FCC 'crossed the line' on b'cast flag

[Gregg Lengling]

By Brooks Boliek
WASHINGTON -- A three-judge panel of the U.S. Appeals Court accused the FCC of making a power grab when it issued a rule requiring that electronic devices include copyright-protection technology designed to prevent digitally broadcast movies, sports shows and other programs from being illegally distributed over the Internet.

U.S. Circuit Judge Harry Edwards openly derided the FCC's decision to require the "broadcast flag" in devices capable of receiving digital TV signals, saying the commission had "crossed the line."

The technology will be required after July 1 for televisions equipped to receive new digital signals as well as many personal computers and recording devices capable of playing the digital signals. It permits entertainment companies to designate, or flag, programs to prevent viewers from copying shows and then distributing them over the Internet.

Edwards told the FCC's lawyer, Jacob M. Lewis, that the commission should have waited for specific direction before ordering electronics makers to design their technology a certain way.

"You're at a line," Edwards said. "You can't regulate beyond that line without express congressional direction."

He accused the commission of abusing its "ancillary" power to facilitate the digital TV transition as its rationale for writing the rule.

"Are you going to regulate washing machines next?" he said. "Ancillary does not mean you get to rule the world."

Although the commission has regulated electronic equipment before -- requiring TVs to include UHF as well as VHF tuners in 1962; and in August, it required sets to have both digital and analog tuners -- both rules were formulated under specific authority granted by Congress in the All-Channel Receiver Act and not under the commission's authority to further another government aim.

Lewis told the judges that Congress had given the commission an "unambiguous grant to facilitate the digital transition."

Without the flag there would be less incentive to purchase digital TVs, further slowing the transition to digital TV, he said.

While Judge David B. Sentelle acknowledged that entertainment companies would be reluctant to broadcast high-quality movies or TV shows that can't be protected against copyright pirates, he said that wasn't the FCC's problem.

"It's going to have less content if it's not protected, but Congress didn't direct you to maximize content," Sentelle said.

Although two of the three judges on the panel criticized the FCC's decision to write the rule, the court might not make its decision based on the case's merits. Sentelle questioned whether consumer groups challenging the ruling should even get a day in court.

Consumers groups are contesting the FCC requirements, arguing that the rules will drive up prices of digital-television devices and prevent consumers from legally recording programs.

The lawyer for the consumers groups, Pantelis Michalopoulos, argued that the broadcast flag could preclude libraries from copying television programs for educational or teaching purposes.

Sentelle, however, didn't see it that way. Because the rules effect everybody with a TV, it's difficult to find anyone who is disadvantaged by the rule, he said. Sentelle said the fight over the device is a "nonjudiciable controversy" that the court can't remedy.

"Where's your harm?" he asked. "You have to have a harm that distinguishes you from the public at large."

While Judge Judith Rogers was quieter than Edwards or Sentelle, she also expressed reservations about whether the groups had standing.

Appeals-court procedures require groups to be able to show a particular injury before judges will consider a case.

If the appeals panel decides that the consumers groups can't contest the FCC requirements, it would dismiss the case regardless of any concerns about the anti-piracy technology. A decision by the court could happen within months.