To: The House Committee on Energy and Commerce, and its representatives.

Subject: Staff Draft, H.R._________, Regarding the Transition to Digital Television -- F:\V7\091802\091802.0T4
September 18, 2002 (5:12 PM)

Dear Sirs:

I have read your draft and am worried, and oppose, in the current form, the following sections, and propose the alternate language, with my reasons for this following each suggestion. Please keep me informed and tell me what I can do to assist your efforts to get Digital Television implemented Better, Faster, and Less Expensively.

Page 3, line 10, ) Change to read: "mission shall, by regulation, require that all consumer, special purpose, digital devices"

I believe that the major problem is the multitude of consumer devices, e.g. VCR's, PVR's etc. and that making them honor the Broadcast flag will eliminate most of the piracy. On the other hand making all Digital Devices honor the Broadcast flag puts too much burden on the general purpose PC development at too little benefit and thus I would prefer that only the special purpose consumer devices be controlled. I realize that this is not the intention of the bill, so I both propose that the intention be changed, and in the following suggest alternatives to restrict the bill to its "stated purpose"

Page 3, Line 19) Append: "The digital flag may only be used to restrict re-broadcast of non commercial material over the Internet, and the broadcast licenses will be revoked if it is used for additional restrictions and that no hardware be permitted to further restrict the material based on digital flags."

This ensures that the digital flag will not be the "Camel in the Tent" that though it initial is used to prevent Internet re-broadcast, can then be "upgraded" to reduce the current Fair use, e.g. Right of First Purchase rights that currently exist for broadcast and other Copyright material.

Page 3, Line 19) Append: " Demodulating devices that produce low resolution outputs, e.g. 768 * 512, can ignore the digital flag."

Since this is meant to be a trade off, e.g. to allow Content providers to know that their high quality material is re-broadcast on the Internet in return for providing that material. It seems to me that this "bends over backward" and that it would be more reasonable to allow current quality material to not be so restricted. In addition, this would allow PC cards and other general purpose hardware to be manufactured without the Broadcast Flag restrictions as long as they did not de-modulate to High Quality, thus leaving the door open to development of Video processing as it is today as long as the processing did not open the hole to High Quality re-broadcast.

Page 5, Line 2 ) Change to read: "facture of equipment >>that has high resolution, above 768 * 512 ,<< analog outputs by"

Page 5, Line 5) Change to read: signal protection for >> commercial supported original, << news and public affairs pro-"

I believe that standard commercially produced material should not be protected as it is paid for by the intrusive commercials, now over 15 minutes per hour in prime time. Only material that is produced for another medium, or for commercial free channels should be protected. The consumer pays for the material via commercials and should not be restricted from the use of this material.

Page 6, Line 21, thru Page 6, Line 3) Eliminate, as The professional exemption, should be eliminated.

I see no reason why professional equipment should be prevented from honoring the flag and in fact believe that this is a more serious hole than the PC hole. Serious pirates will use professional hardware and real professional's should not be allowed to circumvent the flag.

Page 7, Line 19) Append: "<Paragraph> (3) Internet rebroadcast means the dissemination of the material over a distance of more than one building or 1000 feet"

I think it is necessary to allow the transmission of the material from one device to another within the customers local area or you will prevent any of the new development in separating the Video control centers and the screens. I suspect that, given the addressing of the internet, you can do this by requiring that the transmission be limited to private addresses, but that is a technical, rather than a legal discussion.

Page 11, Line 7) Append: "or have a clear label that the hardware is not suitable for Digital TV display over 768 * 512 resolution."

As written, it is unclear as to whether PC displays would fall under this restriction and I believe that a PC display should be able to be exempted if it was clear to the purchaser that it would only be capable of low resolution TV display.

Page 13, Line 1) Altered to read: "shall >> be changed to provide for a broadcast HDTV slot that can accept either a HDTV tuner, to be priced no more than $50 or other Set top box HD outputs and << shall not be delayed except as expressly provided by Act'

The FCC requirement that all sets contain a HDTV tuner is a un-limited tax on a customer base, 90% of which probably not use their TV's for off the air reception anyway. The suggested change allows the Tuner Manufactures to commit to their estimated price as well as redacting the consumer who needs to purchase it to those who are not using Cable or Satellite. It reduces the cost from: a high end of $250 * 1/20 * 250,000,000 /year ~ $3 Billion, to a lower cost of: $50 * 1/200 * 250,000,000 / year ~ $62 Million e.g. by 50 times, while still ensuring that those who need the tuner can get it as a reasonable cost.

Page 14, Line 1 thru Page 16, Line 2) Deleted, as it seems to conflict with an earlier commitment that hardware in the next few years will not be obsoleted.

As I read Page 4, Line 14, all hardware made before 2005 will have full functionality, where as the labeling seems to indicate that your bill is reserving the right to change this as you are notifying the purchaser that his hardware may not fuction. Thus, either strike Page 4, Line 14,15, so that the consumer knows that you reserve the right to "obsolete" hardware purchased before 2006 or strike the labeling section so that the consumer can be assured that his purchases for the next 3 years will not be obsoleted. Personally, I think that if you don't plan to cause a resession in the Electronic business, you may need to strike this Page 14 -Page 16 section.

Mike Liveright 260 Byron Street. Palo Alto, CA 94301 (650) 323-2028