The government is proposing that devices (consumer electronics, computers, software) manufactured after a certain date respond to a copy-protection signal or watermark in a digital video stream, and pass along that signal when converting the video to analog. The same goes for analog video streams, to pass on the protection to the digital video outputs.
The technology Congress is proposing (VEIL) is derived from one that originated with assorted interactive Batman toys that allowed the toys to respond to Batman television shows or videos. How cool—at least for toys.
So, essentially, the government wants your future TV, TiVo, computer, cell phone, Final Cut Pro, (input your favorite analog signal viewing / converting device here) to respond to the Bat Signal.
If only the content industry would concentrate on developing business models that served their customers, rather than screwing them via generous political donations.