Court Deals Cable Piracy Setback


The U.S. Court of Appeals for the Third Circuit has joined other federal
jurisdictions in rendering a decision that prevents operators from using penalty
provisions in the Communications Act that operators believe would win them
larger financial judgments against pirates.

The case was brought in 1996 by then-TKR Cable Inc. against a pirate dealer
operating as Cable City Corp. The pirate dealer was selling his wares openly,
advertising them in Val-Pak mail coupons.

In its suit, the operator argued that there is overlapping authority in the
federal act to punish pirates. That language is contained in sections 605 and
553 of the act.

Cable attorneys want to pursue thieves under the provisions of section 605
because it allows for damages of as much as $100,000 per device. By comparison,
section 553 has been interpreted by the courts to allow for punitive damages of
$60,000 maximum, regardless of the number of devices found in the possession of
a criminal.

Prior to 1968, the operator's argument might have held. But in that year,
Congress passed an omnibus anti-crime bill that impacted the interpretation of
section 605. Now, courts have ruled that the section only applies to radio
equipment, and not cable set-tops. Attorneys for TKR argued that the altered
set-tops facilitated the theft of radio signals, but they were rebuffed by the
appeals panel in Philadelphia, which issued its ruling Oct. 1.

The appeals-panel ruling set aside a lower-court victory for TKR in which the
operator was awarded $160,000 in damages ($10,000 for each of 16 boxes), plus
attorneys' fees and court costs.

The appeals panel joins the Seventh and Ninth Circuits in issuing similar
rulings. Only the Second Circuit Court found for operators on section 605.

Cable attorneys said the most recent ruling again demonstrates the need for
cable lobbyists to compose new state anti-piracy legislation that specifies
per-device damages and expands the reach of protections to cable's new products,
such as Internet services.

A few states have already taken this step, said Geoffrey Beauchamp, an
attorney for the industry's Broadband and Internet Security Task Force.

Laws have been passed in Pennsylvania, Maryland and Delaware. The task force
has drafted legislation for consideration in California, Massachusetts,
Tennessee, New Jersey and Illinois, but those drafts have yet to be introduced,
he added.