The licensing terms, announced in February, require content providers to pay a royalty for every second of MPEG-4 video downloaded, streamed over a network or distributed on prerecorded media. In Apple's view, this "pay-per-view" fee structure is a lousy match for the business realities of streaming multimedia. Others seem to agree: When Dolby announced its licensing terms for MPEG-4 Advanced Audio Coding in March, such distribution fees were conspicuously absent.

Apple's rejection of the proposed licensing terms is particularly notable because of the computer maker's longstanding involvement with the MPEG-4 standard. For example, the MPEG-4 file format is based on Apple's QuickTime file format. When one of MPEG-4's loudest cheerleaders balks at the licensing terms, it suggests that the process of bringing the standard to market has gone horribly awry.

Indeed, the controversial licensing terms are but one of the complications awaiting would-be MPEG-4 implementers. Despite the common perception that MPEG-4 is a single standard, it is more like a library of standards. The video standards alone describe 19 "profiles," each with a unique combination of algorithms, resolutions and so on. This complex scheme makes it difficult for system designers to assess the costs of implementing MPEG-4, including the licensing cost. The recently announced MPEG-4 video license, for example, covers only two profiles; implementing other profiles requires negotiating with as many as 19 patent holders.

Despite the uncertainty surrounding MPEG-4, it has already gained acceptance in many streaming-media applications. However, as Apple vice president Phil Schiller said in a recent interview, "This is a nascent industry; we're trying to kick it off, trying to get it started, and we don't need to put roadblocks in the way for people-[these royalties] would be a major roadblock." Indeed, one must wonder whether the proposed video royalties will kill the MPEG-4 goose before it lays a single golden egg.

Jeff Bier is the General Manager of Berkeley Design Technology Inc. (www.bdti.com), the DSP Technology Analysis and Software Development Company. Kenton Williston of BDTI contributed to this column.