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I have had a day to think about what I saw at the FTC’s town hall meeting on Digital Rights Management yesterday, and what it might mean for the future of DRM. The conference fell into the classic “good news, bad news” scenario.

Unrealistic Expectations

The good news is that the FTC is now more aware than ever of the difficulties to consumers implicit in Digital Rights Management (especially since they received over 800 public comments, which they admitted during the meeting they had not managed to work all the way through yet). The bad news is that the FTC cannot do anything about concerns with the Digital Millennium Copyright Act and fair use, or even anti-trust concerns relating to non-interoperable DRM.

The FTC is chiefly concerned with unfair and deceptive business practices. (For example, in the other big FTC story of the day, the FTC announced yesterday it was suing Dish Network for making telemarketing calls to people listed on the national Do Not Call Registry.)

If companies’ advertising lies about the limitations of their DRM, the FTC will look into it. If companies release DRM that harms the consumer (as in the infamous Sony rootkit debacle), they will investigate and possibly sanction. But they can’t do anything to let you copy DVDs to your video iPod when the DMCA forbids it. Talk to Congress about that.

That being said, the meeting was of great interest just for the open discussion of DRM among big guns from both consumer-advocacy and commercial trade groups. Anyone who did not realize DRM was a contentious issue before would certainly have gotten an earful.

Potential Remedies

Though some speakers were not terribly exciting (one read a ten-minute prepared statement in a sleep-inducing monotone; another rambled on at length about a “thought experiment” involving taking a bus full of developing-country representatives to a shopping mall that made no sense either during or after the speech), most of them had good points to make, pro or con.

Several potential DRM remedies were discussed, including

  • a logo-based disclosure system like ESRB or MPAA ratings so consumers would be able to see at a glance what DRM was on a product
  • making DRM systems more interoperable, or adding “exception handling” so DRM would permit more fair uses
  • DRM-using companies depositing keys and source code in escrow so that if they went bankrupt consumers would be able to crack the DRM and have access to the media they paid for afterward.

These took on a character of “pie in the sky,” however, given that imposing such solutions is generally outside the FTC’s brief. For example, making DRM more interoperable would be difficult given that companies generally have a vested interest in making sure their DRM works for them alone. (Apple’s stranglehold on the digital music industry due to its Fairplay DRM was brought up more than once.)

The FTC Takes Questions

One of the more interesting panels to me was the very last, in which representatives of the FTC got in the hot seat to field questions and comments as to what they might actually do about DRM. The answer: as stated above, not a whole lot.

Nonetheless, the first question fielded was one that I emailed, and I was even mentioned by both real name and moniker. (I had asked that TeleRead be mentioned as the source, but they forgot.) I pointed out that Amazon owned the Mobipocket e-book format, currently used by many of its e-book competitors, and asked what the FTC would be willing to do if they decided to stop licensing that format.

The FTC panel replied that they could not address specific what-if scenarios, but they could talk about similar investigations they had done in the past. They talked about their investigation into Microsoft when Microsoft wanted to get out of the music business and shut down its DRM servers—meaning that consumers would no longer be able to play the music they had bought from Microsoft. They closed the investigation after Microsoft agreed to keep its servers turned on.

All in all, the FTC town hall meeting was an interesting event, and worthwhile in that it fostered public discussion and debate about DRM that might end up educating more people about its disadvantages. But those who expected any solid commitments will be left disappointed.

Other Coverage

Here is a roundup of other articles I have found covering the town hall meeting.

Oren’s Weblog has excellent panel-by-panel summaries of the event (though Oren did not chronicle the sixth panel, in which the FTC answered questions about what measures it might take):

Content Agenda looks at the meeting here; the Copyright and Technology blog has coverage here. Brad’s Reader looks at some implications for e-books here. Here is a PDF article laying out a system of logo-based disclosure of DRM on download products of the sort that was proposed at the meeting.

Ars Technica also has an article summing up the first few panels that came before the lunch break.

 
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