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Contact:	Jeff Joseph				or	Robert Schwartz
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Home Recording Rights Coalition Criticizes Hollings/Stevens Bill for
Inviting Undefined and Unlimited Regulation of Digital Consumer
Devices

S. 2048 is Dangerous for Consumers and Inconsistent with Recent Movie
Studio Statements on Home Recording

Coalition Challenges Studios to Clarify Positions at FCC but Praises
Universal Recognition of "Encoding Rules"

Arlington, Va., March 22, 2002 - The Home Recording Rights Coalition
(HRRC) today expressed disappointment with the approach to legislation
taken in S. 2048, introduced yesterday by lead sponsors Senators
Ernest Hollings (D-SC) and Ted Stevens (R-AK).  The bill, entitled the
Consumer Broadband and Digital Television Promotion Act, is designed
to address copy protection and fair use concerns regarding digital
content and digital consumer technologies.  HRRC Chairman Gary Shapiro
said that this bill shares many of the basic flaws inherent in the
previously circulated but never introduced predecessor legislation,
the Security Systems Standards and Certification Act ("SSSCA").

"S. 2048 lacks a clear objective for all of the regulation that it
mandates and any defined goal for the process it would start," stated
Shapiro.  "Like the prior 'SSSCA' draft, the bill does not describe
any particular objective other than 'security,' nor does it guide the
regulatory agency (now the Federal Communications Commission) as to
when or how such 'security' should be applied, or to what effect.  As
such, it represents a particularly dangerous delegation of broad,
unfettered regulatory authority, which could have severe, adverse,
long-term consequences for American consumers.  Indeed, this is a
breathtaking delegation of authority to a regulatory agency that is
ill-equipped to perform such a monumental task "

The HRRC is concerned that S. 2048 mirrors the "SSSCA" in anticipating
a period for potentially focused private sector negotiations on
undefined "security" subjects, to limit the functionality of broadly
defined "digital media devices."  The Federal Communications
Commission (FCC) is then expected to determine whether subjective
"security" goals have been accomplished and then (if not) to conduct a
rulemaking to govern every conceivable consumer device that can handle
any content that contains digital audio or video.  It is unclear
whether S. 2048 is intended to apply solely to consumer electronics
and computer products that deal with video entertainment, or also to
all products that can handle music, computer programs, games, and data
as well.  The definitions embrace the broader categories, but the
limited exemptions are defined only in terms of video entertainment.

Shapiro praised the lead sponsors for recognizing in S. 2048 the
importance of "encoding rules," to limit impositions on consumers by
content providers - an important step toward acting on the principle
that legislation must be balanced to preserve reasonable and customary
consumer expectations.

"As this consumer protection was also incorporated by the Senate
Judiciary Committee and the House committees of jurisdiction in
Section 1201(k) of the Digital Millennium Copyright Act of 1998, it
now appears to be universally recognized as a key requirement for
proposals in this area," said Shapiro.  "However, S. 2048 appears to
recognize only a right to make a single, 'personal' copy, and then
only of certain defined television programs (not music).  Such a
restriction would make it impossible for Americans to record a program
on a device such as a personal video recorder (PVR), and then play it
somewhere else in the house.

"This anti-consumer limitation is particularly untimely and
disappointing. As recently as February 28, Hollywood executives
Michael Eisner of Disney and Peter Chernin of Fox told the Senate
Commerce Committee that their studios no longer have any objection to
home recording or to the circulation of copies 'anywhere in the house'
- so long as they are not re-broadcast over the Internet."

At the same Commerce Committee hearing, HRRC witness Bob Perry
explained that restricting a consumer's only copy to the single device
in which it was made will not be acceptable to American consumers, as
this device may not contain removable media, and, if a cable box, it
may have to be returned to a cable company.  HRRC has also expressed
concern, in recent Senate Commerce and Senate Judiciary Committee
hearings, over the possible imposition under FCC jurisdiction of
"selectable output control," and "downresolution" of high definition
television (HDTV) signals, so as to limit consumer viewing, as well as
recording.

Today, the HRRC called again for the motion picture industry to
clarify its contradictory positions before the FCC with respect to
consumer home recording (CS Docket 97-80 - concerning the attachment
of competitive consumer electronics devices, such as DTV receivers, to
digital cable systems).  Shapiro also again called on the FCC to
publish cable's secret "POD-Host Interface License Agreement"
("PHILA").  This license is a longstanding impediment to competitive
entry into the market for cable devices and contains provisions
supported by the motion picture industry which could drastically
curtail consumer home recording rights.

"It seems absurd for this legislation to even consider purporting to
give such broad, sweeping and extra-jurisdictional power to the FCC
when the motion picture industry cannot even take a clear position, in
a crucial and open docket there, as to vital matters of public policy
that are clearly within that agency's jurisdiction," Shapiro said.

About HRRC The Home Recording Rights Coalition, founded in 1981, is a
leading advocacy group for consumers' rights to use home electronics
products for private, non-commercial purposes. The members of HRRC
include consumers, retailers, manufacturers and professional servicers
of consumer electronics products. Further information on this and
related issues can be found on the HRRC website, www.hrrc.org.

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