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With the sales of digital televisions already growing, a sudden removal of digital television in the wake of a broadcast flag defeat would result in a major backlash against the networks.

“Can you imagine the anger if the people who bought digital sets were told that no more digital programming would be available,” says the excutive.

The markets show that consumers enjoy and expect certain freedoms when interacting with television.

Tivo this week announced that it had surpassed three million customers, well over its previously stated goal. Some of that boost may have come from the product’s price decrease, but it’s difficult to discount the new TivoToGo program, which allows subscribers to move recorded programs over to laptops or even burn DVDs to bring with them.

If the broadcast flag passed, it would be Hollywood – and not Tivo engineers – that would decide if this was allowable. 

Another variable that could complicate the broadcast flag debate is the growing number of mobile phones that stream video from television feeds and allow subscribers to watch highlights of television shows. Mobile carriers desperately need consumers to glom to these data-intensive services to keep their revenue numbers growing. If Hollywood appended onerous usage restrictions on such content, it might stifle user interest and adversely affect the industry’s outlook.

For consumers, the passage of the broadcast flag would mean the content owners would dictate the ability to record shows, share them with friends, or back them up onto a computer. Most of these activities are allowed under today’s “fair use” provisions.

“Once again, that the entertainment industry is trying to tell you what you can do with your own machines,” the EFF posted on its website.

And if previous DRM schemes offered by content owners are any indication, this group errs on the side of Draconian. In the world of digital music, for example, it wasn’t until – ironically – a computer company (Apple) stepped in with a less-oppressive DRM scheme that label-backed downloads took off.

Mark Cuban, chairman and CEO of HDNet is an anomaly – he’s a content owner, but against the broadcast flag.

“The broadcast flag is a joke,” Cuban says. “It’s completely irrelevant. It’s a power play on the part of content owners.”

Other government-mandated technology impositions haven’t fared very well. One recent example is the V-chip, enacted as a reaction to the growing concern over violence on television. But the difference is that the V-chip is controlled by the consumer, whereas the broadcast flag is controlled wholly by the content owners.

No timeline exists for when the judges must make their decision, but if they rule against the FCC, the committee can appeal or decide to drop the effort altogether.

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