GSM Assoc Against Licensing

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The GSM Association once again blasted proposed rates for licensing anti-piracy technology, calling recently revised rates "unreasonable and unworkable." The trade association of more than 600 wireless operators rejected the latest royalties proposal from licensing clearinghouse MPEG LA for digital rights management (DRM) software. MPEG LA's most recent plan called for phone manufacturers to pay 65 cents per device and for operators to pay 25 cents per mobile subscriber per year for the technology.

The licensing authority lowered its rates last month after the GSMA and other industry groups balked at its initial proposal of $1 per device for manufacturers and 1 percent of every transaction for carriers. But wireless operators say even the lowered proposed royalties threaten the economic viability of the industry they are designed to protect.

While an agreement between the two is likely on the horizon, some fear the stalemate could result in the lack of a standardized DRM solution. Carriers and content providers could adopt proprietary technologies, fragmenting the digital content industry. Earlier this year, MPEG Vice President Lawrence Horn said the backlash over proposed royalties speaks to how important an open-standard DRM technology is to the market.

The study said video is likely to become "the mainstay" of 3G wireless services in the United States, becoming a $1.5 billion market by 2009. As demand for wireless video surges, though, carriers and content providers will find digital rights management issues increasingly more difficult to manage, the report warned.

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