two of several new tools that the content industry has at its disposal to protect its content. Technology Mandates Harm Innovation and are Costly and Inconvenient for Consumers For Public Knowledge, its members and its public interest allies, the impact of the D.C. Circuit's decision vacating the broadcast flag rules goes far beyond citizens' ability to make non-infringing uses of copyrighted material they receive on free over-the-air broadcast television. Equally as important, the decision limited the power of a government agency that, in the court's own words, has never exercised such "sweeping" power over the design of a broad range of consumer electronics and computer devices. This hands-off approach has fostered a robust market place for electronic devices that has in turn made this country the leader in their development and manufacture. For this reason, any attempt to portray legislative reinstatement of the broadcast flag rules as "narrow" should be viewed with great skepticism. The rules put the FCC in the position of deciding the ultimate fate of every single device that can demodulate a digital television signal. The broadcast flag rules require the FCC to pre-approve television sets, computer software, digital video recorders, cellphones, game consoles, iPods and any |