LuminousVoid

Today I went to see the oral arguments at the D.C. Circuit Court in American Library Association v. FCC. This case has been described as “just as important as Grokster” to the future of technology and information. Several groups are trying to stop the FCC broadcast flag rules.

Background.

A “broadcast flag” is basically a switch or encoding in a digital television signal that tells the receiver of the signal some features of the rights that the broadcaster is claiming, particularly the right to copy or rebroadcast the signal. The FCC issued a ruling that all consumer electronic devices, including PC’s, would have to respect a digital broadcaster’s flag settings when it came to redistribution — though not copying — of content.

The ALA is concerned that this will stifle the use of broadcast works — like normal TV shows, in distance learning programs over the internet. More broadly, this scheme makes an end run around fair use: if it were legal for you to send a sample of a TV program to a friend in order to discuss it, you wouldn’t be able to. It also captures the public domain, as public domain materials that had a broadcast flag wouldn’t be able to be rebroadcasted. Lastly, everyone is concerned that this scheme could mean the regulation — and requirement of prior governmental approval — of any consumer device that reads digital TV signals: including PC’s and even open-source/free software.

The ALA’s lawyers make 3 arguments against the FCC’s action:

• The FCC doesn’t have the power to regulate these technologies.
• The FCC is crossing over into copyright law.

Public Knowledge describes these 2 issues as:


In the absence of an express mandate from Congress, the FCC does not have the power under the Communications Act to adopt the flag scheme. The Communications Act of 1934 and its amendments govern what the FCC can and cannot regulate, and nothing in that Act permits the FCC to a) impose broad product design mandates on consumer electronics devices and computers and b) adopt what is, for all intents and purposes, copyright policy

• The problem that the FCC is trying to solve hasn’t been properly shown to exist, and the broadcast flag rules haven’t been shown to be a solution to them. This is known as saying that the rulemaking was “arbitrary and capricious” and not based on “substantial evidence” — terms of art in administrative law.

The Oral Argument

NOTE: I’m not a skilled reporter, my notes are not polished quotes, so please don’t assume that anything here is more than a paraphrase. I’m using quotation marks to make it easier to read, not to mark actual quotes.

ALA
The ALA’s lawyer had barely finished introducing himself when J. Sentelle interrupted him to ask how the ALA has standing to sue the FCC in this case. The ALA pointed to the two-fold harm of the increased cost of equipment and the preclusion of copyright law that the FCC’s rule would cause. J. Sentelle pressed on, because standing requires a particularized harm to your clients, and not a general harm to the public — the latter is known as being something non-justiciable. Relief for general harms comes from Congress, not the courts. J. Rogers stepped in to save the ALA and asked if they are requesting that the court assume that the number and nature of members of the ALA is such that they will want to use materials that the rule would affect. The ALA replied that it doesn’t have to assume, and later pointed to parts in the record of particular plans that would be affected by the rule, such as the distance learning programs.

After almost 10 minutes of the 20 minute argument spent on standing, the ALA got the merits of its argument. They pointed out that the FCC is interpreting previous Congressional limitations of the FCC’s power as being limited to specific grants of power — in effect turning the limitations around into implicit grants of broad power. They repeated their argument that the FCC does not have ancillary jurisdiction to make the rules in this case.

J. Edwards was concerned about where the line should be drawn on the FCC’s power to regulate equipment. The ALA replied that it was at receipt , and that this regulation affects the post-receipt handling of signal — the modulation phase. J. Sentelle asked for a clarification: “post antenna, there can be no regulation?” The ALA answered yes, and mentioned that this reading of the FCC’s power would open the floodgates of regulation to a wide class of products.

The ALA added that the FCC has not shown how this regulation is ancillary to the FCC’s power to regulate wire and radio transmissions, but did not elaborate, instead moving on to their second point: this is an intrusion into copyright law. They pointed out that the rulemaking used to be about “copy protection” but now is about “content protection”. The judges and the ALA discussed how in the digital world, every distribution is a copy, but not every copy is a distribution.

J. Sentelle seemed unimpressed. His retort to the intrusion into copyright law was basically “so what?” The ALA pointed to Sony ’s decision that sound policy requires deference to Congress in striking the balance between copyright owners and the public. They continued by arguing that Congress had drawn the line at the DMCA, and had wished no further regulation. J. Sentelle asked whether this is more than mere deference, that it is saying that lack of action by Congress is to be read as an action by Congress? “Only Congress has the power to act” was the reply. J. Sentelle wondered whether this isn’t like a claim for a dormant copyright clause, similar to the dormant commerce clause. The ALA reinforced that the FCC has no ancillary jurisdiction to regulate apparatuses like this.

FCC

As the FCC barely got started, J. Sentelle asked why the FCC didn’t challenge the lack of standing of the ALA. J. Edwards pointed to a case where a broad but concrete harm could justify standing, as opposed to a broad but abstract one. The FCC didn’t seem interested in having the case tossed on this ground, and when pressed for its official position on standing, the lawyer said that all he could offer was that the FCC did not challenge it. J. Sentelle reminded everyone that standing doesn’t need to be challenged and can’t be waived — the court can toss a case on its own for lack of standing.

The FCC moved on to the merits of their argument. They are concerned that content would move to cable and satellite and away from broadcast digital TV, and thus are implementing this to protect broadcast TV. J. Edwards asked if this means that cable and satellite offer more content protection already, and the FCC answered yes.

The discussion moved on to whether broadcaster encryption would solve this problem. The FCC noted that encryption was problematic, because it would cause obsolescence of existing equipment, whereas with a flag regime, existing equipment simply ignores the flag.

J. Edwards then asked about the extent of the FCC’s ancillary authority. He was curious about when they ever have exercised authority to regulate apparatus after transmission. The FCC replied that it has never done so, but has always had the power to do so. J. Edwards asked why the All Channels Act, which gave the FCC the authority to regulate that TVs have the capability to receive both UHF and VHF signals, was necessary given the FCC’s reading of its broad ancillary authority. The FCC replied that the cases that settled the FCC’s ancillary authority were decided after the All Channels Act was passed, and therefore they are consistent.

In the middle of that discussion, J. Sentelle asked whether the FCC had the power to regulate to “increase content.” The FCC replied that no, they had the power to promote the transition to digital. J. Sentelle later pressed further, asking whether the FCC could promote the transition with price controls, or mandating coupon sales. The FCC replied that it didn’t know. J. Edwards asked how the FCC gets the power to encourage hardware sales. The FCC replied that it is removing a difference between 2 hardware systems, in order to facilitate the transition to digital broadcasting.

The argument concluded with J. Edwards making the point that if it is the view of Congress that the law gives the FCC ancillary authority over these devices, then the FCC will be able to very quickly get legislative authority to make this rule if the courts don’t find it in the current statute.

Sources/Follow up

American Library Association.
Public Knowledge.
Electronic Frontier Foundation.

UPDATE: Declan McCullagh’s coverage hits the web. Court questions FCC’s broadcast flag rules. He’s got some of the juicier quotes, including the “washing machines” line.