Tomorrow the DC Circuit will hear arguments in the case challenging the FCC’s authority to impose the Broadcast Flag regulation. The case will determine whether the FCC can control the design of computers, in the name of copyright. It will also determine whether the ill-conceived Broadcast Flag rule will be imposed.

Today’s New York Times has a disappointing story, by Tom Zeller Jr., rehashing the arguments about the Broadcast Flag. I say it’s disappointing because it reiterates without comment the MPAA’s logically disconnected hash of arguments about the Broadcast Flag. I think the press has a responsibility, at the very least, not to let logically fallacious arguments pass without comment.

The article starts by describing Mike Godwin downloading an episode of the Showtime series “Huff.” After some scene-setting, we read this:

The M.P.A.A. has argued that without the broadcast flag rule, content creators would have no incentive to provide digital content over the airwaves, because people could simply pluck video streams out of the air and redistribute them to millions of viewers over the Internet.

“It’s very simple,” said Fritz Attaway, a vice president and Washington general counsel for the M.P.A.A. “Without the broadcast flag, high-value content would migrate to where it could be protected.”

In practical terms, such “protected” places would be cable and satellite systems where digital content can be more easily scrambled, encrypted or otherwise controlled, leaving broadcast networks at a distinct disadvantage in the new digital marketplace.

The fallacy here should be pretty obvious. “Huff” is already distributed only in a “protected” place – a premium cable channel – and it’s available for infringing downloaders. (Other cable and satellite offerings are similarly available on P2P.) This is not evidence that cable-like protection is needed for broadcast. To the contrary, it’s evidence that the “protection” of cable-like DRM is illusory.

Similarly, the article repeats without comment the MPAA argument that they will be forced to withhold high-resolution broadcast service unless the Broadcast Flag is imposed. This argument couldn’t be more wrong in its view of broadcasters’ incentives.

In fact, P2P infringement gives broadcasters a powerful incentive to offer higher-quality, higher-resolution content.
High-res content makes legitimate broadcast service more attractive to viewers. P2P versions can’t match these increases in resolution because doing so would make P2P files much bigger, clogging P2P systems with enormous files and making downloads much slower. If broadcasters have to “compete against free” their best hope is to actually compete, by improving their product – especially when the competitor can’t match the improvement.

If the Broadcast Flag actually did reduce infringement, then imposing it would only reduce broadcasters’ incentive to switch to high-res broadcast. Looking at the evidence, though, it could hardly be more clear that the Broadcast Flag won’t reduce the availability of P2P content at all. Even ignoring the Flag’s many technical loopholes, the best it could possibly offer is the same level of protection that cable content gets today. The evidence is overwhelming that that level is insufficient to keep programs off the P2P networks. Remember Huff?

The real story here, for an enterprising reporter, lies in how the MPAA convinced the FCC to mandate the Broadcast Flag despite offering only these weak arguments in the public proceeding.

I wrote yesterday about the new Cato Institute paper on the economics of peer-to-peer and anti-copying technology, which argues that everything will be okay in the online-music market because competition will force vendors to offer consumer-friendly products. I agree that a competitive market would have this effect. But how competitive is the market?

One of the more interesting sections of the Cato paper is about interoperability (pp. 8-9), or the ability of different DRM systems to work together. If a buy a file in one system, can I move it to another system? If two devices implement different DRM systems, can I transfer a file from one device to the other? If my DRM vendor goes out of business, do I lose access to my files?

The Cato paper says that DRM interoperability is good, and that progress is being made. I agree with the first part but I’m not so sure about the second. It’s not clear that we can rely on the DRM vendors to make their products interoperable – they have little incentive to help their customers switch to competitors’ products. Are there alternatives? Here’s the Cato paper:

Unilateral solutions may exist. In its present Harmony service, RealNetworks enables the compatibility of its RealPalyer Music Store tracks with both Apple’s iPod players and players compatible with Windows Media Audio (WMA). RealNetworks acomplished that by producing WMA files and integrating Windows Media Player on the user’s PC (both of which are permitted by Microsoft) and by reverse engineering Apple’s FairPlay DRM file format (which Apple may yet legally contest). In another potential solution, RapidSolution Software of Germany now offers software (called Tunebite) that allows users to re-record any file played on a PC by simple loopback through the PC’s audio card; songs are stored in an open format for later use. Parties differ as to whether the technology legally breaches access protection.

In other words, these products provide public benefits, but they might be illegal. One would expect, at this point, a policy discussion about why it might be wise to ensure that such products are legal. But that is not forthcoming. The authors just change the subject and talk about something else.

This flaw – extolling the virtues of competition, but failing to follow up by recommending pro-competition policies – seems to run throughout the otherwise excellent Cato paper. It makes sense to rely on market competition to blunt the potential downside of DRM. That strategy will only work if we adopt pro-competition policies, or at least reverse the anti-competition aspects of our current policy. Talking about competition is good; but having competition is much better.

Macrovision is introducing a new DRM technology for DVDs, apparently based on passive changes to the data encoded on the disc, according to a news.com article by John Borland. (The article is entitled “New Copy-Proof DVDs on the way?” The answer to that question is “no.”)

The new technology, called RipGuard, tries to code the DVD data on the disc in a way that triggers bugs in popular DVD ripping programs, while remaining readable on ordinary DVD players:

Macrovision’s new product takes a different approach to antipiracy than it has taken for analog or audio CDs. Gervin said Macrovision engineers have spent several years looking at how various DVD-copying software packages work and have devised ways to tweak the encoding of a DVD to block most of them.

That means the audio and video content itself requires no new hardware and isn’t scrambled anew, as is the case with most rights-management techniques. Someone using one of the ripping tools on a protected DVD might simply find their software crashing, or be presented with error messages instead of a copy.

As when used on CDs, this passive approach will only work against some ripping programs, and in any case will become useless as the bugs in ripping programs are fixed. If the goal is to keep protected DVD content off the P2P nets, then this product will fail.

The article argues that RipGuard can be updated over time, which is true, but not very helpful for copyright owners, for two reasons. First, there is a limited supply of disc-reading bugs in ripping programs, and each version of RipGuard will cause some of them to be fixed, making it harder to find bugs to exploit in the next RipGuard version. Second, although users can update their ripping software, there is no way to update RipGuard on DVDs that have already been sold. Once a version of RipGuard becomes useless, all of the discs produced with that version will be copyable forever after.

This is yet another anti-copying technology that will have no effect on P2P availability of content. It will make ripping somewhat more difficult for people who don’t use P2P; but how does that help the studios?

Yesterday was Groundhog Day, the holiday. But for SunnComm, the embattled CD-DRM vendor, it may have been Groundhog Day, the movie, in which Bill Murray’s character is doomed to repeat the same unpleasant events until he learns certain lessons.

Yesterday SunnComm announced a new product. According to a Register story, the product fixes SunnComm’s infamous Shift Key problem. One has to wonder where the Reg got this idea, given that SunnComm’s press release is written oh so carefully to avoid saying that they have actually fixed the Shift Key problem.

The Shift Key problem, discovered by my student Alex Halderman, allows any computer user to defeat SunnComm’s previous anti-copying technology by holding down the computer’s Shift key while inserting the CD. (True story: When Alex first told me this, it took me a while to verify it because SunnComm’s technology had no effect at all on the first few computers I tried, even without use of the Shift Key.) In reality, the Shift Key behavior is not a “problem” but a security feature of Windows which keeps software on a CD from installing itself without the user’s permission.

Early CD-DRM technologies used passive measures, meaning that they encoded the music on the CD with deliberate errors. The goal was to find a kind of error that would be corrected (or not noticed) by ordinary CD players, but would cause computers’ CD drives to fail. The result would be that people could play the CD on an ordinary player but couldn’t rip it (or play it, for that matter) on a computer. This plan never quite worked, for two reasons. First, it relied on bugs in computer drives. Those bugs didn’t exist in some computer systems, and where they did exist they tended to be fixed. Second, some CD players are built from the same components as computer CD drives, so some encoded CDs were unplayable on some ordinary CD players.

Later CD-DRM technologies, like MediaMax CD3, the SunnComm system that suffered from the Shift Key problem, relied on active measures. The CD would contain software that would (try to) install itself the first time the user put the CD into the computer. This software would then actively interfere with attempts to rip the music from the CD. (The software would also provide some limited access to the music on the CD.) The problem with active measures is that they don’t work if the software never gets installed on the user’s computer, and there is no realistic way to force the user to install the software. The Shift Key trick was just one way for the user to prevent unauthorized software installation.

SunnComm’s new press release says that they are now adding passive measures (i.e., deliberate data encoding errors) to their MediaMax technology. They claim that, despite these deliberate errors, the CDs will be “100% playable in all consumer CD and DVD players”. This is very hard to believe. Mostly compatible, sure. 98% compatible, maybe. But 100% compatibility requires the CD to be playable on those CD or DVD players that are built with computer-drive components. How they could do that, while maintaining the required incompatibility with those same components in a computer, is a mystery.

Beyond this, the new passive measures, like the old ones, must rely on computer bugs that won’t exist on some systems, and will tend to be fixed on others. On many computers, then, the new passive measures will have no effect at all, leaving only the old active measures, which will fall to the Shift Key trick. Now we can see why SunnComm’s release stops short of claiming a Shift Key fix, and of claiming to prevent P2P infringement. We can see, too, why SunnComm’s investors and customers will be disappointed, yet again, when the product is released and its limitations become obvious.

And then, like the Bill Murray character, SunnComm will be doomed to relive the cycle yet again.

Natali Helberger at INDICARE questions Microsoft’s new “playsforsure” campaign. Playsforsure is a logo that will be displayed by digital music and video stores, and media devices. The program has a cute logo:

According to the program’s website,

Look for the PlaysForSure logo if you’re shopping for a portable music or video device and you want to make sure the digital music and video you purchase will play back on it every time. Match the PlaysForSure logo on a large selection of leading devices and online music stores. If you see the logo you’ll know your digital music will play for sure.

So if I buy a product with the playsforsure logo on it, I can play any music I like on it. And if I buy a song from a playsforsure music store, I can play it on any device I like. Right? Maybe not. Elsewhere on the site, we find this:

When your device and music service are compatible with each other, all you have to do is choose the music that’s compatible with you.

Hmm, that doesn’t sound so good. But at least I’ll know that if my device, my music store, and my music all have the playsforsure logo, it’ll work, with no fine-print exceptions. Right? Maybe not.

Look on the back of the device box to see what type of media will play back on the device.

The checkmarks indicate if the device is capable of playing back audio and/or video that’s been downloaded from an online store. Additionally some devices will be able to play back media that has been purchased through an online store that offers subscription or rentals.

Well, at least I know that the engineers are doing everything they can to make their products compatible with each other. Maybe someday they’ll finish that MP3 standard and we’ll be able to play our music on any device we like.

[Ed’s assignment desk: Somebody with artistic talent (i.e., not me) should create a “playsmaybe” logo, perhaps depicting a square peg labled “playsmaybe” failing to fit into a round hole labeled “DRM in use”.]