FCC to Head Off Internet Piracy of TV, Officials Say

[Gregg Lengling]

U.S. regulators in coming weeks will adopt strict limits on sending digital television programs over the Internet to avoid the problems now plaguing the music industry, U.S. officials said on Tuesday.

The Federal Communications Commission will likely adopt rules that will allow programmers to attach a code to digital broadcasts that will in most cases bar consumers from sending copies of popular shows around the world, said the officials, who declined further identification.

The approval, expected as early as next week, would be another step along the long road to the higher-quality, crisper digital signals, which have been slowed because of worries about piracy, high-priced equipment and limited available programming.

An agency spokeswoman declined to comment on when the five commissioners would vote on the issue.

Consumer advocates have warned that consumers will have to buy new DVD players if they want to play programs that have been recorded on machines that recognize the digital flag. But agency officials stressed that that always happens when new technology hits the market.

"It will simply prevent consumers from illegal piracy, from mass distribution over the Internet, which is the problem with the music file sharing," Kenneth Ferree, head of the FCC's media bureau, said in a telephone interview.

The music industry has been plagued over the last few years with consumers illegally sharing and copying songs over the Internet, which has led the recording industry to sue music downloaders for damages up to $150,000 per song.

Consumers will still be able to make unlimited copies of their favorite shows and watch them in various rooms of their homes, but they will not be able to send them over unsecured networks until protections are established.

"Why should anyone in the world buy if it's on the Internet," said Andrew Setos, president of engineering at News Corp.'s Fox Entertainment Group.

Initially, the FCC is aiming for a relatively open process for approving equipment that will read encrypted shows, officials said, and the agency will likely retain some oversight along the way to help ensure a fair review of new technologies.

Programmers had wanted a role in approving television equipment to ensure that security features were robust enough. But some technology firms, like Microsoft (MSFT.O: Quote, Profile, Research) , had worried they would be shut out from developing new ways to deliver protected digital content.

IBM (IBM.N: Quote, Profile, Research) has been developing technology so that some day consumers will be able transmit shows over secured networks, such as between their homes and offices.

Television set makers hope to begin installing the necessary equipment for the broadcast flag in new sets to go on sale next year.

"As a solution for addressing the single narrow problem of Internet redistribution, this is a pretty good solution," said Dave Arland, a spokesman for Thomson(TMS.PA: Quote, Profile, Research) , which manufactures RCA television sets.

But consumer advocates warn that it would make obsolete 50 million DVD players already in Americans' homes.

"If a consumer records a program on a new Broadcast Flag equipped machine and then tries to take that program and play it on Grandma's older DVD player, it's just not going to work," said Chris Murray, legislative counsel for Consumers Union.