More on the Dish Incident

I wasn’t expecting my Tuesday post razzing Tom Giovanetti to get so much attention, and so I didn’t spend a lot of time making my point in the post clear. Giovanetti’s reaction on his blog has been basically that he doesn’t think there’s a DRM angle to the problem at all.

Without knowing the technical details of his particular device, it’s hard to know to what extent his specific box employs DRM technology. It’s conceivable that it doesn’t, although I think that’s unlikely.

However, my real point was a little broader than that: current trends in the design of digital media devices will make problems like Mr. Giovanetti’s more common. And a major driver of those trends is the DMCA.

In the olden days, consumer electronics devices were built to open standards. The specifications for a TV tuner, an RCA jack, or a compact disc, were publicly available. Anybody was free to build devices to the standard. That meant that if I didn’t like how a particular device worked, I could swap it out with a device from a competing manufacturer. That’s also how the PC market works: I can get my CPU from AMD or Intel, my graphics card from nVidia or ATI, my RAM and hard drive from several different companies, etc. Every component has alternatives, and any component will–more or less–work with other components that comply with the relevant standard. And there’s no centralize authority dictating what features devices must or must not have.

The next generation of digital media devices is evolving in a much different direction. In the DRMed world, every platform has an owner that has complete control over what components are allowed to work with the platform, and what features those components can have.

Take the DVD cartel, for example: they won’t allow anyone to build a DVD player that will fast-forward through commercials, play discs from multiple regions, or make a back-up copy of your disk. If you want to do something the DVD cartel has decreed you’re not allowed to do, your only choice is to break the law. This is a bad thing because any institution will make mistakes. The DVD cartel, for example, has yet to give consumers any legal way to play their DVDs on a Linux computer or a portable device like an iPod. Those are senseless and irritating restrictions that wouldn’t exist in a free market.

The next-generation video market is the same way. In my paper, I quote a letter from the general counsel of TiVo to the FCC complaining about how the cable industry was using its control over DRM (which exists only thanks to the DMCA) to prevent TiVo from building innovative next-generation PVRs:

There is little doubt that the cable industry would support two-way CableCARD products from manufacturers such as Samsung and LG Electronics as long as those products run [the Open Cable Applications Platform] and look, feel, operate, and are controlled by cable operators in every way. Such products, however, do not provide consumers with a competitive alternative to operator-supplied integrated set-top boxes. They don’t offer consumers additional services and features.

Pretty soon TiVo gave up and signed an agreement with Comcast to provide cable boxes to its customers, effectively putting TiVo under the thumb of the cable industry. TiVo realized that thanks to the DMCA, there’s no way they could legally produce PVRs to access CableCARD content unless they complied with Comcast’s demands. Pissing off the cable industry meant kissing the majority of their potential customers goodbye.

Which brings me back to my original point: in a free market, Giovanetti would be able to choose from a range of third-party PVRs to access the satellite industry’s content. But thanks to the DMCA, you pretty much have to take what your cable or satellite company gives you. And if the cable or satellite company, for whatever reason, doesn’t give you a backup option, there isn’t a whole lot you can do about that short of breaking the law.

Free markets depend on choice and competition, but thanks to the DMCA, the only kind of competition we get is inter-platform competition. You can pick between your cable company or a satellite company, but once you’ve made that choice, you’re at the mercy of that company to decide which devices you can use with its service. You can choose between iTunes or a Windows Media-based online music service, but once you’ve made that choice, you can only use MP3 players that have been approved by Apple or Microsoft, respectively. We’re moving away from a world of interoperable components in open platforms, into a balkanized world of closed, mutually incompatible platforms.

So regardless of whether this particular incident was caused by DRM, I think it’s clear that the public policies Giovanetti supports will make problems like his much more common. A DRMed world is a world in which consumers are at the mercy of whichever company or cartel controls the platform on which his content is delivered. If Dish, due to incompetence, laziness, or bureaucratic inertia, fails to provide him with a content-backup feature, he’s pretty much out of luck. He doesn’t have the option of going out and buying a third-party PVR that provides that feature. That, it seems to me, is a something we should all be concerned about.

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