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Mr. Chairman, Members of the
Subcommittee, thank you for the opportunity to testify before you today.
I am here today in my capacity as Chief Technology Officer of Matsushita
Electric Corporation of America and President of its Panasonic Technologies
Company division. Our company is
the principal U.S. subsidiary of Matsushita Electric Industrial Co., Ltd. (“MEI”).
Our principal brand, and the name by which the companies are commonly
known is “Panasonic.” Panasonic is one of the world’s largest producers of
innovative electronic and electric products for consumer, business and
industrial use. Our consumer and
broadcasting product lines include a broad array of audio, video, communications
and computing products and components. In
the DTV realm, for example, we were proud to introduce the first consumer HDTV
in the United States in the summer of 1998.
As a company on the cutting
edge of the transition to digital television, Panasonic has been deeply involved
in efforts to ensure that digital content is adequately protected.
My testimony summarizes some of the many technology development efforts
Panasonic has been involved in,
including the development of the CSS encryption system used to protect DVD
discs, the development by the “5C” group of companies of the Digital
Transmission Content Protection (“DTCP”) technology that protects
copyrighted content as it moves digitally from device to device in a home
network, and the invention of the Content Protection for Recordable Media (“CPRM”)
technology to provide secure, encrypted recording and storage of authorized
copies of copyrighted content.
In participating in these
technology development efforts my company has been guided by two overarching
principles:
-
Ensuring
that the legitimate interests of consumers – the bedrock of our business
– are preserved in the transition to digital technology; and
-
Enabling
new business opportunities for Consumer Electronics (“CE”). Information
Technology (“IT”) and content companies alike.
Although my prepared remarks
today focus most particularly on the experiences of Panasonic, I am here also as
a representative of the “5C” group of companies and would be happy to answer
questions with respect to 5C activities and initiatives during the question and
answer portion of the hearing.
At the outset, I would like
to express my gratitude to all of the Members of the Committee on Energy and
Commerce, including the Ranking Members of the full Committee and this
Subcommittee, and especially to both the Chairman of the full Committee and to
you, Mr. Chairman, for your continued focus through private meetings, industry
roundtables and other means on bringing the various stakeholders together to
address and resolve issues that have been affecting the transition to DTV. While the topic of today’s hearing is Ensuring Content Protection in the Digital Age, I believe that the
availability of robust content protection systems is only one of the building
blocks necessary to promote the transition to the digital world.
Because this Committee has been so dedicated to encouraging the
transition to DTV, and because 5C has played an important role in advancing the
transition to DTV, I will use the DTV example to illustrate the role that
content protection systems can play in the transition to and availability of new
digital technologies and compelling content for consumers.
Our experience has shown that careful balancing is necessary to achieve
the public policy goals articulated by this Committee, and to harmonize the
needs of consumers and of the various affected industries.
I believe that three things
are necessary to make the DTV transition a reality:
-
Carriage
of DTV signals by broadcasters, cable operators and satellite services;
-
Availability
of compelling content; and
-
Consumer
awareness and education about DTV and consumer DTV equipment that is
appealing and affordable
To
encourage the development of each of these components, a careful balancing of
interests is required.
-
Compelling
content is required to encourage consumers to look into, learn about, and
buy in to DTV;
-
Adequate
security is required before content owners will release compelling content;
and
-
DTV
products must be affordable and must respect legitimate consumer
expectations about how consumers will be able to use and enjoy content they
rightfully acquire.
Panasonic – through the 5C
and through other private licensing initiatives -- has been working hard to meet
the legitimate interests of content companies, broadcasters and consumers. I am pleased to report that much progress has been made in
each of the three areas I mentioned, however significant issues remain that
merit the Committee’s attention.
Carriage of DTV
Good progress has been made
with respect to ensuring carriage of DTV by broadcasters, cable operators and
satellite systems. I would like to extend congratulations, on behalf of
Panasonic to the broadcast industry which has made great strides towards DTV
availability. Over 300 broadcast
DTV stations are already on the air and carrying a variety of programming in TV
markets that comprise over three-quarters of all TV households.
I would also like to extend
congratulations to the cable industry which has been offering increasing DTV
content over the past few years to their digital subscribers.
There are many digital and some interactive program services already, and
several cable operators have recently announced plans to provide more on their
systems, including HDTV programming. Congratulations
are also in order to satellite service providers, which have carried digital,
and to borrow FCC Chairman Powell’s phrase,
“value-added” TV content from the time satellite services were
launched.
Panasonic has supported the
availability of such value-added content in a variety of ways.
Our company has made direct financial contributions to cover program
development and HDTV production costs. For
instance, we provided significant program production equipment support for the
first HDTV presentation of “Monday Night Football”, and for the past two
years we have sponsored CBS’s prime-time HDTV line-up. We likewise provide digital equipment loans and HDTV
production support for the efforts of several producers of high-quality digital
programming, such as nature, natural history, documentary and other programs
which are being aired on public and commercial broadcast, cable and satellite
channels. Panasonic is also
providing professional DTV and HDTV production equipment to producers, program
makers, and special-venue presenters in order assist in the transition to DTV.
Progress with respect to
carriage of content is encouraging, but I believe the transition to DTV could be
accelerated if consumers had access via “cable ready DTVs” and a choice at
retail of cable set top boxes. After
all, cable is the largest provider of television service to American TV
households. A key element of these
cable ready DTVs and retail set top boxes is the POD–Host Interface
technology. We would like the
license agreement for this technology to include clear rules, such as those
included in the 5C license for DTCP technology, to ensure that the technology
cannot be used to undermine consumers’ customary home recording expectations. I applaud the Committee’s efforts to date and urge the
Committee to keep a keen focus on these issues
Content
As I mentioned at the
outset, CE and IT manufacturers such as the 5C group of companies involved in
developing and licensing the DTCP technology, realize that in order for content
providers to fully embrace DTV and other new digital forms for delivery of
content, security concerns must be adequately addressed.
Panasonic has been at the forefront of developing content protection
technologies for use with both audio and video.
We have been directly involved in developing and licensing technologies
that can protect content from the source to the time it is displayed on a
consumer’s TV or PC. We have
likewise developed technologies to protect the content from unauthorized copying
and redistribution if/when it is recorded in the home.
In participating in these
technology development efforts Panasonic has been guided by several themes:
-
Technologies
should be developed through a process of inter-industry consultation and
collaboration to ensure that they are (a) practical to implement; (b)
achieve the legitimate copyright protection goals set forth by the content
community; and (c) deliver value to consumers.
-
Technology
initiatives should be led by the private sector. The
objectives should be achieved by voluntary license agreements where
possible, and complemented by narrowly-focused government action only where
necessary.
-
Technology
solutions should include rules to preserve consumers’ customary recording
expectations.
We realize that both the
opportunities and the potential challenges posed by the digital environment are
ever evolving. Despite the fact
that the content protection technologies we have been involved in developing
were each designed to meet specific sets of requirements outlined by the content
companies, the CE and IT companies involved in these efforts have been willing
to keep innovating and adding to the existing technologies (and creating new
ones) to meet unanticipated or previously unarticulated goals of the content
owners. Of course, this has all
been done with the interests of consumers in mind, because serving our customers
is Panasonic’s most important goal. In
our view this is the most effective way to proceed.
It is simply not possible for the government to mandate from above broad
design requirements which as effectively address the myriad of interests and
technological challenges as do collaborative private sector efforts.
We expect, nevertheless, that for any solution to be successful it must
withstand public scrutiny. We
therefore welcome your continued interest in our efforts to address these
challenges.
Some specific examples of
our activities with regard to content protection are summarized below.
5C
--
Panasonic is one of five
companies (sometimes therefore referred to as the “5C”), that developed the
Digital Transmission Content Protection (“DTCP”) technology used to protect
content as it traverses the IEEE 1394 home network.
-
DTCP
was developed and is being licensed by a license administrator established
by the five CE and IT companies to address requirements set forth in a
request for proposals by the CPTWG, a multi-industry group that included
direct participation by the motion picture industry.
-
The
technology protects content that enters the home via cable, satellite or
other means of conditional access technology from being copied or
retransmitted beyond the home (e.g., via the Internet) without authorization
of copyright holders and will be adapted for use to protect content that
enters the home via unencrypted digital broadcast pursuant to the
“broadcast flag” technology described below.
-
DTCP
employs encryption and authentication in order to ensure that content is
exchanged only among devices which agree to continue to protect the content.
-
Since
approximately 85% of TV households in the U.S. receive programming through
cable or satellite conditional access technologies, the DTCP technology may
be applied to this conditional-access protected content to prevent
unauthorized Internet retransmission.
-
The
DTCP technology license incorporates “encoding rules” modeled after
§ 1201(k) of the Digital Millennium Copyright Act (“DMCA”) to
preserve customary home recording practices.
These rules were developed through manufacturer and Content industry
consultation beginning in the early 1990s.
Pursuant to these provisions, content companies may use the DTCP
technology to protect content according to the following minimum rules --
-
Free
TV is freely copyable, but may be restricted from redistribution;
-
One
generation of copies must be permitted for paid programming such as HBO; and
-
Copying
(other than as part of a “pause” function that is periodically deleted)
may be prohibited with respect to packaged media, Pay Per View (“PPV”)
and Video On Demand (“VOD”) type content.
CSS
--
Together with Toshiba,
Panasonic developed the Content Scramble System technology used to encrypt
pre-recorded DVD discs
-
This
technology enabled the launch of DVD -- the most successful consumer product
ever.
-
Licensing
of CSS has now been turned over to a multi-industry group called the DVD
Copy Control Association (“DVDCCA”) which is comprised of
representatives of the CE, IT and Motion Picture industries.
-
Beyond
licensing the encryption technology used on pre-recorded DVD discs, DVDCCA
is tackling a number of additional projects, including the evaluation of a
‘watermark’ to be used in conjunction with pre-recorded DVD content to
provide additional security against recording and playback of unauthorized
copies of the content.
4C
--
Together with three other
companies (sometimes referred to as the “4C” ), Panasonic developed Content
Protection for Prerecorded Media (“CPPM” used e.g., to protect DVD-Audio)
and Content Protection for Recordable Media (“CPRM” used for secure
recording and storage of content)
-
The
technology was developed and is being licensed by CE/IT companies.
-
The
technology license incorporates rules that allow for customary consumer
copies such as for time-shifting and place-shifting of audio content.
Consumer
Equipment
The
third and central part of the puzzle in making the DTV transition a reality is
consumers. Consumer technologies
succeed when consumers are aware of them and see value in them for their own
lives. In the national transition
to DTV, all involved must be part of the effort to alert and educate consumers
to the DTV opportunities and choices they have.
And all must provide enough value for consumers to want to ‘buy in’
to the DTV revolution. Panasonic
tries to do this every day with its retail partners, in its advertising, in
joint DTV ‘launch parties’ and special events with broadcasters and others,
through support of CEA’s industry-wide promotion and education efforts, and,
most importantly, by providing a variety of DTV products we hope will be
appealing to consumers.
This
also means that consumer DTV products must be affordable, easy to use, and
respect consumer expectations about how the consumer will be able to interact
with and use content. Panasonic’s
activities, both in the 5C and elsewhere, have been guided by these concerns.
Therefore:
-
The
5C technology is licensed on a cost-recovery basis so as not to
unnecessarily add to the cost of consumer products
-
The
5C technology was developed in order to provide effective protection, yet
not impose undue burdens on product implementations so as not to compromise
product functionality
-
The
5C DTCP technology license incorporates “encoding rules” aimed at
protecting consumer’s fair use expectations.
Current Challenges &
Future Efforts
During hearings before the
Senate Commerce Committee in February, representatives of the motion picture
industry advocated the need for a government-mandated solution to three specific
problems:
-
Protection
for “in the clear” broadcast content to prevent unauthorized
redistribution of such content via the Internet,
-
Addressing
the so-called “analog hole,” and
-
Preventing
unauthorized “peer to peer” file sharing of copyrighted content.
Panasonic
agrees that these are serious issues deserving of attention. A brief summary of inter-industry efforts to consider these
challenges follows.
Protection of broadcast content delivered in the clear
Because
digital terrestrial television broadcasts and certain basic tier cable video
programs are delivered in unencrypted (“in the clear”) form, unlike
pre-recorded, encrypted, digital media such as DVD or digital cable and
satellite transmissions delivered via conditional access systems, there is no
technical or legal authorization necessary and no licensing predicate by which
to establish conditions for the secure handling of such content.
As a result, unprotected DTV content can, as a technical matter, be
delivered outside of the home environment, such as over the Internet without
authorization from copyright holders. In
November of 2001, representatives of the 5C members described to the Copy
Protection Technical Working Group (“CPTWG”) a refined version of a
proposal, originally presented to the 5C members by Fox following on industry
standards activity in the Advanced Television Standards Committee, which would
require certain devices which demodulate DTV content to respond to a
“Broadcast Flag” and securely route content which a copyright owner has
indicated should not be redistributed via the Internet, only to protected
digital output and recording technologies, or to analog outputs. The 5C members
recommended that a group be formed under the auspices of the CPTWG
to evaluate this proposal and to determine whether there is sufficient industry
and consumer organization support for the proposal as a solution to the problem
of unauthorized redistribution of broadcast content. To date, the group formed as a result of this initiative has
undertaken considerable activity --
-
The
Broadcast Protection Discussion Group (“BPDG”) has met 13 times in four
months, in person and by phone.
-
The
participants in these discussions appear to be in fundamental agreement that
an approach based on a “Broadcast Flag” is technically sufficient for
the purpose of signaling protection of DTV content in digital form,
beginning at the point of demodulation, against unauthorized redistribution.
-
There
is likewise substantial agreement as to the particular flag to be used, and
that content that is either marked with the flag or has not been screened
for the flag may only be recorded or output from covered products by either
(a) analog products and recording methods; and (b) digital outputs and
recording methods that provide protection against unauthorized
redistribution.
-
Certain
issues currently remain unresolved, including (a) finalization of criteria
used to determine whether a particular recording technology or digital
output protection method should be deemed “authorized;” and (b) whether
there is adequate support for an alternative proposal, advanced by Philips,
which would allow unencrypted digital-to-digital recordings of broadcast
content for at least some period of time.
-
The
schedule for BPDG now calls for a final report by mid-May, and I believe
that this is achievable.
-
Since
the BPDG was primarily focused on technical matters, a separate, “parallel
group” has been formed to begin discussing how to enforce the hoped-for
technology solution. It is
possible that narrowly focused government action will be necessary to
support any private sector technology approach.
Plugging
the so called “analog hole”
Digital content delivered in
a protected manner must nevertheless be converted to an unprotected analog
format in order for it to be viewed on the vast majority of HDTV and digital
televisions in consumers homes. The
“analog hole” refers to the potential which exists for redigitization and
subsequent unauthorized redistribution of content (via peer to peer networks or
otherwise) because of this need to convert digital signals to analog form in
order for them to be viewed. It is
currently thought that the most effective means by which the so called “analog
hole” issue can be addressed is by using a watermark to indicate how content
marked with the watermark can be copied and redistributed.
There are efforts currently
underway, under the auspices of the DVDCCA, to evaluate ‘standard
definition’ watermarks which we hope will be extensible to ‘high
definition’ content. This process
has shown that there are serious business, legal and technical issues that need
to be resolved before a watermark can be identified for use to plug the
“analog hole.” Further efforts
are necessary before it can be determined how such a watermark might practically
be implemented in order to mitigate the analog hole problem.
It is possible that narrowly-tailored government efforts may be necessary
to address this problem once an appropriate watermark has been identified,
however these decisions should await identification of such a watermark.
Preventing
unauthorized peer to peer distribution of content
The problem of unauthorized
peer to peer distribution of copyrighted content is most difficult to solve. CE and IT companies, including the members of 5C, are
sympathetic to the concerns of content owners, yet it is in the arena of solving
the peer to peer problem where the legitimate concerns of content owners, the
legitimate interests of consumers, and the ability of CE and IT manufacturers to
deliver products that are affordable and innovative may be hardest to harmonize.
The problem is made even more difficult by the fact that digital devices
are used to enjoy (and sometimes share) a variety of data – some of which are
not copyrighted.
To my knowledge no concrete
proposals concerning how to solve the peer to peer problem have been proposed by
any industry sector. It is quite
likely that no single solution to this problem will be developed and that
instead a variety of technical, legal and business approaches will be necessary. At the moment the immediate, although admittedly partial,
solution appears to be consumer education efforts and strong enforcement of
copyright laws to punish commercial piracy of copyrighted content.
In the event that inter-industry efforts to address the issue are
convened, Panasonic stands ready to contribute its technical knowledge to find a
solution which promotes the availability of digital content while promoting the
twin goals of preserving consumer rights and protecting the intellectual
property of content owners.
Conclusion
Panasonic
has built its business on delivering innovative products to consumers.
We realize that in order to deliver the greatest value to our customers
we must likewise provide strong copyright protection for the owners of
copyrighted content. For this reason we, together with other members of 5C have
been at the forefront of developing technologies that aid the transition to the
digital environment for all parties involved.
Panasonic will continue to contribute, where it can, to help address
technical challenges faced by the industries represented here today and to
promote a rapid and fruitful transition to DTV.
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