The Flag is Down

In what must be considered a major victory for consumers, on May 6, 2005, the United States Court of Appeals for the District of Columbia Circuit ruled in favor of the American Library Association and others who filed suit against the Federal Communication Commission (FCC) to block implementation of the so-called "broadcast flag," a digital signature that would have severely limited the circumstances under which consumers could copy DTV programs. As a result, over-the-air DTV signals may be freely recorded and copied for personal, non-commercial purposes as outlined by the principles of fair use (as unclear as those principles may be).

In his official opinion reflecting the court's unanimous decision, Judge Harry T. Edwards wrote, "The principal question presented by this case is whether Congress delegated authority to the Federal Communications Commission…to regulate apparatus that can receive television broadcasts when those apparatus are not engaged in the process of receiving a broadcast transmission. In the seven decades of its existence, the FCC has never before asserted such sweeping authority. Indeed, in the past, the FCC has informed Congress that it lacked any such authority. In our view, nothing has changed to give the FCC the authority that it now claims." In other words, the FCC has the authority to regulate a device's behavior as it receives a broadcast transmission, but not after the transmission has been received.

Edwards went on to write, "Congress never conferred authority on the FCC to regulate consumers' use of television receiver apparatus after the completion of broadcast transmissions. As petitioners point out, 'the Broadcast Flag rules do not regulate interstate radio communications…because the Flag is not needed to make a DTV transmission, does not change whether DTV signals can be received, and has no effect until after the DTV transmission is complete.' We agree. Because the Commission overstepped the limits of its delegated authority, we grant the petition for review."

Of course, broadcasters and content owners are not happy with the ruling, saying that without such protection, the threat of digital piracy will slow the transition to digital broadcasting. In response to the court's decision, National Association of Broadcasters President Eddie Fritts said, "Without a broadcast flag, consumers may lose access to the very best programming offered on local television. This remedy is designed to protect against unauthorized indiscriminate redistribution of programming over the Internet. We will work with Congress to authorize implementation of a broadcast flag that preserves the uniquely American system of free, local television."

I would argue that the ability to record and copy programming for personal use is an integral part of that American system, as established by the famous "Betamax" case some 25 years ago. On the other hand, broadcasts are now digital, making it possible to copy material over any number of generations with no loss of quality. In addition, the Internet allows easy and widespread distribution of digital content, which was certainly not a concern 25 years ago.

Ultimately, content owners must be able to protect their property from piracy. Otherwise, they might not receive the income necessary to create new content. As Bob Wright, chairman of NBC, said in his response to the ruling, "Today's court ruling imposes crippling restraints on the FCC's ability to effectively support the development of a safe, sustainable marketplace for the creation and distribution of digital TV broadcasting. These limits will harm millions of American consumers who want to receive high-quality content through over-the-air digital broadcasts. The broadcast and motion picture industries are embracing new digital distribution technologies, but, to protect these works from theft, the laws must keep up. As it did with the outlawing of spam, Congress needs to ensure that our laws keep pace with the evolving digital technology landscape."

By the same token, however, consumers must not be limited in their ability to record and copy content for their own use. A delicate balance must be struck if the DTV transition is to be fully successful, and that balance must be managed technologically. Whether or not the broadcast flag will serve this purpose remains to be seen; broadcasters and movie studios are vowing to lobby Congress to authorize the FCC to implement the flag. But in the meantime, manufacturers are released from their obligation to make their DTV receivers compliant with the broadcast flag, which is great news for consumers.