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MAY 16, 2002 SPECIAL REPORT: LINUX GOES MAINSTREAM A Bad, Sad Hollywood Ending? Open-source software could find itself locked out of a whole industry if the entertainment giants get their way on copyright protection Initially, the Hollings bill provoked a huge outcry mainly from consumer groups, plus makers of PCs and electronics gear (see BW Online, 3/27/02, "Guard Copyrights, Don't Jail Innovation"). Now that the measure's full implications have sunk in, the usually vocal open-source community is starting to react as well. Linux guru and Hewlett-Packard consultant Bruce Perens says Hollings-style copyright protection schemes are "a high-level concern" for open-source advocates, a point he has made to Hollings' aides and to protechnology Representative Rick Boucher (D-Va.). Consumer-advocacy groups such as San Francisco's Electronic Frontier Foundation also are defending the open-source concept in negotiations between electronics manufacturers and entertainment companies that could result in new standards that outlaw the use of open-source components in new digital TV sets and tuners. KEY ISSUE. Here's the crux of the issue: Hollywood studios and record labels want to encrypt their products with an algorithm of some sort, for which every piece of hardware or software that plays or displays their material must have a corresponding electronic key. (If the algorithm or the key is missing, the content won't play -- thus thwarting pirates.) For added protection, the established entertainment companies want Congress to pass a law requiring technology companies to build the key into their products. Thus, no DVD players, PCs, CD players, or operating systems would be legal without Hollywood-designed copyright protection. The problem is, in their zeal to dictate how hardware and software makers build their equipment, the movie and music moguls would mess with matters that are none of their business, critics say. Embedding copyright-protection mechanisms into new PCs and other digital devices would mean inserting pieces of software code that are hidden, or locked down, and couldn't be altered. That would amount to nothing less than an assault on the open-source religion, which advocates sharing, collaboration, and free access to code. A crucial feature of the Linux operating system -- the basic software that controls a computer -- is that any part of it can be modified by its users, as long as they agree to make the modification available, for free, to the world at large. Locking down Linux could destroy this dynamic, on which plenty of corporate software developers now depend, and also bar open-source programmers from the $80 billion consumer-electronics market. SCRAMBLED AND UNSCRAMBLED. The Hollings bill's vague language makes it difficult to predict specifically how any new legislation would affect open-source software. Even so, the fears of the movement's junkies reflect more than paranoia. Just look at the controversy surrounding the encryption that's already embedded in DVD players. Six years after DVD players were introduced, no legal, "pure" (free of proprietary components) Linux DVD player is on the market. The reason: Each approved DVD manufacturer has to sign a licensing deal with the DVD Copy Control Assn. It requires that each player contain the Content Scrambling System (CSS), which prevents, say, a French citizen from watching a Hollywood movie before it has been released in France, as well as inhibiting unauthorized copying and distribution (see BW Online, 1/16/02, "The French Have a Word For It: Hacking"). Since the licensing goes against the most basic open-source ground rules, no company that used Linux signed the license. Thus, Linux users are unable to to watch DVDs on their computers. "Hollywood doesn't just make movies, it controls how consumers can watch the movie," complains Larry Rosen, a Silicon Valley attorney and executive director of the Open Source Initiative, a nonprofit organization dedicated to promoting open-source software. "They make it impossible for a movie to be legally viewable on Linux -- or on any machine they don't approve of. Does that hurt Linux? It hurts everyone." CRACKED CODE. The DVD example also illustrates something else: that even the best copyright-protection plan isn't foolproof. In mid-1999, 16-year-old Norwegian hacker Jon Johansen started to distribute a software program called DeCSS. It unscrambled the CSS encryption so DVDs would run on Linux. Once that was accomplished, DVDs could also be copied to hard drives and shared with Internet users, à la Napster. Since then, five or six Linux DVD players have come to market, all of which Hollywood claims are illegal because they don't contain the CSS. So far, U.S. courts have backed the studios, though several cases are still pending. There's only one "approved" Linux player, LinDVD, from a company called Intervideo. But it contains some proprietary code -- and has received lukewarm reviews from Linux users. Despite the breaches in CSS, copyright owners continue pursuing the idea of embedded copyright protection as a key weapon in their fight against piracy. They're now trying to create standards that could restrict the use of open-source software in the delivery of digital TV. Members of what's known as the Broadcast Protection Discussion Group (BPDG) confirm that closed-door talks between copyright owners and makers of consumer-electronics and PCs are focusing on securing veto power for Hollywood over technologies that could be used in future TV sets -- and open-source isn't on the O.K. list. BAD CALLS. The BPDG's recommendation, which could be announced as early as May 17, outlines two possible approaches, according to the group's members. Either Hollywood studios will have to approve which technologies can be used to encode and decode digital broadcasts, or they'll be allowed to construct a list of criteria that technologies must meet to be considered for use. That list would then be used by an arbitrator to decide if a technology is secure enough to entrust using with digital content. "No matter what, Hollywood has some control over the technologies manufacturers are allowed to support," says Seth Schoen, who is attending the BPDG meetings as an Electronic Frontier Foundation staffer. "And that limits consumer choice." A lawyer who works on behalf of the studios counters that Hollywood's position is right, adding: "It's their content that's at risk." Granted, but Hollywood has proved uniquely unqualified to decide which technologies will benefit consumers -- even in its own industry. THE VCR SCARE. In 1982, Jack Valenti, president of the Motion Picture Association of America, famously proclaimed that the videocassette recorder was as threatening to the movies as the Boston Strangler was to a woman walking alone. Twenty years later, video rentals account for 46% of studio revenues, vs. the 24% collected at the box office. Open-source advocates say that's proof enough the market, not the entertainment industry, should decide which technologies prevail. But Hollywood's voice -- and dollars -- carry more weight on Capitol Hill than ideological arguments about the best way to develop good, cheap software. So, for now, open-source advocates face a tough battle just to make themselves heard.  By Jane Black in New York Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story. To subscribe online to BusinessWeek magazine, please click here.  | | MAY
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