Judges Critical of FCC’s Broadcast Flag

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At least two federal judges indicated Tuesday that the Federal Communications Commission likely exceeded its authority by imposing rules designed to protect broadcast-TV programming from rampant Internet piracy.

The FCC’s broadcast-flag rules -- adopted in August 2003 at the urging of Hollywood studios and others -- required a wide range of receiver equipment to recognize codes within TV signals that determine the extent to which the programming can be copied and transmitted over the Internet.

In doing so, the FCC, for the first time, relied on its “ancillary authority,” rather than on a clear directive from Congress, to impose technical requirements for the design of equipment that receives digital-TV signals.

Judge Harry T. Edwards of the U.S. Court of Appeals for the D.C. Circuit stated several times that the FCC’s reliance on its ancillary authority was not only unprecedented, but also far-reaching in terms of expanding the agency’s power over all kinds of industries.

“Is it going to be washing machines next?” Edwards asked. “It has never been done before, ever. Ancillary has never meant `rule the world.’”

FCC attorney Jacob Lewis said the agency’s broadcast-flag rules were tied to its authority to regulate digital-TV stations, both to ensure that digital-TV programming wasn’t stolen and that “high-value” content owners, fearing theft, didn’t prefer cable and satellite because those technologies scramble programming.

Lewis said failure to protect digital-TV programming would frustrate the agency’s effort to promote the transition to digital television.

“Congress didn’t tell you to maximize content,” said Judge David Sentelle, like Edwards a skeptic of the FCC’s power over equipment manufacturers.

The three-judge panel, which also included Judge Judith Rogers, heard 50 minutes of oral arguments in an appeal filed by the American Library Association, the Consumer Federation of America, the Electronic Frontier Foundation and others.

These groups are concerned that in its broadcast-flag rules, the FCC, without congressional endorsement, decided to amend copyright law in a way that tightens the fair use of copyrighted material.

But the case might not be decided on the merits.

Sentelle questioned whether the ALA and other groups had legal standing to challenge the FCC rules, claiming that courts usually don’t extend review to cases that fail to demonstrate specific injury.

“You have to have a harm particularized to the claim,” Sentelle said. “Being interested in a subject doesn’t give you standing.”

ALA lawyer Pantelis Michalopoulos said the groups had standing because the FCC's rules would increase consumer prices and encroach on fair-use rights protected by copyright law. He added that the FCC does not have copyright jurisdiction.

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