DRM CHIEF DISMISSES CONGRESS AS CONSTRUCTIVE PART OF DEBATE

Any content company can distribute digital content with any level of protection and any assigned rights of use now, and should be attempting just that rather than trying to replicate existing business models, ContentGuard CEO Michael Miron said. In interview with our affiliated newsletter Washington Internet Daily, Miron predicted “the content marketplace will be 10 times bigger 10 years from now” based on new business strategies empowered by DRM, despite naysayers who pointed to decline in traditional media sales, and that growth would happen without involvement of Congress.

“Legislative attempts may be well-intentioned,” Miron said, but they all look “in the rear-view mirror.” Consumers will dictate what content they want and how they want to use it, and Congress can’t anticipate those market forces, he said. Miron agreed with Boucher that DRM was solution, but differed with Boucher’s HR-107, which would permit circumvention of copy- protection mechanisms. Miron called that “legalized vigilantism.”

There was some consensus at Internet Caucus panel that narrow, targeted legislation could be good if it were codifying agreement by industry parties as appeared to be case with broadcast flag (CED April 7 p7). But Miron wouldn’t even accept that level of Hill involvement. He said that not every industry participant supported the broadcast flag -- “the computer industry has sort of recoiled in horror” -- and that law mandating flag would “freeze technological innovation over time.” It also would be ineffective, he said: “I give it maybe an hour before there’s shareware [to evade the protections] on the Net.”

Broadcast flag would be “speed bump” for consumer enjoyment of DTV, he said, in part because it would assign rights to device -- TV set -- rather than user. Miron contended that consumers would turn elsewhere for content, and broadcasters might even start distributing DTV content over broadband, which would permit them to encrypt content at source (broadcasters are not permitted to encrypt over-air transmissions, unlike cable or satellite providers).

Miron said power of consumer choice was so strong that “I'm always amused by people who say consumers aren’t represented” in DRM debate. That was argument last week by Alan Davidson of Center for Democracy & Technology (CDT), which is part of coalition with Public Knowledge, Consumers Union and others fighting for that very issue. But Miron said consumers “have more choices than ever before,” and pointed to low interest in industry-run online music services as proof that consumers were waiting for product that was more attractive. When told that consumers already had content free on peer-to-peer networks, Miron said: “You can compete with free. Free is filling a void, it’s a sign there’s a latent demand.”

But while Miron said consumers were waiting for more flexibility with their content, he insisted fair use “is not a right.” Rather, fair use “is in the eye of the beholder… you can’t build in a mandatory right [into DRM.]” Instead of identifying fair use, writing code to reflect it and having Congress mandate it, content providers should offer tailored services. If university students need to use DTV footage for classroom assignment, he said, system could be tailored where someone with university domain could stream real-time footage on their laptop before class.

ContentGuard gives away DRM specification known as extensible rights markup language (XrML), which involves number of company-owned patents. XrML already has been adopted by MPEG and final rules for its use are coming soon, Miron said. Specification also has been adopted by Open eBook and is being incorporated by WS (Web Services) Security technical committee under OASIS (Organization for Advancement of Structured Information Standards). Wireless community’s Open Mobile Alliance is going with noninteroperable system that Miron said content providers disliked, but he said “there’s a lot of momentum on a lot of fronts” toward universal DRM specification that includes XrML.