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AMSTERDAM (Reuters) - A powerful group of mobile telecoms operators on Friday called for lower prices for essential anti-piracy systems, warning that high royalty payments may stifle the markets for digital music and video.

The mobile phone industry's Open Mobile Alliance (OMA) has developed an open standard for anti-piracy software, but the technology used by the standard is too expensive, said the GSM Association of mobile operators.

The association threatened to abandon the open standard and called for new, cheaper digital rights management (DRM) systems, although this could mean fragmentation that would prove frustrating for consumers.

Without an open standard, consumers would lose the ability to play any digital track or movie on any device.

The operators' complaints follow similar grumbling by manufacturers of mobile phones and consumer electronics, who told Reuters in late February that a $1 royalty per mobile device was too high a price just to protect digital music and video against illegal copying.

They said they would not be able to recoup that amount with revenue from digital entertainment.

Operators would also have to pay a percentage of the price of a download, which could mean a 1 cent royalty fee for a $1 song transferred onto a mobile phone.

CUT ROYALTIES, PLEASE

The pricey anti-piracy technology is managed by the MPEG LA group, which pooled essential patents owned by InterTrust and ContentGuard, two small but powerful digital rights management companies, along with consumer electronics giants Sony Corp and Matsushita Electric Industrial Co Ltd from Japan, and Philips from the Netherlands.

"The GSM Association believes that members not only view the 'per device' fee, as proposed by MPEG LA, as unreasonable and excessive but they also consider the 'per transaction' fee as unworkable in the market," the association said in a statement.

"Our board understands that members are being forced away from the OMA DRM standards by this unworkable licensing scheme," said Craig Ehrlich, the association's chairman.    Continued ...

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