ࡱ> @ TbjbjFF .,,' ```^DYYY8Y\Z ZZ"ZL[[[n[$[*,,,,,,RB,^[[^^,[[A.ddd^[[.d^*dd\XD[Z ]|7eYa<(o<ܑhIBbIPDID[Z\rd\\(][[[,, )3%6c 3 High Level Group on Digital Rights Management Final Report March-July 2004 High Level Group on Digital Rights Management Final Report March-July 2004 As part of the progress in the implementation of the eEurope 2005 Action Plan, the Commission committed to establish a High Level Group (HLG) on Digital Rights Management (DRM) issues. The HLG was established in March 2004. The Group comprised participants representing the e-content value chain, including content providers, authors and rightsholders organisations, publishers and broadcasters, operators (mobile, fixed), equipment manufacturers, DRM solutions providers, research and consumers. The HLG met twice, on the 31st of March and 8th of July 2004 under the chairmanship of Commissioner Liikanen and with the participation of several Commission services. Four working level meetings were held to prepare the HLG report. On 31st of March the HLG agreed to identify the challenges related to DRM, to consolidate the views of the various parts of the value chain on DRM related issues and identify the possible ways forward. The HLG agreed to focus on the following: Interoperability requirements, including standardisation developments, for DRM to meet users expectations Acceptance and trust by users with particular emphasis on security and privacy Migration towards legitimate services The impact of DRM on existing rights management approaches, in particular the application of levies Assessment of the applications of DRM on the European markets as of today (success stories, constraints, prospects) The final report presented on 8 July reflects a consensus on basic principles and recommendations for future actions. It covers three aspects: DRM and Interoperability Private copying levies and DRM Migration to legitimate services. The Group reached a consensus on the three papers. The consumer side represented by BEUC does not support the two papers on Migration to legitimate services and Private copying levies and DRM. Consumer's trust and confidence aspects could not be addressed in a comprehensive way and requires further discussion. The Commissioner thanked the members of the HLG, and in particular the rapporteurs, for their efficiency and their extremely useful work. The Commission will have to reflect on the report and assess the need for action at the EU level and launch policy initiatives if appropriate. This will be done in close cooperation with the competent services of the Commission and with Member States. For the immediate follow up, he will propose his successor to undertake the following: To make the results available online To start a wider consultation of all stakeholders on the report and to hold a workshop later in 2004. To bring the results to the appropriate fora and use it to open the debate at a high level, such as the eEurope Advisory Group or the Contact Committee To convene a follow up meeting of the High Level Group at the end of November. High Level Group on Digital Rights Management Final Report Table of content DRM and Interoperability..4 Private copying levies and DRM...13 Migration to legitimate services16 DRM and Interoperability Digital Rights Management (DRM) Definitions and Descriptions of DRM. Much of the study on DRM to date has been conducted from very specific perspectives, for example by policy makers, the content sector, ICT businesses, standardisation bodies and research organisations. Both the international and EU copyright framework provide the legislative framework in which DRMS operate. In particular, the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty require the legal protection of effective technological protection measures and rights management information which are defined terms. The EU has implemented its international obligations under both these Treaties with the adoption of the Copyright Directive and in particular Articles 6 and 7 thereof. EU data protection policy also establishes the parameters in which DRMS operate. Certain descriptions of DRM have been crafted by technologists, and thus contain references to the technical components of DRM such as cryptography, rights expressions and the like. Further descriptions of DRM written by rights holders may emphasise trusted behaviour where content is accessed according to rules that are applied reliably, in a predictable and repeatable manner. Standards bodies have also attempted to build definitions of DRM, for example CEN produced a report containing extensive discussion of different facets of DRM. A further description, often called the NIST definition (after the US National Institute of Standards and Technology) is contained in a paper written by Dr Gordon Lyon of NIST. The Role of DRM. One aspect that is frequently missed from definitions and descriptions is the enabling function of DRM in the marketplace, though this aspect is becoming increasingly apparent as DRM emerges. DRM provides the means by which different kinds of consumer services can be established at different price-points to satisfy diversity in marketplace demand. Content providers want to reach their customers in new ways, some examples of which include: Flexibility & Choice. DRM allows models such as 'a la carte download', 'subscription', 'rental' and 'preview' and meaningfully differentiates the different provisions of such alternative options. DRM provides a balance, by allowing different services at different price-points, while preventing unintended substitution among the service/price-point options. Superdistribution that is, authorised forwarding of licensed and paid content between users is another area that many stakeholders believe could be facilitated by DRM. Wider Access. Content owners envisage a future in which consumers can access content wherever and whenever they choose within a marketplace that also provides for commercial competition and payment. DRM should provide a balance, allowing content to be accessed on devices the consumer wants to use, but while preventing massive quantities of content leaking to form an unauthorised and uncontrolled free-for-all that would cannibalise the legitimate market. Obviously, for this to work, consumer devices need to first incorporate DRM support (to access the DRM content) and suitable content also needs to be available. Current Status of DRM in the Marketplace. While the technological development of DRM is becoming fairly advanced, the market development for those systems is still at an early stage. Consumers willingness to purchase content online has been illustrated in the area of ringtones, and content services based around DRM are now being rolled out, perhaps led by record producers who have digitised and licensed most or all of their catalogue. In the music sector, a horizontal tier of Music Service Providers (MSPs) is evolving, whose role is to aggregate content from different producers and to produce competing retail offerings or white-labelled stores offered via retail brands. In some but not all cases, MSPs are associated with ICT companies, who seem to have achieved early successes, sometimes tied to ancillary IT products. Although some content-protection technologies have been available for a long time (e.g. as used in DVDs), in the main consumers do not yet have devices equipped to properly make use of the services that are offered through DRM. Recent progress with computer-based services shows promise but there is a gap between these and the billions of mainstream consumer devices that do not support DRM, but to which content must still be provided. It is expected that there will be a progressive deployment of DRM in the marketplace as device and ICT providers develop further the necessary technologies and incorporate them into the wide range of consumer products. Developments with DRM and high-speed networks in the mobile sector show promise for the future, and in some cases content in the form of ring sounds, streaming and even music downloads has already been licensed to operators for delivery to consumer handsets. Secure delivery via DSL to TV Set Top Boxes (STBs) is beginning to be deployed. At the time of writing, there is a wide variety of developments among different industries, each based upon their own sector-specific characteristics, set against a general background of systems that for now provide powerful facilities that are not governed by any DRM. Music delivery and the related business is today mostly governed by proprietary standards. Scenarios for further evolution in the marketplace are set out subsequently. Standards. Standards have a fundamental role to play in establishing DRM in the marketplace. This is because standards allow different entities to create technically compatible equipment and services. It should be noted that interoperability requires more than mere technical compatibility as discussed subsequently. However, without standards neither compatibility nor interoperability would be possible. Standards can take different forms, such as open standards, proprietary standards and de-facto standards among others. In general, open standards are preferred for mass-market applications, for a number of reasons. Open standards are prepared by open standards organizations with an open process, published objectives, Fair, Reasonable and Non Discriminatory (FRND) based licensing terms (applicable where patented technology is incorporated in a standard). Furthermore open standards provide publicly available technical specifications hence any implementer can utilise the standard. There is wide consensus that open standards offers the best realistic possibility for true cross-platform interoperability of services and devices from multiple providers, conducive to achievement of true user convenience and thereby mass market acceptance of DRM enabled services. Proprietary standards can also have an important role to play. Much modern equipment such as the PC could not exist without extensive utilisation of proprietary standards. Nonetheless, open and non-discriminatory access to proprietary standards cannot be taken as axiomatic as would be the case for open standards. For this reason, open standards are preferable whenever they are available. De Facto standards are technical provisions established as the market norm through joint usage by a majority of stake holders without obtaining formal approval by standardisation bodies. Many ICT technologies have become de-facto standards. Open standards have many advantages over de-facto standards, not least that open-standard specifications are stable and have a proper maintenance process. Cross-industry standardisation is exemplified by OMA, MPEG and DVB. These exemplify standard-setting conducted within an open standards framework. The OMA DRM V2.0 specification is available now, and MPEG 21 recently completed important DRM-related standards on the MPEG 21 Rights Data Dictionary (RDD) and Rights Expression Language (REL). DVB is currently working on an authorised domain (AD) concept which represents the personal space in which content consumption is applicable (e.g. : living room hi-fi system, portable mp3 player, car audio systems can be construed as being one form of AD in which content may circulate freely). DVB will not specify a complete commercial system but will put forward rules and interfaces so as to enhance the interoperability between commercial DRM systems. Presently, although standards bodies typically provide liaison between each other, standards geared to different market sectors are arising in a more-or-less independent manner. As standards evolve, it is expected that they may become more widely applicable. For example, OMA envisages further evolution that would make OMA DRM standards available for implementation on a much wider range of devices beyond mobile handsets. Convergence of technology - possibly leading toward a common digital base for content and connectivity between devices - would also make standards more widely available, e.g. available between fixed and mobile sectors. Governance and Trust Management. DRM encompasses technology aspects and security aspects. In order to maintain the integrity of security, trust models are required as well as standards. Trust models provide a mechanism ensuring overall security, and may encompass mechanisms such as: Contractual terms, such as technology licensing (e.g. patent licensing) Technical mechanisms, such as digital certificates Compliance testing verification of correct implementation details re. security Legislative legal framework for governance An important paradigm is the Trust Authority, an entity that provides infrastructure for trusted systems, usually in terms of key-management in the form of digital certificates. The availability and stability of the infrastructure are vital, and may necessitate a survivability solution in case of insolvency. Renewability and/or revocation of keys may be provided, for individual devices or device classes. Compliance is also important. A compatible but non-compliant device would undermine all the interoperating DRMs. Indeed compliance will be especially important as interoperability becomes the norm. Interoperability cannot be at the expense of eroded security, say as each new interoperable device provides a yet weaker interpretation of the DRM. Compliance within a system can be enforced through various mechanisms: Legal protection of Technological Protection Measures as provided in the Copyright Directive. Contractual terms related to technology licensing or similar. This would usually involve conditions, attached to technology licenses, that cater for proper implementation of the technology. This approach may not be effective against non-participating parties, who produce a non-compliant device. Together, these two approaches may both be applicable in different scenarios. It is challenging to devise open standard solutions that can simultaneously ensure that security is not eroded. However, appropriate use of cryptographic techniques such as key-management or strong licensing terms, for the technologies used within or alongside open standards, offer a means of ensuring that implementers abide by compliance rules. Certification processes and compliance test procedures should be open and transparent. Evolution and Timeline. DRM deployment is starting with the emergence of certain devices that support certain new services. The next stage of evolution will be for devices and services from different providers to be able to be used interchangeably, whilst maintaining an overall level of functionality and security. This is the goal of so-called interoperability and may be based on cross-industry standards for DRM. It is envisaged that DRM will eventually be used to authorize consumption within one users personal networks of devices. Several different initiatives termed authorised domain or personal area network or digital home refer to a concept that enables a consumer to receive multiple different services and enjoy these via multiple devices around his/her home, car etc. Technologically this goal is challenging but initiatives including DVB and Digital Living Network Alliance (DLNA) are actively seeking solutions. At some point along this evolutionary path, it can be seen that technology will reach sufficient maturity and accessibility to consumers in all their usage scenarios - that DRM-enabled services could be said to have reached the mass market. Presently this is not the case, and the reach of digital delivery extends only to a small niches as e.g. mobile content delivery and settings in which there coexists broadband internet, a multimedia PC and an attractive content offering at a price and use model meeting consumer expectation. Around 100 legal services have been established in Europe but the use-model is hampered since few devices beyond the computer support these services. There also needs to be a willingness by the consumer to forgo freely available infringing services in favour of the legal services. Interoperability In understanding what is meant by interoperability a useful starting point can be to consider the established and clearly understood term compatibility. Compatibility, in the technical sense of the word, is defined in terms of pieces of machinery, computer equipment etc, capable of being used together without special modification or adaptation Interoperability is a term that encompasses more than simply whether parts can work together, and certainly extends to the notion of the proper overall functioning of all elements of interoperating systems. While noting that DRM is the province of the Copyright Directive as opposed to the Software Directive, recitals from the latter contain certain provisions that do have a bearing on DRM. In the context of DRM the term interoperability encompasses consistent functioning of the overall system including security and access, such that the system is able mutually to use information in the form of usage rules, content and technical measures in all the ways in which they are intended to function. This would apply even when content from different interoperable services is used and when such content is used on different interoperable devices. For the consumer, interoperability means he can choose different devices and use them with different services. For the content producer, or content aggregator interoperability means he is not locked in to one distribution channel that forms a gatekeeper to the marketplace. For the device and ICT developer, interoperability means that his products can be used with different content services and that a gatekeeper does not form around a specific DRM technology. Interoperability also has a role to play in broadcast and cable networks. For the television channel or bouquet operator or content editor, interoperability means that he is not locked into one content provider and/or distribution network. Furthermore DRM systems relating to broadcasting should be fully compatible with Free-To-Air (FTA) unencrypted, Free-To-View, Pay TV, and other broadcasting business models. Why isnt the interoperability problem already solved? There are clear commercial concerns, discussed subsequently. Moreover, the technical issues are themselves highly challenging. It is difficult enough to design a good DRM, let alone to design different DRMs that are interoperable. All the industry sectors agree that industry-led standards-based solutions offer what is seen as the best eventual outcome, but standards take time to develop and implement. In the mean time, partial solutions towards interoperability can be envisaged. During meetings convened under the DRM HLG, a list of four different scenarios was provided and developed as: Scenario: Islands defined by proprietary systems. In this case, a partial solution can be achieved if content providers license their content to multiple delivery channels/platforms in appropriate formats, albeit these non-interoperable channels/platforms would form a fragmented marketplace overall. In terms of a timeline, this scenario is where the industry currently is content providers have licensed most or all of their catalogues to different competing but incompatible systems. Scenario: De-Facto Standards. One or two proprietary systems become de-facto standards and dominate the market so that a form of interoperability is achieved within the closed system(s) that result. In terms of a timeline it does seem as though there are just a few proprietary ICT-based platforms dominating the market. However, many industry participants are also working on open DRM standards which could - if widely adopted and supported in products either as the sole solution or at minimum alongside proprietary solutions - eventually break down the lines drawn by present proprietary solutions. Scenario: Interoperability Framework. This is envisaged as a solution where device makers incorporate support for multiple DRM platforms, to achieve an apparent interoperability. An enabling technology is flash ROM and many devices have been seen that can be upgraded in the field. In time upgrading to support DRM or multiple DRMs may be possible albeit subject to cost and complexity constraints. An alternative would be the provision of transcoding capabilities between different DRM formats. In general, transcoding from a DRM format to an unprotected format is not acceptable, as this would fundamentally undermine DRM security. Instead, this approach could be seen as multiple DRMs being supported on one machine with a translation engine that converts content between DRM formats, or via a back-end infrastructure service that provides the correct DRM format to the desired device when needed assuming the correct level of digital rights. Presently the only significant practical progress down this path to interoperability has been in the area of protected television services. Scenario: Standards-Based Convergence. This would involve the adoption of common architectures defined by international standards. Open standards would carry the added benefit of allowing any implementer access to the necessary technology. In terms of a timeline, core standards such as MPEG21 Rights Expression Language (REL) and Rights Data Dictionary (RDD) are now complete. Standards developed in different areas (such as the Open Mobile Alliance (OMA) DRM for mobile devices) may become available for implementation also on other platforms, breaking down the borders between different platforms. Important standardisation work is done or is imminent, but implementation work still has to be undertaken before standards-based DRM systems begin to appear in the marketplace. Participants from all sectors agreed that the timescale to see meaningful progress towards mass-market deployment of interoperable solutions would likely be in the range two to five years, and more than one of the above scenarios may be simultaneously evident. It is natural that in an early phase, there are several competing alternatives. But for achievement of the near universal interoperability needed to produce mass market benefits, at least one technology should be supported in most devices. Enabling Factors The main factors that would enable the mass-market delivery of new DRM-based interoperable services are seen not necessarily in order of priority as: Technology baseline (e.g. broadband internet, 3G mobile, multimedia PC, TV Set Top Boxes/Digital Integrated Receivers etc) DRM solutions (to allow different service options at different price-points). Profiles may allow solutions to run on devices offering different capabilities or resources. Content. The availability of a wide range of quality, licensed content, offered with appropriate usage rules and price points is one key aspect of DRM solutions. Trust. This concept has been framed by MPEG work in terms of assurance of predictable behaviour and is important for rights holders, technology companies and consumers alike, in order to develop mass markets. DRM should enable high levels of trust, if properly implemented. A well-defined trust or compliance framework may help. Interoperability solutions (different services and devices used interchangeably) Core Standards (such as REL). Interoperability can be achieved by incorporating one standard into multiple platforms or by bridging between the different standards adopted for different platforms. The personal Authorised Domain concept. Consumers can utilise services across a range of CE and ICT platforms, around the home and in the car etc. but without the content being accessible widely (outside of the specified domain) without authorisation. Access to content can be unlocked on compliant devices in the Personal Domain, possibly by techniques such as passwords, tokens (e.g. through a card or chip embedded in a persons mobile phone), or within an area (e.g. by DTCP, Bluetooth etc). Security. Present consumer-grade devices such as mobile phones, conditional access TV etc show that robust security solutions can be deployed at a cost commensurate with mass-market adoption. Renewability is one key factor, necessary to maintain security on a long term basis. Deployment of Standards. Technologies and standards are being developed and need to be implemented on many device categories including the PC, mobile and other devices. Ease of Use. Systems that are easy to use can be developed to make significant complexity manageable that would, without careful engineering, impact adversely on the user experience. Fortunately there are examples from the mobile industry, the IT industry and other sectors, showing that it is possible to implement complex technologies in a manner which allows users to control and use the technology with ease. Selection of content and definition and interpretation of usage rules are other areas in which ease-of use is of primary importance since users need to understand and manage the underlying system complexity in these areas. Again, the evidence is mounting to show that industry is responsive to marketplace necessities and is already offering many straightforward and user-friendly usage options at different price-points. Issues Obstacles to the proper and complete development of a DRM interoperable market include (in no particular order of priority): Non-compliance. Lack of governance structures such as a compliance framework, as well as failure to stringently meet compliance criteria, may result in a proliferation of non-compliant devices that would undermine the DRM proposition. Timeline. The time taken to implement solutions and get them out into the consumer marketplace can be significant. Control Point. DRM must not be allowed to become a commercial or technology licensing control point. Examples that need to be considered are as follows: domination of single technologies due to network effects and first mover advantage, inflexibility in technology licensing terms, private technology licensing terms given carte blanche via regulatory mandates, inappropriate technology license terms that expose adopters confidential information to market competitors. It would seem that legal tools for solving these issues are already available, such as specific trade regulations or competition laws. Appropriate use of standards also has a role to play. DRM must fit business models and not the opposite. This is not only true for mass markets works but also for works created for niche markets such as publishing products. It is up to the rights holders to build balanced business practices with their customers. 5. Conclusions and Recommendations It must be acknowledged that market forces are the primary driver of DRM and interoperability solutions, but that time is needed. Nonetheless, action is needed on several fronts: Industry: Industry to work further on open cross-platform DRM systems, based on work in open industry consortia such as MPEG, OMA, DVB and others. Industry to engage in discussions on how to integrate open and proprietary DRM solutions in a cross-sectoral interoperability framework. Industry considers that open standards are the preferred solution, but not to the exclusion of other approaches. It is important that DRM ensures and enhances consumer choice and competition. Commission: Commission to foster deployment of open standards by continuing to support the work of MPEG, OMA, DVB and other relevant standards bodies and other appropriate fora including European Collaborative R&D programmes. Commission to engage in discussion with stakeholders, to address potential issues relating to DRM compliance mechanisms. Possible options for further consideration may include: A balanced strategy that simultaneously ensures that the risk of non-compliant devices is neutralised while interoperability is delivered Certification with open, transparent and clear criteria Governance of trust authorities Member States: to foster interoperability, e.g. by Continuing to support the standardisation processes that will create the required open standards. Ensuring that where devices implement DRM, secure DRM standards will not be undermined by non-compliance. At national level ensuring that the enforcement of anti-piracy measures is effective. All stake holders should work together so that DRM systems enjoy an incentive to be supported and implemented. Private copying levies and DRMs At the first meeting of the High Level Group (HLG) on Digital Rights Management, the issue of the relation between DRMs and private copying levies was identified as one of the main issues for discussion. As the highlights of the 31 March 2004 meeting of the HLG indicate, the operational conclusions of that meeting include the issue migration towards legitimate services, and their implication for existing rights management approaches, in particular the application of levies. A first discussion on the issue of the impact of DRMs on levies took place at a second working level meeting on 9 June with further discussions in subsequent meetings. This paper aims to identify a few key principles on which the DRM HLG members can agree. Such principles can serve as a guide to discussions on this issue, against the background of the Directive 2001/29/EC and in view of the current situation of the market. Private Copying and Levies Private copying levies were introduced in the 1960s in Germany and have been since established, on a different scale, in many European countries. They were introduced to compensate right holders for the limitation to their exclusive right of reproduction as regards to reproductions made for private use. Such limitations to the reproduction right, and the subsequent establishment of levies, emerged in view of the de facto non- enforceability of the reproduction right. The scope of the private copying limitation has now been harmonised to some extent (although its establishment in national legislation is not mandatory) at EU level in the 2001/29/EC Copyright Directive. Member States may allow for a limitation to the exclusive reproduction right in respect of reproductions on any medium made by a natural person for private use and for ends that are neither directly nor indirectly commercial, on condition that the right holders receive fair compensation which takes account of the application or non application of technological measures (article 5.2 (b)) The exception shall only apply if compatible with the three-step test (Article 5.5). Copies (even if made by natural persons for private ends) that are incompatible with the three-step test do not fall under the private copying exception. Private copying is a limitation to the exclusive reproduction right of authors, performers and producers. As such it has to comply with the three step test, in particular private copying exceptions cannot prejudice the normal exploitation of the work or the phonogram or videogram Levies cannot be used to justify acts that constitute an infringement of rights. Levies are not and were never intended to constitute a mechanism to compensate for piracy Levies and technological measures Fair compensation for private copying has to be determined on the basis of the particular circumstances of each case. One of the criteria to evaluate such circumstances can be the possible harm to the right holders. The level of fair compensation has to take full account of the degree of use of technological protection measures (recital 35). A priority of all stake-holders is the effective deployment and legal protection of DRMs, both in the context of electronic distribution and physical formats. DRMs are key to the fight against piracy and the development of new on-line services and new formats. The way forward is a system based on existing exclusive rights backed by technologies that ensure a secure environment where such rights can be licensed and enforced. Alternative compensation schemes or similar measures are clearly not the way forward for the dissemination of content in digital networks and for the development of new and innovative services DRMs establish usage rules and are a useful tool to fight piracy. In this context, double payments to the rightholder (payments on the basis of a levy and payments on the basis of a licensed use) must be avoided. It is clear that levy systems will have to take into account the application or non application of technological measures. The key issues of adapting existing levy systems are where, when, how, and to what extent to adapt the systems. Important divergences exist among the different interested parties regarding these key issues. The discussion is further complicated in view of the fact that levy systems were never harmonised at EU level and important differences exist at national level regarding the existence or not of a levy, the application of the levy to equipment and/or to media, the level of levies, and the methods to fix and review levies. The following could be important elements to take into account when adapting existing levy systems: Assessment of the situation needs to be done on a case by case basis in the context of specific devices and services, based on objective, transparent and non-discriminatory criteria. The situation as regards to application of DRMs and the amount of private copying effectively taking place in the context of such devices and services needs to be taken into account. The judgement of whether DRMs have reached a widespread uptake in the marketplace is an important element for stakeholders. Ensure a competitive European market promoting a favourable environment for the development of on-line legal content and services. Promoting Migration to Legitimate Services on the Internet Encouraging the migration of consumers from unauthorized file-sharing services to legal online services is vital to the creation of a thriving legitimate market on the internet. Legal online services are beginning to take hold in Europe and healthy competition is emerging as scores of content companies, mobile carriers, broadband service providers and retailers vie for their place in the online market. The increasing uptake of legitimate services in Europe is evidence that consumer demand for legal content on the internet is strong. Content protected via digital rights management (DRM) delivers high quality files in convenient ways. Forrester Midem 2004 forecasts say that the legal download volume of content (music, video clips and movies) will increase 1000% by 2007. The internet has brought with it an exciting range of opportunities for European industry and creative community in terms of developing new business models as well as much greater flexibility for consumers. Content will be available independently from distribution channels (broadband/mobile channel convergence) and from the device used. Delivering content over mobile networks is a complete new and additional business for content owners and an attractive new business of mobile network operators who are used to deal with large numbers of customers while being respectful of privacy, data protection and access control requirements. Freedom from viruses and spam as well as an existing billing system are other advantages of mobile networks, no doubt contributing to the rapid expansion of ring-tones into a multi-billion Euro business. High-speed mobile data services will also open up an opportunity for further content delivery including music and video. Although the development of the online market is well underway, its progress has been seriously hampered by the proliferation of illegitimate sites and services and massive online piracy. Online piracy takes two dominant forms: distribution of files from unlicensed internet sites; and peer-to-peer traffic on file-sharing services. These sites and services enable users to distribute and exchange digital files - such as film, computer games, music and pictures without being authorized and/or paying for them. These services do not invest in developing content. They make millions of euros from selling online advertising and bundled adware or spyware on the back of content taken from copyright holders. There were an estimated 800 million illegal music files on the Internet in June 2004. Illegal file-swapping has resulted in loss of investment in content creation, declining sales in the legitimate market, thousands of lost jobs and lost tax revenues for EU governments. In an online environment saturated with unauthorized services and content, it is essential that space is cleared for new legal services to flourish. Stakeholders call on the EU Institutions and Member States to reflect in their policy positions that copyright abuse and unauthorized file sharing of copyright content is unacceptable and will not be tolerated. Accelerating consumer migration to these legitimate services crucially depends on: Developing high awareness among consumers that making content available on the internet without permission is illegal. This requires an unequivocal political commitment on behalf of EU Member States and EU institutions, along with ongoing educational and information programmes to raise awareness of the damage done to culture, content rightsowners and industry by online piracy. Use of technical protection to ensure a secure and user friendly environment for the development of legitimate services. Interoperability of media solutions (formats and DRM) from multiple vendors needs to be achieved so that users can rely on the assumption of being able to consume the services and content they may choose from the consumer electronics equipment available to them. Market actors should harness the ability inherent in DRM of not just preventing unauthorized uses but also of enabling new business models in service and content provision. The content and distribution sectors have begun to experiment with new distribution, pricing and revenue models and will eventually settle on the ones best suited for mass-market consumption of content over connected devices and networks. The DRM-enabled ecosystem must be supported by appropriate trust models providing for an efficient and secure mechanism to ensure that the integrity of the system is maintained from a security standpoint. Robust anti-piracy enforcement to help clear space for legitimate services. This may include action directed at unauthorized file-sharing services. Active promotion of legitimate services online. While customer numbers in Europe grow, awareness of legitimate services is still fairly low. There is more work to be done in promoting awareness among consumers of legitimate alternatives online. Finally, it should not be forgotten that building a successful legal online business is a far more complex undertaking than the setting-up of unauthorised on-line distribution models a fact that is little understood outside the sectors involved. This process ranges from the most basic work such as the digitising of content to the need to develop consumer-friendly DRM, establishing usage rules (which in itself requires clever and costly technological solutions) and secure payment systems, to name just a few of the necessary steps. In addition, massive piracy on the internet has made it difficult for legal services to break through and has significantly increased the economic risk involved in these services. A thriving European environment for business, culture and consumers will not be built on the back of illegal content. Cooperation on DRM technologies and anti-piracy actions can create a valuable market place for many sectors. An active political commitment from the European Commission and the Member States for the protection of content delivered via DRM is the way forward in the context of the legal framework, most notably the Copyright directive 2001/29/EC and the directive on the Enforcement of Intellectual Property Rights.  COM (2004) 61 of 03.02.2004 Connecting Europe at high speed : recent developments in the sector of electronic communications  Members of the HLG DRM included: GESAC , IFPI, Vivendi, Eurocinema, FEP Federation European Publishers, BBC, France Telecom, Vodafone, Fast Web, Philips, Nokia, Alcatel, Hewlet Packard, Siemens, New Media Council and BEUC. IFPI, Philips and HP have been the rapporteurs of the Group.  WCT (Article 11 and 12) and WPPT (Article 18 and 19) WIPO   HYPERLINK "http://europa.eu.int/information_society/topics/multi/digital_rights/doc/directive_copyright_en.pdf" http://europa.eu.int/information_society/topics/multi/digital_rights/doc/directive_copyright_en.pdf and see art. 6  See for example Becker et al (eds) Digital Rights Management, Springer-Verlag 2003. Beyond technical descriptions, this reference also contains further views, e.g. from lawyers, economists etc.  CEN DRM report:  HYPERLINK "http://europa.eu.int/comm/enterprise/ict/policy/doc/drm.pdf" http://europa.eu.int/comm/enterprise/ict/policy/doc/drm.pdf  The NIST definition:  HYPERLINK "http://www.itl.nist.gov/div895/docs/The%20Internet%20Marketplace.pdf" http://www.itl.nist.gov/div895/docs/TheInternetMarketplace.pdf  Without prejudice to the BEUC Position on the use of Technological Protection Measures.  In the context of contractual approaches to compliance, the phrase non-participating parties describes entities who do not license the technology and who are not bound by terms governing proper implementation.  In general, music and video downloads to mobile devices is presently a niche but is expected to grow rapidly.  Compatibility: Definition from Collins English Dictionary  Software Directive:  HYPERLINK "http://europa.eu.int/eur-lex/en/consleg/pdf/1991/en_1991L0250_do_001.pdf" http://europa.eu.int/eur-lex/en/consleg/pdf/1991/en_1991L0250_do_001.pdf  Without prejudice to Article 5.2.b of the Copyright Directive  Figures from IFPI, the organisation representing the recording industry worldwide, June 2004  In particular, trust models may provide a compliance regime to ensure adherence to standards, features and functions to establish a predictable level of robust implementations. Trust models may also provide techniques to manage the generation and distribution of secret keys and corresponding certificates: a well governed root source of trust for the key distribution system; and minimising the risk of compromised keys. A revocation mechanism may also be provided to deal with compromised or rogue devices. 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