[opendtv] News: Antipiracy Rule for Broadcasts Is Struck Down

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
  • Date: Mon, 9 May 2005 09:03:56 -0400


May 7, 2005

Antipiracy Rule for Broadcasts Is Struck Down

WASHINGTON, May 6 - A federal appeals court handed a major setback to 
Hollywood and the television networks on Friday when it struck down 
an antipiracy regulation requiring computer and television makers to 
use new technology that would make it difficult for consumers to copy 
and distribute digital programs.

The unanimous ruling by the three-judge panel, in an important case 
at the intersection of intellectual property and technology, was a 
stinging rebuke for the Federal Communications Commission. The court 
said the commission exceeded its authority when it approved the rules 
in 2003.

  It was a significant victory for libraries, consumer groups and 
civil liberties organizations. They had maintained that the 
regulation, known as the broadcast flag rule, would stifle innovation 
in technology and make it more difficult for consumers and users of 
library services to circulate material legitimately.

Although an appeal is possible, lawyers involved in the case said the 
fight would shift in the near term to Congress, which is already 
weighing legislation. Hollywood executives and their lobbyists warned 
that if the rule was not resurrected by Congress, studios and 
broadcasters would sharply limit the digital programming available 
over the airwaves, focusing instead on channels limited to cable and 
satellite services, where they have other means to control what can 
be copied.

The Supreme Court is expected to issue a ruling soon in another 
closely watched case involving digital rights and intellectual 
property,  Metro-Goldwyn-Mayer Studios v. Grokster Ltd. In that case, 
the court is considering whether the online services that enable 
copyright songs and movies to be shared freely over the Internet can 
be held liable themselves for copyright infringement.

The rule at issue in Friday's decision would have required 
manufacturers to install special technology in new computers and 
televisions that would enable them to recognize a "broadcast flag" - 
specially embedded computer bits in the programs created by the 
studios and the networks. The new equipment would then restrict 
redistribution and reuse of the programs.

For years, the movie studios and television networks urged the 
commission to adopt the rule, citing the recording industry's 
experience with companies like  Napster and saying restrictions on 
copying and distributing programs by consumers were essential to the 
transition from analog to digital television. They maintained that 
without the imposition of the broadcast flag, shows would be copied 
and then transmitted limitlessly through the Internet, much the way 
music is.

But the critics said that the studios and networks were unduly 
alarmist and that the new rule, which was to have taken effect July 
1, would prevent consumers from copying and using programs for 
legitimate reasons.

Research librarians submitted affidavits in the case contending that 
the broadcast flag rule would make it impossible to distribute 
broadcast clips and other research material over the Internet to 
researchers and students.

Critics also maintained that the commission had overreached and had 
moved to regulate the Internet more tightly, ridiculing the agency in 
the aftermath of the rulemaking as the "federal computer commission."

The rule was challenged from the moment it was issued in November 
2003. The case was filed last year in the United States Court of 
Appeals for the District of Columbia, the usual venue for challenging 
commission rules.

The outcome of the case was signaled during oral arguments in 
February, when the judges aggressively questioned F.C.C. lawyers 
about whether the agency had exceeded its authority by setting 
technical standards having nothing directly to do with broadcasting 

"You've gone too far," said Judge Harry T. Edwards during the oral 
arguments, as he pressed a government lawyer to justify how the 
agency could possibly set standards governing computers and the 
Internet. "Are washing machines next?"

But the breadth of Judge Edwards's opinion was more than many lawyers 
had expected.

"In this case, all relevant materials concerning the F.C.C.'s 
jurisdiction - including the words of the Communications Act of 1934, 
its legislative history, subsequent legislation, relevant case law, 
and commission practice - confirm that the F.C.C. has no authority to 
regulate consumer electronic devices that can be used for receipt of 
wire or radio communication when those devices are not engaged in the 
process of radio or wire transmission," Judge Edwards wrote.

"And the agency's strained and implausible interpretations of the 
definitional provisions of the Communications Act of 1934 do not lend 
credence to its position. As the Supreme Court has reminded us, 
Congress 'does not ... hide elephants in mouse holes.' "His opinion, 
in American Library Association v. Federal Communications Commission, 
was joined by Judges David B. Sentelle and Judith W. Rogers.

David Fiske, the commission's top spokesman, said that the agency did 
not have a comment about the decision and that the government had not 
decided whether it would seek an appeal either to the full Court of 
Appeals or to the Supreme Court. Some lawyers said it was unlikely 
that the Supreme Court would consider the matter as the case did not 
satisfy the criteria for such review.

The broadcast flag rule was adopted at the urging of Michael K. 
Powell when he was commission chairman. It was supported by Kevin J. 
Martin, a commissioner at the time who became chairman this year.

In recent weeks each side in the lawsuit has been talking to 
lawmakers in anticipation of the ruling.

"Without a broadcast flag, consumers may lose access to the very best 
programming offered on local television," said Edward O. Fritts, 
chairman and chief executive of the National Association of 
Broadcasters. "This remedy is designed to protect against 
unauthorized indiscriminate redistribution of programming over the 

Dan Glickman, president of the Motion Picture Association of America, 
offered similar warnings. "If the broadcast flag cannot be used, 
program providers will have to weigh whether the risk of theft is too 
great over free, off-air broadcasting and could limit such 
high-quality programming to only cable, satellite and other more 
secure delivery systems," he said. "It is important to remember that 
this decision is only about the F.C.C.'s jurisdiction, not the merits 
of the broadcast flag itself."

But Gigi B. Sohn, president of Public Knowledge, a digital rights 
advocacy group that led the fight against the broadcast flag rule, 
warned that intervention by Congress could create a new set of 
problems for consumers and innovators.

"If Congress starts to go down the road of giving the F.C.C. broad 
power over new applications and technologies, who knows what comes 
next?" Ms. Sohn said. "This case is about the future of technology."

Government officials and industry executives report that digital 
television has slowly been gaining in popularity. Nearly 1,500 
stations, or about 90 percent of the total, now broadcast some 
digital programs. Industry executives project sales this year of 
about 15 million television sets able to receive digital programs, 
about half of all sets sold. Indeed, some sets already being sold are 
equipped for a broadcast flag.

Cable televisions now have the ability to sell digital programs to as 
many as 90 million homes, and about 300 hours of digital programming 
is available each day in many markets.
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