What a telling and timely juxtaposition.

On the day responses are due to the US FCC’s request for comments to the CUT FATT request for an official inquiry into patent overcharging in the US digital TV transition (the “ATSC standard”), Argentine President, Cristina Fernández de Kirchner, is reported to have confirmed that Argentina is about to follow Brazil with the rival and lower cost Japanese-Brazilian Digital TV system.

This is hardly a surprise — some three years ago Argentina decided to reverse its decision to adopt ATSC as the country’s terrestrial DTV standard and consider other options.

And this follows last week’s announcement by the government of Peru that it is also adopting the lower cost Japanese-Brazilian Digital TV system, after a meeting between President Alan García and Shunichi Yamaguchi, a special envoy of Japan’s Prime Minister.

As tempting as it might be to write off the CUT FATT petition as part of a tactical patent dispute between CUT FATT founder VIZIO and Japanese rival Funai (over patents Funai acquired from Grand Alliance  member Thomson Consumer Electronics), it is important that the US government, and the FCC in particular, look deeper and systematically rethink the confused and obsolete 1980’s-era “America-is-better-than-Japan” DTV policy that now risks seeping over into a next generation of US broadband policy.

One can hardly blame the U.S. Trade Development Agency to have funded in September 2008 a half-hearted promotion of ATSC to Peru, after all promoting ATSC abroad must seem to be nearly official US FCC policy and many still wrongly believe that because the US FCC officially adopted the ATSC standard, the “A” in ATSC must stand for America (it actually stands for “Advanced“).

But as the CUT FATT filing aptly points out (Exhibit 2), even as of May 2008, in a written response to the US Congress, then FCC Chairman Kevin Martin outlined clearly that the FCC has little idea of who even owns the patents in the ATSC standard, and must rely on news reports and second and third hand information.

Finally, as advocated in several places on this blog, a royalty-free standards process, rather a patent-pool based process, is worthy of serious consideration by the US FCC as a preferred process — and to see how this royalty-free process has already helped Brazil and other countries in Digital TV, see this article.

References

“Peru follows Brazil with ISDB”, Friday, April 24, 2009
http://www.tvtelco.com/nota.aspx?idcontenido=845&ididioma=2

“On the other hand, the DVB Coalition sent a press release by means of which it is highlighted that DVB is the cheapest set top box (U$S 28), whereas for the Brazilian standard, such cost amounts to U$S 138 and for the Japanese standard it amounts to $82. According to the Coalition, Peruvians would have invested U$S 161 millions in their digital TV transition if they had turned to DVB, whereas the Japanese-Brazilian standard will involve U$S 795 millions and the Japanese one will involve U$S 472 millions.”

“Confirmed: Argentina is close to ISDB”, Monday, April 27, 2009
http://www.tvtelco.com/nota.aspx?idcontenido=846&ididioma=2

“[L]ast week, the Argentine President, Cristina Fernández de Kirchner, confirmed that the country is about to follow Brazil with ISDB. “We are working to complement and agree on a common digital TV system so that part of the TV sets’ production elements can be produced in Argentina””

“Government selects Japanese-Brazilian digital TV standard”, Monday, Apr 27, 2009
http://www.yourcommunicationnews.com/government+selects+japanese-brazilian+digital+tv+standard_30737.html

“Digital TV decoders to be sold in Peru for $28 in six months”
http://www.livinginperu.com/news/8880

“[T]he Andean country’s Ministry of Communications (MTC) stated decoders would begin being sold for $28….Jorge Cuba, the vice minister of communications explained that the Japanese-Brazilian standard had been chosen, among other reasons, for its low cost.”

“European Commission offers Peru €500,000 to implement digital TV standard”, 2 April, 2009
http://www.livinginperu.com/news-8649-tventertainment-european-commission-offers-peru-a%E2%80%9A%C2%AC500-000-implement-digital-tv-standard

“[President of the European Commission] José Manuel Durao Barroso … offered Peru five hundred thousand Euros if the South American country decided to implement the European DVB-T standard instead of the Japanese-Brazilian SBTVD one.”

“José Manuel Durão Barroso, the current president of the European Commission, offered Peru €500,000 if Peru decided to implement the DVB-T standard instead of the Japanese-Brazilian SBTVD one.”

http://www.ustda.gov/program/sectors/standardsdevelopment.asp (retrieved April 27, 2009)


Peru Digital Television Standards – In 2008, USTDA funded an orientation visit to support the Government of Peru’s efforts to update the country’s telecommunication regulatory framework, including the adoption of a national digital satellite television (DTV) standard. The visit was designed to provide the Peruvian delegates with an opportunity to learn about the U.S. approach to telecom regulatory issues such as long distance licensing, broadband networks, Voice-over-Internet-Protocol (VoIP), digital television, convergence, spectrum, allocation, and local loop unbundling.

“TRI manages and provides technical, logistical, and communications
support to the U.S. Trade Development Agency (USTDA) Orientation Visit on Digital Television Standards”

http://www.tech-res.com/tri/news/managedevents.htm, September 21-27, 2008

“The purpose of this Orientation Visit is to educate and promote the ATSC Standard, which is the standard developed and used by the U.S. for digital television and to encourage the Peru policy makers to choose this standard when Peru makes the transition from digital to analog.”

“Argentina Favoring Brazilian Version of ISDB-T for Terrestrial DTV”, 09.12.2008 http://www.tvtechnology.com/article/66586

“Three years ago this month Argentina decided to reverse its decision to adopt ATSC as the country’s terrestrial DTV standard and consider other options.”

Yesterday’s kickoff of the FCC’s Broadband Plan proceedings were broadcast over the Internet in a proprietary video format.Standards "a key element in broadband deployment"

Worse, it was likely converted from a standards-based format to a proprietary format before it was put on the Internet! (The tip-off is that the closed-captioning overlay was already composited in).

Clearly, a proprietary broadband internet would not be, borrowing one Commissioner’s phrase, an “enlightened public policy” for America’s Broadband Plan.  The FCC’s notice of inquiry states (emphasis added):

“We also note that the development of equipment and protocol standards is a key element in broadband deployment and seek comment on the appropriate role of the Commission in facilitating the development of such standards.”

So here is a clear, actionable role for the Commission — use standards.   Just say no to proprietary formats.

Statements by Commissioners echoed the historic policy importance and high stakes of this proceeding (emphasis added):

Broadband can be the great enabler that restores America’s economic well-being”…

…. “the most important public policy initiative affecting broadband since the landmark Telecommunications Act of 1996” …

…. “it is critical that our plan be competitively and technologically neutral … our plan must not favor one particular technology or type of provider over another, even inadvertently”

Please do not inadvertently favor turning the open Internet into a proprietary one in the name of broadband policy.

The American Recovery and Reinvestment Act of 2009, the “Recovery Act”, has allocated an unprecedented $7 Billion to broadband and has launched a new chapter of broadband policy in the US.

Let's not build another infrastructure on the sand of unknown ownership of the underlying technologies".The coming months will inspire an accelerated debate and consideration of what this can, and should, mean, on many levels from tactical grant-making to broader economic policy.  Already, the lead US government agencies have geared up public consultations and fast-track proceedings.

In the Recovery Act, Congress assigned grant and loanmaking responsibilities to the Department of Commerce’s National Telecommunications and Information Administration (NTIA) and the Department of Agriculture’s Rural Utilities Service (RUS). NTIA will administer the Broadband Technologies Opportunities Program (BTOP), which will provide grants for developing and expanding broadband services, and RUS will continue to administer its programs of broadband loans, loan guarantees, and grants with additional funds.

Congress has assigned a key consultative role to the Federal Communications Commission in defining the foundational terms of “broadband” and “unserved” and “underserved” areas and in establishing the non-discrimination and network interconnection obligations that will be contractual conditions of BTOP grants.

So here is a straightforward proposition:

“Broadband recovery needs a policy preference for royalty-free standards”

Although straightforward on its face, this proposition of a needed broadband recovery policy preference for royalty-free standards contains “what”, “why”, and “how” aspects.

Starting with the “what” aspect, this proposition contains four elements, each of which will merit a longer elaboration:

  • Policy – Of course, the Internet is based on royalty-free standards, originally funded by government research, so it may seem that a “policy” of preferring the lowest cost approach that enables a pro-competitive market dynamic is so obvious as to scarcely merit articulation.  But unlike DARPA and the generation that inspired the Internet and Web revolutions,  the FCC has favored royalty-bearing approaches, particularly in the pivotal broadband crossover enabler of digital television.
  • Policy Preference – the term “preference” may seem a soft concept, but standards gridlock is real, perhaps nowhere more so than in the challenge of sorting out royalty-bearing and royalty free (and ex post facto v. ex ante) standards processes — just putting all approaches in the same standards group fails to recognize the business models of standards thickets.
  • Royalty-Free – Not maybe royalty-free, not let’s hope royalty-free.  Royalty free. It bears noting that the FCC, a regulatory body, was never the actual end customer of these DTV standards, in the same way that the military was of the original Internet work, so the self-interested incentive to prefer a lower cost or royalty free approach was perhaps not as immediate, so these distinctions might seem academic — but they are not to anyone paying the bills.  Broadband recovery requires different thinking on this topic.
  • Royalty-Free Standards – Standards, not specifications owned or controlled by individual companies or industry segments.

From rural broadband related initiatives like IPTV and telemedicine to open video on the Web, the need for royalty-free, uncaptured broadband standards is a pressing issue that needs consideration now, rather than later. Let’s not build another infrastructure on the sand of unknown ownership of the underlying technologies.

Selected References

“Hey Obama: Rethink Digital Television”
http://robglidden.com/2009/01/rethink-digital-tv/

Why the Digital TV Delay May be a Good Thing
http://robglidden.com/2009/02/digital-tv-delay-may-be-good/

American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, 123 Stat. 115 (2009) (Recovery Act).

§ 6001(a):

“The [Assistant Secretary at NTIA], in consultation with the Federal Communications Commission . . . shall establish a national broadband service deployment and expansion program . . . .”

§ 6001(b)(1):

“The purposes of the [BTOP] are to . . . provide access to broadband service to consumers residing in unserved areas of the United States.”)

Recovery Act § 6001(j):

“Concurrent with the issuance of the Request for Proposal for grant applications pursuant to this section, the Assistant Secretary shall, in coordination with the Commission, publish the non-discrimination and network interconnection obligations that shall be contractual conditions of grants awarded under this section, including, at a minimum, adherence to the principles contained in the Commission’s broadband policy statement (FCC 05-15[1], adopted August 5, 2005).”

Conf. Rep. 111-16, at 776:

“The [Recovery Act] does not define such terms as ‘unserved area’ ‘underserved areas’ and ‘broadband.’ The Conferees instruct the NTIA to coordinate its understanding of these terms with the FCC, so that the NTIA may benefit from the FCC’s considerable expertise in these matters.”)

What would the Internet look like today if history had been just slightly different?

Say for example the Internet’s open, royalty-free foundation — protocols, HTML, etc. — hadn’t mostly won out?

Leaving only proprietary solutions or shifting interest groups (and their designates) maneuvering to disadvantage, overcharge, or end-run each other as the only — and underwhelming — drivers of deployment?

Unimaginable?  Improbable?  Hardly.  Welcome to daily life in the chronically-stunted US Interactive TV near-industry, little known outside its own community, which bared its soul this week at the superbly-run TV of Tomorrow Conference.

Don’t get me wrong, the US  interactive TV “ecosystem” — a term that when used at the event sparked discussions of sharks and survival — is as vibrant, passion-filled, and technically gifted as any you’ll find.

And ground-zero relevant, sitting squarely at the multi-industry techno-policy nexus of broadcasting, cable, broadband & wireless.  Multiplatform TV and “over the top” TV — Internet video to the TV without a gatekeeping operator or PC — are yet more cutting edges that the event considered in light of the US interactive TV experience.  But missed boats, like the millions of subsidized US DTV converter boxes which because of overpriced and/or controlled ITV specifications lack interactivity to speak of, merited no discussion.

But as one of the several impressive award winners evoked — the very idea of Interactive TV in the US can seem like a toxic relationship that keeps dysfunctionally drawing back an incredible amalgam of talent.

It may be tempting to write the whole movement off as some cautionary tale of the perils of convergence, a “Tragedy of the Anti-commons“, or a Darwinian techno-niche.

But can America really afford another underperforming, gridlocked opportunity, stalled in the starting gate?  Can’t this gifted, visionary community offer more?

The simple, compelling answer is “go open”.  Embrace a royalty-free, truly open approach.  All of the controlled and/or royalty-bearing specifications are available royalty free, an open video movement is gaining steam, and TV patent-pool lock-ups are under assault.  Even the long industry-captured US FCC may be willing to hear new ideas.

Admittedly, the thought of “going open” at the event seemed beyond the collective imagination of the US interactive ecosystem. The topic was skirted and slammed in a fiesty roundtable at the end of one day on the break-out potential of over-the-top video.

The reasons against going open are easy to list.  Too late/slow/hard.  Too risky.  The powers that be would never allow it, and would crush any dare to try.  “Someone” (usually the proprietary set top I’ve developed or hope to get venture-funded) will provide the industry-opening breakout.  I’ve got, or will get, my crumb, so don’t rock the boat.  I’ll get my own clever path to the TV, and everyone will get on board.  Standards take too long.

Each true in the small, tragic in the large.

ITV-ers unite:  demand a real, and really open, industry!

To be blunt:  America has the world’s most overpriced, antiquated, under-performing and anti-convergence digital TV system, and yet another delay in transition will create yet another round of inevitably-necessary but paper-over-the-problems government subsidies to highly questionable interests of highly doubtful economic value to enfranchise millions of consumers into the digital TV transition who should never have been disenfranchised in the first place.

All for technology that could be much less expensive, indeed free!

So how could this possibly be a good thing?

For one, it might spark a much-needed rethink of how we got here in the first place and a consideration of a better path forward.

Rethinking digital TV is no doubt a mind-bendingly complex topic fraught with peril, and one that will require hunting into the very nature of good government oversight.

A hunt for good government oversight of commerce — a very timely topic on many fronts, isn’t it?

So here are three start-the-hunt topics, hints to further analysis, really, I’d suggest to anyone looking into digital TV:

  • – “vendor capture”
  • – “misplaced Americanism”
  • – “out-sourced justice”

“Vendor Capture”

One hint at the need for broader rethink came in pledges last week by the new acting FCC chairman Michael Copps for more openness at the FCC to

“make the FCC more transparent, open and useful to the stakeholders that we serve. And when I say stakeholders, I include not just the industries that we regulate but, more importantly, all citizens—and here let me once again underline the word ‘all.'”  (emphasis added)

Such a pledge to openness taps into a vein of “Reforming the FCC” projects sprouting up.

Of course, vendor capture by interested interests is nothing new for regulatory agencies or even standards groups that purport to represent broader interests.

Indeed, vendor capture is a timeless occupational hazard even when challenged with the best of intents.  But recognizing and controlling vendor capture seems to have been an un-exercised muscle in the DTV regulatory community, particularly in the deregulation orthodoxies of recent decades.

One saga of vendor capture worth reexamining in light of downturn economics is the FCC’s decade long (5744 filings to date!), epically byzantine “separable security” proceeding for cable TV.  Like the DTV transition, this proceeding lives on in an odd “convergence-what-convergence?” bubble of regulating each industry sub-segment in isolation and has only recently begun to ask such basic questions as “whether there are technological solutions that are network agnostic and deployable across all MVPD [Multichannel Video Programming Distributor] platforms”.

“Misplaced Americanism”

But before a rush to blame “someone” devolves to easily-blamed “usual suspects” — like non-voting foreigners — take a look closer to home.

The CUT FATT group has sounded a very important alarm about the patent royalties fiasco that is dogging the US digital TV transition, and has connected the dot to the delay in DTV transition:

“Delaying the DTV transition date is the first step to protecting consumers, but is only part of the remedy needed,” …“Large foreign corporations that bought U.S. patents are exploiting the transition to make outrageous profits off digital television sales to consumers.”

Now such a statement read superficially might be misconstrued as a call to “misplaced Americanism”  (big foreign corporations bad etc. etc.) — which would miss the point that it is American consumers who ultimately pay.

Rather, look back to a well-known anecdote from the “Grand Alliance” that was tasked in the mid-1990s with recommending the digital TV system to the FCC in the first place, whose decision making process was later neatly summarized in a news article after ensuing litigation:

“half of the voting members, MIT and Zenith, of the Grand Alliance were receiving monetary compensation from Dolby as a partial result of their vote for Dolby … Dolby’s selection came after it offered another of the four voting members of the Alliance’s Technical Oversight Group, Zenith Electronics Corp., a 25 percent discount on patent royalties in exchange for Zenith’s vote”

MITThe scandal of relevance isn’t whether the decision making was rigged or not (though the jury in the subsequent contract dispute concluded Dolby indeed owed MIT for a secret agreement in which MIT fell on its sword in voting against its own technology in favor of Dolby) — it is the more subtle “vote American” context that some used to rationalize the situation overall and was captured in the same news article:

“Jae [the MIT representative on the Grand Alliance] was very pro-American,” … “He would naturally favor an American system over a foreign system.” …“Jae knew he supported American solutions, so that deal was consistent with that,” … “If it hadn’t been consistent, I don’t think Jae would have made the deal.”

An interesting justification indeed for one American institution (MIT) to vote for an American institution (Dolby) in a backroom deal that was to benefit both.

“Out-sourced Justice”

Another aspect of the curious MIT-Dolby dispute was the question of whether there was a conflict of interest at all, since the Grand Alliance was only recommending a joint decision to the FCC, not actually making the final decision.

“I can see how it would be perceived as a conflict of interest,” Gast said. But the Grand Alliance “wasn’t a decision-making body,” it was a group of companies joining together, at the request of the FCC, to make a unified proposal, she said.

Sounds reasonable enough, until one fast-forwards a few years and considers such statements in the CUT FATT filing to the FCC as:

“The FCC does not know what license terms ATSC patent holders demand or how much consumers ultimately pay for the DTV standard the FCC chose.”

If that sounds like a case of “out-sourced regulation” — consider it might be even more — a case of “out-sourced justice”.

Patent pool licensing practices, which also began to be authorized in the same time frame by the US Department of Justice after a long period of at most skeptical legitimacy, have begun to beget “To Join or Not to Join” trolling:  “as many as one half to two-thirds of the eligible firms choose not to join a patent pool”, engendering a “myth of essentiality” practice of outsourcing patent pool evaluations to so-called “independent contractors” paid by the very same patent holders.

But more on that topic another day — in the meantime: happy hunting!


American consumers will purchase more than 45 million DTVs
and will be overcharged more than one billion dollars in the
crucial digital transition years of 2008 and 2009 alone”

What?  The transition to digital TV is a massive overcharging scam?

That’s the gist of a filing last week to the FCC by two US-based TV makers, upstart VIZIO and Westinghouse Digital Electronics, in an aptly named coalition, CUT FATT.

The filing has caught good timing — a delay in the long-set-in-stone turn-off date of analog TV is being debated in Congress, with various industry interests weighing in.

But the filing isn’t about analog shutoff glitches, it’s a proposal to address the broken patent licensing situation that has made the US’s digital TV system uncompetitive in the global marketplace:

“the total cost of rampant overcharging has already dwarfed the entire transition subsidy provided through the National Telecommunications and Information Administration converter box program”

“the FCC’s 1996 policy of ad hoc enforcement to prevent DTV price gouging by patent holders is now hopelessly inadequate.”

And citing the FCC chairman’s own response to a 2008 congressional inquiry:

“Chairman Kevin Martin conceded that the FCC is shockingly ignorant of the technology the government forces Americans to buy…. The Consumer Electronics Association and several other parties have alerted the FCC to problems involving DTV patent licensing practices, but the FCC has not yet taken any action to investigate alleged abuses or impose appropriate remedies.”

Ouch — harsh light indeed.

Significantly, VIZIO and Westinghouse are the only US-based companies mentioned in a recent analysis of the bloody price and feature acceleration war gripping the global TV industry, an industry that since 1996 has migrated almost entirely out of the US.  Both are actually closely tied to Asian suppliers, and are on the receiving end of a patent ecology that tends to be controlled by larger consumer electronics companies, independent patent “trolls”, and other vested interests.

The filing puts a lot of stock in setting a price baseline based on “international comparables” as a methodology to corral patent holders into an acceptable framework — an interesting idea in itself, but one that risks simply embracing superficial concessions in a still-broken system and also one that opens the door to the more fundamental question — how did we get into this mess in the first place, over the decade since the US DTV system was adopted by the FCC, and what would be a better systematic policy approach?

I suggest this broader question is the starting point for considering a “new deal” in digital TV, one that addresses long-neglected issues of “who-wins-who-loses” and appropriate roles for government oversight (sound familiar in the current economic climate?)   For a start in the analysis needed, click here, or here.

Sun Microsystems has released a royalty-free Java specification as an alternative to the royalty-encumbered “GEM” and “MHP” family of digital TV specifications developed by the European Digital Video Broadcasting group and associated groups.

“GEM” and “MHP” may not be exactly household words, but they are the backbone specifications of the interactivity layer of Blu-ray, US cable’s “tru2way” platform, and national DTV adoptions in Italy, Korea, and elsewhere.

The backstory to this seemingly minor announcement should be evaluated closely by anyone around the world interested in the still-emerging field of digital TV deployments — it will provide eye-opening insight into the techno-politics of royalties, and the alternatives.

This royalty-free/open source specification work, announced in March 2008, has been a collaboration between Brazil’s Digital Television forum (SBTVD), the Brazilian government, Sun, and leading DTV vendors in Brazil to provide a royalty-free foundation to Brazil’s Ginga interactivity specification for DTV.

Patent royalties have been a painful aspect of digital TV rollouts around the world and belatedly recognized as problematic in the US.

Brazil is leading the charge of developing countries that are rethinking the business-as-usual approach of the developed world to the nexus between patent pools, standards, and open source (the word “neocolonial” comes up not infrequently when one looks at efforts by patent pools from developed countries to charge developing countries royalties to “join the digital TV era”).

Brazil has applied this fresh thinking to its digital TV rollout.  In 2006, Brazil chose the Japanese ISBD digital TV and mobile broadcasting standard in an MOU with Japan to “allow Brazilian companies to use the technology without paying royalties” — much to the chagrin and nay-saying of the royalty-encumbered European DVB and US/Korea ATSC standards.  The move sparked ongoing techno-geopolitical debates, but nonetheless has helped to up (or more accurately lower) the royalty ante for future DTV adoptions — like the already royalty-free UK MHEG-5 specification dodging the patent-pool bullet and enabling more royalty-free options for digital TV deployments.  One might suspect downward price pressure and bargaining leverage may have been in the picture when the MHP patent pool quietly lowered its prices.

Congratulations to the many incredibly talented people that have brought out the world’s newest and most innovative (and royalty-free!) interactive specification for digital TV, and thanks for the opportunity to help!


The “Open Media Stack – Video Specification V0.9” is now available for community review at the Open Media Commons website.

OMS, announced in April 2008, is a project of Sun Microsystems’ Open Media Commons initiative to define a complete, royalty-free media specification, including codecs and associated elements.

The OMS Video draft is a key milestone and a big deal, and not just because I am proud to have contributed to this effort at Sun.   This is the first public release of a video codec specification with a vetted royalty-free methodology that is a determined, bottom-up invent-around of the royalty-bearing interlocking and cross-coordinating set of MPEG codec licenses – MPEG-2, MPEG-4, and h.264/AVC (an orchestrated complex of licenses managed through the same license administrator, MPEG-LA, which is owned and controlled, no surprise, by MPEG patent holders themselves).

But do royalties on things like video codecs really matter?  Many people don’t even realize that royalties like these exist, or assume they are a just a nuisance cost-of-business borne somewhere in the value chain.

But consider — MPEG and their related royalties are:

Big. Think on the order of over $2 billion per year, on some one billion or so MPEG integrated circuits a year and growing.  That’s royalties, not sales, so better to think of them on the profit side of the business equation — and that’s on the order of ten percent of the entire profit of the world’s 37 largest consumer electronics companies, calculated from a recent Deloitte study of consumer products industries.  And given that consumer electronics manufacturers are in a notoriously thin-margin business (according to the Deloitte study, average net profit margin of 3.3%, the second lowest profit in all consumer products industries, ahead of only tires) — the $2.50 per MPEG-2 device royalty alone likely exceeds the manufacturer profit on vast numbers of consumer electronics products.

Applicable across the entire value chain of devices, content, and encoders.  Consider also the $100 million or more a year in royalties of 3 cents on “packaged content” on 90% of all DVD discs produced, collected through disc duplicators.  Or the reported 100M Euros in royalties in 2005 on MP3.  Or the temporary exemption on “Internet broadcast” royalties — expiring December 31, 2008 on MPEG-4 (perhaps to the chagrin of MPEG-4 licensee DiVX, who noted in a recent SEC filing “Our license agreement with MPEG LA, under its MPEG-4 Part 2 Visual Patent Portfolio will expire on December 31, 2008. MPEG LA has the right to renew the license agreement for successive terms of five years, upon notice to us.”), and expiring December 31, 2010 on AVC/h.264.

Applicable to you (and virtually everyone else on the network connected planet).  Just check your iPhone EULA (“The iPhone Software and iPhone Software Updates contain AVC encoding and/or decoding functionality, commercial use of H.264/AVC requires additional licensing.”) or Flash licensing restrictions:

“The end-user license for Flash Player allows users to play back H.264 content for their own noncommercial use. Commercial applications of Flash Player to decode H.264 video may require a separate license…. Usage categories that may require a license and involve royalty fees include advanced video coding products, title-by-title video, and subscription video among others. Most categories apply to commercial use and implementation, but some are more broad”.

Sure, some will assert that this doesn’t really apply to “you”, just figure out a clever “not-me” work-around — but to quote Russell Long and countless others:  “Don’t tax you, don’t tax me. Tax that fellow behind the tree.”

Gosh, one can see how one study of consumer electronics patents/standards commented: “Standardization activities are political negotiations and not a forum for assessing which technologies excel over others”.

So here’s to hoping that OMS Video will add to the growing but still under-the-radar open media movement, including Xiph, Dirac, and more to come.  Please take a look at the OMS Video specification and provide comments if you are so inclined.