Which could be disastrous. The technology of steam power was discovered in ancient Greece, but not developed because it didn't fit with the mores of the time, and remained unknown until the Industrial Revolution. Several hundred years ago, the Chinese came close to sailing to Europe and the New World. They had the technology, but turned back by Imperial decree. And now our corporate emperors want to kill off innovation to protect the valuable conditions of scarcity on which their power and wealth are founded.
In short, such a régime has the potential to impede technological development by decades if not centuries. (And the consequences will be felt all over Earth, especially if backed up with US military power, which is backed up with US economic power, which depends on "global stability". If the New Zealanders or Indonesians or someone develop an unencumbered bit-shuffling device industry, watch the high-energy particle beams from Fort Kissinger, high earth orbit, vapourise the offending facilities as if they were Iraqi penicillin factories.)
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I think it will more likely put a freeze on hardware upgrades than actually stifle innovation. The technology exists at present to do whatever D/A conversion I like on my home PC. No-one going to come storming into my house to take away my computer, so I can simply use it to do whatever conversions I want (ie. ripping a Church bootleg I recorded from Minidisc to Mp3 like I'm doing right this minute). If new PCs (or any digital device) can't do this, I do believe comsumers won't want to buy them, because ripping / burning / copying is NOT a geek activity, it's a bog-standard computer user activity (ie. ripping / encoding features in Windows Media Player / iMac that are being advertised to the general public). People stop buying hardware / software upgrades, computer industry collapses, laws are repealed.
The problem is, it's not the computer industry that's behind this, aside from a few Vichy firms such as Microsoft and Intel, it's the entertainment industry.
It is a good think watermarking analog signals doesn't work very well. Still, this is absurd. I can see the market for home-made "pirate" sound and video capture cards that would spring up if this ever became a reality, consigning another huge chunk of the American populous to be criminals.
Stopping upgrades may be impractical, due to built-in obsolescence. Computer components aren't built to last, because they're assumed to end up in the landfill within 5 years whether they work or not; therefore, they use cheaper components (such as capacitors rated for lower temperatures only, which don't last forever on a modern motherboard); consequently, computer components tend to die.
How much gear from 5 years ago do you have that still works? My Gravis UltraSound started misbehaving a few years ago, and I've had motherboards go flaky. This may push consumers to buy DRM-crippled PCs, or it may inspire an underground reconditioning industry, like with Cadillacs in Cuba.
this really does beg the question "do they know what they're talking about?". there's no way that they will be able to get every manufacturer out there to put this 'watermark' rubbish into their circuitry. and if they do, it's not going to stop anyone from building a/d or d/a circuits themselves from discrete components (resistors, transistors, etc).
But building one which can convert a high-frequency signal (i.e., a video image or such) at good quality isn't easy; and if you cannot legally sell it or distribute the schematics, few people will do it. The Mafia/Triads/Yakuza will have them, of course, and have A-D geeks on retainer, but the average shmo won't.
Though the system won't work; you can always mung the signal in the analogue domain, digitise it and then unmung it. I.e., use a RF transmitter to convert it to a RF signal and a software radio to unconvert it. I doubt the MPAA-mandated gatekeeper chips will detect watermarks in copyrighted radio spectra.
Interesting, I had never heard of this guy Heron in Alexandria who invented the steam engine as a toy apparently.
The Chinese may have made it to the Americas based on some anchors found of off the California coast and various inscriptions but I doubt they did circumnavigate the globe as was recently propsed.
But is technology really that easy to squelch? Can they stop every bedroom hacker and basement coder? I can still share mp3s despite the RIAA.