The Internet Heist (Part I)

The early days of the war to control the future

The anti-piracy “You Wouldn’t Steal A Car” title-card, modified to read “You Wouldn’t Steal the Future.”
FACT (modified)

Note: This is Part I in a series; Part II is here, Part III is here

“A polite marketplace.”

That’s what the movie studio executive said he wanted to create.

It was my first day at the Electronic Frontier Foundation. One of our supporters had been at the National Association of Broadcasters show in Las Vegas the week before; coming back through the Convention Center late at night, he stumbled on an “open meeting” being held by the Motion Picture Association of America’s Copy Protection Technical Working Group. It was an “open meeting” in the sense that anyone who knew about it was welcome to attend, but they didn’t actually tell anyone it was happening, and they held it in the dead of night.

On the spur of the moment, that supporter decided to attend. What he heard was genuinely bizarre, and would have been absurd if it wasn’t so alarming.

That dead-of-night NAB meeting’s purpose was to announce the formation of a new interindustry consortium: the Broadcast Protection Discussion Group (BPDG), which would hold its inaugural “open meeting” the following week, at an LAX airport hotel that would be convenient for tech reps who flew in from Silicon Valley and for studio and TV reps based in LA.

BPDG’s purpose? To steal the future.

This was 2002.

The dotcom crash — accelerated by 9/11 — was still underway. The tech industry was reeling from the financial bloodbath and fragmented among hundreds of small, struggling companies. The few giants in the sector were seemingly fragile, with Apple on the ropes, Microsoft a convicted monopolist, Netscape in tatters, Yahoo an also-ran.

Contrast this with the entertainment industry, riding high despite the scare talk about Napster’s existential threat. Film, TV, broadcast, and cable were more concentrated than at any time in living memory. This consolidation allowed them to extract high profits from their customers and their talent, and, in a shrewd bit of let’s-you-and-he-fightism, to pit the two groups against each other with a narrative that held that the true predators on creative labor were the fans who loved it, not the sprawling multinational corporations that exploited it.

The entertainment industry had a well-developed playbook, honed through fights over piano rolls, radio broadcast, cable, and the VCR.

First, the incumbent firms would decry the new technology as a threat to the very idea of culture (John Philip Sousa claimed that the piano roll would cost the human race its voice boxes “as was the tail of man when he came from the ape”).

Then, they would suborn the courts and Congress to humble the companies that backed the new technology.

Finally, the would absorb the new technology, merging with or buying those companies. The new conglomerates would continue to develop new technologies, but only bring them to market in ways that respected the right of incumbents to steer the future of the industry and of culture.

Take Sony, the upstart electronics giant that had brought the VCR to market without seeking permission from the TV or film industries.

The resulting battle saw years of scare-talk (MPAA spokesmillionaire Jack Valenti likened the VCR to “the Boston Strangler”) and racist yellow peril rhetoric that implied that Japan was seeking revenge for its defeat in WWII by waging soft war on the all-American culture industry. The fight wasn’t confined to the court of public opinion — it was also waged in actual court. Eight years of litigation ended with a landmark Supreme Court ruling in Sony’s favor.

But Sony was defeated in victory. After acquiring a string of US entertainment companies, it found itself hopelessly compromised, transformed into a timid industry follower. No better example of this exists than Sony’s failure to launch an MP3 player: the company that brought us the Walkman — poster child for “Home Taping is Killing Music” — was so cowed that it sat out the portable digital music revolution, fielding a series of abysmal, DRM-shackled abject failures while Apple ran circles around it with rev after rev of the iPod.

Sony was playing in a “polite marketplace.” Rather than making the best devices it could conceive of, it made devices whose driving ethos was don’t piss off the content barons.

That was the point of the BPDG: to turn the whole internet and every device connected to it into an agent of the polite marketplace.

The inciting incident for the BPDG was America’s long-delayed “digital TV transition.” Ever since ATSC — the US digital TV standard — had been formalized, a string of FCC chairs had promised to wean America off the old, analog, NTSC TV standard.

Nominally, this was about “modernizing” the US broadcast world, but the real prize was the electromagnetic spectrum that would be freed up by this transition. Cellular demand was booming, and the FCC had successfully tinkered with selling spectrum licenses to mobile companies, rather than simply giving exclusive — and virtual irrevocable — grants to broadcasters and other commercial users of America’s airwaves.

US broadcasters were squatting on vast swathes of spectrum (much of it unused, but politically impossible to wrest back) and the FCC understood that switching from analog to digital TV would allow it to reclaim all of that analog TV bandwidth and auction it for billions to wireless carriers.

But every deadline for the DTV transition came and went without any meaningful digital TV uptake in America. Other countries managed the switch, but not America.

It wasn’t like America loved low-res, analog TV. Rather, the early decision to make the US digital transition into a high-definition transition created an impossible-to-break vapor-lock. There wasn’t any high-def content in the TV broadcasters’ libraries (why would they have created high-def content when all of America’s TVs were standard-def?). There also weren’t any high-def TVs in America’s living rooms (why would Americans buy high-def TVs if the broadcasters weren’t airing high-def programming?).

Of course, advertisers weren’t going to produce and pay extra for high-def ads if these would be broadcast and/or seen in standard resolution. All that meant that broadcasters weren’t willing to invest in digital broadcasting infrastructure if there wasn’t any high-def programming, ads, or sets.

Other countries — like the UK — had pulled off their own DTV transitions by focusing on digital standard-def TV, which could be viewed on an analog set with nothing more than a converter box.

But the US didn’t look across the Atlantic for its DTV comparisons; rather, the nation glared suspiciously across the Pacific at Japan, where widespread adoption of digital high-def provided useful fodder for a fresh round of yellow peril dog whistles about America “losing the DTV wars.”

All this might have gone on forever save for the intervention of Rep Billy Tauzin, a flamboyant, lavishly corrupt, well-connected, and well-greased Congressman from Louisiana.

As we learned at that inaugural BPDG meeting, Rep Billy was committed to the DTV transition and he was willing to introduce legislation mandating a “polite marketplace.” All he needed from industry was the text of the legislation: a standard that he could incorporate into a bill dictating what DTV receivers must and must not do.

That was the role of the BPDG: to create a technical standard for the DTV transition. This standard would “protect content” (recall that BPDG’s convening body was the “Content Protection Technical Working Group”) and this protection would lure the film industry — which had deep libraries of high-definition content in the form of 35mm movies — to license its product for broadcast.

Advertisers would pay giant premiums to run commercials that interrupted free, high-def, over-the-air Hollywood blockbusters; that would cover the cost of DTV infrastructure upgrades. These same movies would stampede Americans into buying DTVs. The FCC would finally be able to claw back analog TV spectrum and sell it for billions. It would all be done so smoothly that none of the overwhelmingly elderly broadcast TV watchers — who vote like crazy — would even notice that the feds had broken their old TV sets.

Congress would thus be spared the electoral wrath of TV-worshipping seniors. A new generation of Americans would discover the joys of free TV. Mobile carriers would get a spectrum bonanza. Everyone would win!

All that remained was for the BPDG to draw up the rules that would lure Hollywood to release high-budget feature films for over-the-air broadcast.

But there was one problem.

Those airwaves belong to the American people. The rules that govern their use prohibit broadcasters from encrypting their signals. Any over-the-air broadcast must be “in the clear” — tunable by any equipment that complied with the public standards from the superannuated (analog) NTSC; to ATSC, its shiny, high-def digital successor.

The FCC and Billy Tauzin could offer the entertainment industry just about anything to get the DTV transition done…except allowing them to scramble those Hollywood movies.

That meant that anyone who followed the ATSC standard would be able to build a high-def, digital VCR — one that would let you capture your local broadcasters’ programming to a hard drive and from there, load it into a hypothetical, future “video iPod” — or a future “video Napster.” The studios were adamant that for so long as this was a possibility, they would boycott DTV (however, they carefully avoided promising that resolving this issue would result in their opening their libraries for over-the-air transmission).

The purpose of the BPDG was to find a way to square this unsquareable circle.

What I’m about to describe is really weird. It’s so weird — so stupid — that you might think that you’re likely to think that you’re misunderstanding it.

You’re not. It’s just that weird.

At the heart of the BPDG was something called the “Broadcast Flag.” The Broadcast Flag was a single bit — a zero or a one — that could be embedded in the header of a DTV broadcast. If it was set to “one,” then any equipment that encountered that “one” would be forced to pretend that the unencrypted video it accompanied was actually encrypted.

I told you it was weird!

Imagine if you had a rule that said buildings erected on public lands couldn’t have door-locks because public buildings should be open to the public. The Broadcast Flag solution would be to institute a rule that says, “if the doorknob of one of these doors has a sign hanging on it that reads ‘locked,’ then everyone must behave as though the door was locked.”

As you wrap your head around this idiotic proposition, you might be tempted to think it would never work. After all, to get everyone to treat doorknobs with “locked” signs as though they were actually locked would require a surreal far-reaching regulation that regulated all kinds of normal, everyday conduct that is currently unregulated.

Actually, that was the point.

Here’s the outline of the Broadcast Flag rule.

All devices capable of receiving a digital broadcast must:

  1. Check to see if there is a Broadcast Flag bit set to “one” in the video stream; if so
  2. The device must encrypt the video stream before saving it; and
  3. The device must not allow the video to be transferred from the receiver to another device unless that device is “approved”;
  4. All approved devices must also keep all their saved video streams encrypted;
  5. Approved devices must also be designed to “resist modification.”

This is a five-point program for creating a “polite marketplace.” To prevent wildcats from pulling a Sony and inventing a new kind of digital VCR that can record these unencrypted broadcasts on public airwaves, you just make a rule that says that no one is allowed to make digital VCRs unless they are designed to stop “unauthorized redistribution.”

Note that “unauthorized” is doing a lot of work here — “unauthorized” is by no means the same as “illegal.” Copyright law includes a suite of limitations and exceptions that allow for a wide range of unauthorized uses, including those governed by “fair use” but also the di minimis legal standard. Banning “unauthorized” activity is by no means the same thing as banning copyright infringement — rather, it’s a way to ban anything that a giant entertainment company finds distasteful, whether or not that activity is actually illegal.

All this needs to be understood in light of the then-brand-new Digital Millennium Copyright Act (DMCA, 1998), a Clinton-era legislative coup won by the same entertainment companies that were pushing for the Broadcast Flag.

The DMCA is a big, weird ball of copyright nonsense, but the relevant clause for this history is Section 1201, a rule that makes it a very serious crime to bypass an “effective means of access control” (AKA Digital Rights Management, or DRM) for a copyrighted work.

DMCA 1201 provides for a five-year prison sentence and a $500,000 fine for anyone who makes or shares a tool (or information that could help you make a tool) to bypass DRM — for a first offense!

When the DMCA was enacted, there was widespread alarm at the breadth of Section 1201. The law does not confine its scope to DRM-breaking that results in copyright infringement. Rather, it encompasses any act of DRM-breaking, whether or not copyright is violated. This means that a video that has even the most minimal, farcical DRM can’t be jailbroken without risking years and years and years in prison.

That means that the preferences of the company that wraps a file in DRM have the force of law, because removing the wrapper without permission, for any reason, is a crime. Copyright’s limitations and exceptions — the same limitations and exceptions that the Supreme Court leaned on to legalize Sony’s VCR in 1984 — are now a dead letter. Simply add the thinnest veneer of DRM and your wishes become law, a kind of “felony contempt of business model.”

A polite marketplace.

The idea of the Broadcast Flag:

  1. Make it illegal to create a digital TV decoder unless it added DRM;
  2. Only allow companies to implement that DRM if they promised not to hurt giant entertainment companies’ shareholders’ feelings;
  3. Put anyone who broke the DRM rather than playing by the rules in 2., above, in prison for five years.

Back to the BPDG.

These meetings had four major power blocs:

  1. The movie studios;
  2. The TV networks (often a division of the movie studios!);
  3. The tech companies;
  4. The consumer electronics companies.

When EFF turned up at that first BPDG meeting, we represented a fifth bloc:

  1. Public interest groups.

Groups 1–4 were interested in creating a set of rules that would determine the characteristics of any device capable of receiving (“tuning and demodulating”) an ATSC signal.

Group 5 — us — was interested in preserving the very idea of general-purpose computing.

Here’s a thing that might not be immediately obvious. Every single general purpose computer is potentially a digital TV tuner.

You see, computers are general purpose in a highly technical and inescapable sense. Every computer is capable of running any valid program. Some computers are faster, some are slower, some have more memory and some have less, but every one of them can process any string of valid instructions. Computer science has produced a wealth of breakthroughs in general-purpose computing architectures but has failed to produce a computer that can run most programs.

That’s how bad guys get your printer or smart sex toy or thermostat to run malicious software. At the heart of each of these gadgets is a general purpose computer. By design, that computer is only used for a small set of special purposes, but there’s no way to stop an attacker who gains access to it from running any program they can write.

In the pre-digital days, tuning a radio signal required an analog tuner —a circuit built around a quartz crystal whose vibrational frequency determined the radio’s capabilities — that is, whether it was an AM/FM set, a shortwave, a CB radio, a TV, or a satellite uplink.

But digital computers don’t need crystals to send and receive radio signals. Instead, they can become “software-defined radios” (SDRs). An SDR is a general-purpose computer that uses an oscillator (a commodity electronic component) to tune into or transmit different radio frequencies and generates or decodes radio waves using digital signal processing code.

SDRs are to radio as computers were to tabulating machines. Computers, with their inescapable general-purposeness, are able to replace the separate electromechanical tabulators we once used to ring up purchases, calculate ballistics, produce actuarial statistics, and tally the census. This one-off, purpose-built machines are all dissolved into the general-purpose slurry of modern computing, reduced to mere applications that all run on the same computing hardware.

In the same way, any computer performing as a software-defined radio can serve as a wifi card, a Bluetooth card, a TV tuner, an AM/FM tuner, a shortwave, a satellite uplink, and so on. Different applications might require different antennas or power, of course, and some computers might be too slow to be reliable for some apps, but in general, every computer is potentially every radio in the same way that every computer is potentially every tabulator.

The upshot of all this is that any Broadcast Regulation that regulated “digital TV tuners” would actually regulate all computers.

Let’s recap, shall we?

In early 2002, the MPAA convened a semi-secret inter-industry body to negotiate a mandatory standard for digital TV receivers. A powerful Congressman, Billy Tauzin, had promised them that whatever they came up with would have the force of law. These rules were nominally about what digital TV receivers could do, but they were actually about what every single computer could do.

That’s the scene setting. Next week, I’ll tell you how Intel and the entertainment companies played the tech and electronics companies for suckers, how Billy Tauzin bailed on Big Content, how the FCC stepped in to do his dirty work, and how the courts overturned the whole mess.

I’ll also tell you about the plot to “Plug the Analog Hole” — AKA, “The A-Hole Affair.”