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Hollywood's efforts to keep its products off the Internet are misguided, according to Philips Consumer Electronics president and CEO Lawrence J. Blanford. Proposals offered to date won't work and will hurt both consumers and electronics manufacturers, Blanford told Congress on September 17.

Hollywood's plan includes inserting a "broadcast flag" in digitally broadcast programming, a small string of code to cue home recording devices as to whether a program can or cannot be recorded, and how many times. The proposal also calls for encrypting digital content using what backers describe as "authorized technologies," a requirement that Blanford claimed would require consumers to "replace every device in the home network." These requirements impose unfair burdens on consumers and manufacturers, Blanford asserted.

Compounding the problem, the broadcast flag approach simply won't work. "The bottom line is that it leaks like a sieve," Blanford said, something the Motion Picture Association of America (MPAA) recently acknowledged. Current plans would severely restrict consumers' "fair use" of digital content and could interfere with normal communications, such as forwarding a news clip via email. Blanford told Senate Commerce, Science and Transportation Committee chairman Sam Brownback (R-KS) that if the proposal went through, "your staff in your Kansas office would be prevented from following your direction to e-mail to you in Washington a digital broadcast clip about a breaking news story in Kansas."

Blanford also criticized the rush to prevent Internet piracy, noting that the technology does not yet exist to enable sharing of high-definition video. Philips supports the concept of a "watermarking" system that would be transparent to consumers, but would enable enforcement of copyright law. The company has volunteered to work with the studios on such an approach. Blanford stressed the importance of "sequencing," or getting the right regulations in place in the right order, first with a national law protecting over-the-air TV content before the Federal Communications Commission (FCC) spells out technical specifications for digital broadcast content protection. He urged passage of a Brownback bill that would prevent the FCC from instituting any specific content protection technology.

According to Blanford, Philips is seeking a system that is fair to everyone—content providers, equipment makers, and the viewing public. "Philips is 100% committed to protecting high definition and other high value digital broadcast content from unauthorized redistribution to the public over the Internet," he emphasized. Philips takes the concerns of the broadcast community "very seriously," Blanford noted, but the company objects to the notion that a small group of consumer electronics and computer companies with control of "authorized technologies" could dictate the development of digital content protection technology and digital consumer electronics products.

"Imagine the uproar if the Department of Transportation were to mandate that General Motors had to seek prior approval from a committee consisting of Toyota, Nissan, Mitsubishi, and Ford before it could implement a new braking system," Blanford stated. "That is precisely the position in which Philips finds itself with regard to some of its most formidable, direct competitors."