Original URL: http://www.theregister.co.uk/2005/05/05/gsma_rejects_phone_drm_royalty/

GSM Association rejects revised phone DRM rates

'Think again, MPEG Licensing Authority'

By Tony Smith

Posted in Mobile, 5th May 2005 13:51 GMT

Revised DRM licensing terms offered by the MPEG Licensing Authority (LA) remain "unacceptable", the mobile phone networks' club said yesterday.

The GSM Association, which represents more than 660 networks which handle more than a billion mobile phone users worldwide - said it had "met with dismay" the revised royalty regime.

In January, the MPEG LA suggested to the Open Mobile Alliance (OMA), which maintains technology standards in the mobile phone world, a $1 per handset and one per cent of the cost of each transaction royalty for the use of DRM technology patents it administers on behalf of ContentGuard, Intertrust, Matsushita, Philips, Sony and others.

Last month, however, the GSMA went public with its view that such a model was unworkable, calling the scheme "impractical, excessive and short-sighted". In short, network operators believe it's too darn expensive.

In response, the MPEG-LA suggested an alternative: pay 65c for each DRM-enabled handset and cap the per-user royalty at 25c a year. Since most DRM-protected downloads are likely to cost several dollars a pop, each user needs only make one to two downloads a year to hit the limit. Given the success of Apple's iTunes, punters are likely to download rather more than two items a year.

The GSMA still thinks the cost is too high, and warned that, unless prices are cut, MPEG-LA risks operators dashing off and acquiring a range of different DRM systems, making the phone content download market as fragmented and as broadly incompatible as are digital music downloads.

<pIt wants an "open... content market [to] drive the flow of rich multimedia content across the mobile world", as Frank Boulben, executive VP for brand and consumer marketing at Orange, put it, in a statement. ®

Related stories

Dutch plans for iPod tax could kill MP3 industry
A Yahoo! phone? Nokia can help
MPEG LA cuts mobile phone DRM tax
Phone DRM too expensive, say carriers
DRM comes to mobiles
Mobile DRM levy hits operators where it hurts
Phone biz agrees on $1 DRM levy