Washington, D.C., March 6, 2003.At a Congressional hearing today, Fritz Attaway, Motion Picture Association of America (MPAA) Executive Vice President for Government Relations and Washington General Counsel, testified to Congress that as consumers are entering an unprecedented golden age of access to audiovisual content and television programming, the motion picture industry is facing widespread trafficking of movies and television shows on the Internet. "The greatest challenge [for the motion picture industry] is to maintain control over the distribution of movies and TV shows in order to recoup the cost of production and spur investment in new projects," he added.

In testimony before the Courts, the Internet and Intellectual Property Subcommittee of the House Judiciary Committee hearing on "Copyright Piracy Prevention and the Broadcast Flag," Fritz Attaway said that digital rights management technology is now being deployed by movie distributors to enable secure delivery of movies and TV shows to consumers and exponentially expand consumer choice. However, he said that leakage must be controlled, and he offered that the implementation of a Broadcast Flag is the "most appropriate and efficient solution for the protection of digital broadcast television."

Attaway made a key point: Average consumers would not even know there is a Broadcast Flag. It would not restrict consumer home copying. "The Broadcast Flag solution will allow consumers to make an unlimited number of physical recordings of DTV programs, and to distribute protected digital broadcast content within the personal digital network environment, defined as the home or similar local environment," he said. "Claims that the Broadcast Flag would prevent such uses as the transfer of content within the home, or the incorporation of broadcast content into a school project, or would require content owner approval for any such actions, are simply mistaken."

Attaway testified that implementation of the Broadcast Flag would have no impact on existing consumer equipment. He added that the cost impact on affected equipment going forward would be "insignificant."

Attaway also said that "the Broadcast Flag would not be required to be embedded in content, in the event that a content provider wishes to make its broadcast content available for wide redistribution."

Attaway reported to Congress that the Broadcast Flag "regulates a minimum number of products." He added, "The Broadcast Flag does not apply to every device, and does not apply to the equipment of Internet Service Providers; it applies only to DTV receivers, DTV modulators, and a very limited number of related DVT consumer products."

Attaway explained that the Broadcast Flag is necessary because, unlike conditional access systems such as cable and satellite, digital broadcast television programs are transmitted in the clear, and subject to an extraordinary high risk of unauthorized redistribution over digital networks such as the Internet. "Use of the Broadcast Flag would allow broadcasters to offer content creators the same protection against Internet redistribution that conditional access systems like and cable and satellite can provide," he said.

Attaway testified that "without the Broadcast Flag, the market will respond to the increasing threat of unauthorized redistribution by migrating high-quality programming away from broadcast television to other, protected distribution channels." He noted that the Broadcast Flag is "the only solution that preserved high-quality programming on broadcast television."

Attaway said that proposed regulations of the Broadcast Flag are based upon "a cross-industry consensus developed by the Broadcast Protection Discussion Group, an informal, open forum created for the purpose of finding a solution to the broadcast redistribution problem."

He also told Congress that implementation of the Broadcast Flag should be swift. He added that any further delay "will allow device manufacturers to create a huge legacy of non-compliant products that may stymie the Broadcast Flag."

Attaway said that the Federal Communications Commission (FCC) has initiated a proceeding aimed at adopting narrowly-targeted regulations mandating protection of digital broadcast television. He noted that the Commission recognized that if content creators cease to make their high-value programming available for distribution over digital broadcast television, then "digital television transition would be seriously threatened with consequent harm to consumers."

Attaway told Congress that the "implementation of the Broadcast Flag is a necessary, but by no means complete, solution to the problem of Internet trafficking in infringing movies and other copyrighted material." He added that another component of the problem is closing the analog hole, which refers to the conversion of protected digital content to analog, and its re-conversion to digital, a process that wipes out all known digital rights management technologies.

Attaway pointed out to the Members that as the movie industry is facing the problems of illegal distribution of its audiovisual works, it is working with the high-tech community to find mutually agreeable solutions. "The high-tech industry is our partner in this endeavor. Contrary to the perception of some, the high-tech and movie industries are not enemies. To the contrary, we share a common interest in providing consumers new viewing opportunities, which will create vast new markets for both consumers technology and content."

He added that "time is the essence. Consumers are anxious to take advantage of new viewing opportunities that require very substantial investment by content suppliers in new business models that cannot succeed in an environment of unbridled piracy."

Attaway closed by urging "Congress to take an active interest in solving the [piracy] problem, to encourage all parties to find practical solutions, and where purely marketplace solutions are not effective or cannot be implemented, to adopt such legislation as is necessary to achieve a golden age of consumer choice."