Los Angeles (California) - Responding to member company Hewlett-Packard's requests for the adoption of mandatory managed copy and an XML-based interactive layer, the Blu-ray Disc Association late yesterday apparently agreed to support MMC, but seems determined to continue backing a version of Java for its interactive functions.

Maureen Weber, HP's general manager for personal storage, told Reuters yesterday evening that this may not be enough, and her company may still be willing to make good on its plan to adopt a neutral stance and publicly back both next-generation high-definition formats simultaneously.

A spokesperson for the BDA characterized the group's decision as a partial victory for HP, adopting MMC but deferring judgment on the matter of the XML-based iHD layer, opting instead to continue support of Java-based BD-J for now. Other Blu-ray members have suggested it may be possible for the group to back both interactivity formats, enabling studios and content providers to include content using one or both layers. But in an interview with TG Daily three weeks ago, HP's director of strategic alliances for optical storage, Josh Peterson, told us the iHD support issue would be critical for his company.

HP's concern centers on royalties. The iHD layer, his company learned from Microsoft, would be part of that company's next-generation operating system, Windows Vista. Manufacturers such as Dell and HP which pay royalties to Microsoft already for Vista, are automatically approved for iHD. Adopting BD-J would mean paying a second set of royalties, probably to Sun Microsystems if not another licensing body, which would mean substantial increases in PC manufacturers' costs for supporting high-definition video, Peterson told us.

The royalties issue is so significant, Peterson added, that if HP were to adopt a neutral stance, other PC manufacturers in the BDA could be persuaded to join the company. Peterson refused to drop names, but the other two major PC manufacturers in the BDA are Dell and Apple.

Also at issue today is the BDA's apparent adoption of mandatory managed copy. When Warner Bros. made its decision to back both formats simultaneously late in October, the studio's senior vice president for marketing management, Steve Nickerson, told us Warner Bros. would support a managed copy system that enabled the studios lee-way to determine which discs a customer could copy, and which could not be copied. Based on definitions currently worked out by the lead engineer of the managed copy standard for both disc formats - which happens to be Microsoft, now a backer of HD DVD - Warner's idea of managed copy is contrary to the technical definition of "mandatory" in MMC. This revelation, HP's Josh Peterson told us earlier, was one of two that led his company to dramatically change its stance, and request the BDA to take a stand in support of MMC.

Since our interview with Nickerson was published, a Warner Bros. spokesperson contacted us to say the studio disagreed with our wording of the headline, "New Blu-ray member Warner Bros. would support iHD layer, oppose mandatory managed copy." The spokesperson said Warner supported MMC the way they understood it to be, which is that the mandate in question guarantees the studios' capability to decide which discs cannot be copied. In the AACS copy protection scheme currently adopted by both Blu-ray and HD DVD, an Internet-based intermediary called the "clearing house" processes live requests by consumers' disc players for authorization to make copies. Nickerson told us his understanding was that the minimum contract that a consumer should be offered, under the system as Warner Bros. understands it, includes the ability to make backup copies. But the terms of that backup agreement, he said, should be set by studios, not by default.

So based on yesterday's announcement, and in the absence of a formal statement from the BDA this morning outside of its proclamation through Reuters, it is unclear at this time whether the BDA is adopting MMC as Warner Bros. defines it, or as Microsoft defines it. Thus, while the BDA may characterize yesterday evening's decision as a win for HP, it may require a precise judgment of the underlying specifications of the agreement - if, in fact, there are any - to determine whether HP's request was granted "in the letter" as well as in spirit.

Stay in touch with TG Daily for the latest information on the Blu-ray announcement and HP's response.