A Briefing On Public Policy Issues Affecting Civil Liberties Online from The Center For Democracy and Technology
(1) CDT Highlights Broadcast Flag Issues in Advance of Possible Legislative Push
(2) Lessons of the FCC's Flag Process
(3) Flag Legislation Would Require Careful Attention and Safeguards
Creators of video content have raised concerns that as digital technology advances and network bandwidth increases, over-the-air digital television (DTV) broadcasts may become susceptible to widespread online piracy. Content owners therefore proposed the creation of a federally mandated "broadcast flag" regime aimed at limiting the online redistribution of DTV content. The Federal Communications Commission (FCC) took up this proposal, adopting rules in November 2003 under which a marker - the "broadcast flag" - would identify broadcast content for protection against widespread copying and redistribution. These rules would have affected all devices capable of displaying, recording, or redistributing DTV broadcasts, including computers.
In May 2005, however, a federal appeals court struck down the FCC's rules on the ground that the agency had no authority to adopt them. As a result, video content owners are pressuring Congress for legislation to authorize the FCC to implement broadcast flag rules. They may make a significant push to enact flag authorization legislation before the end of the year, possibly as an amendment to a larger bill. In a new twist, the music industry recently has begun to press for inclusion of language authorizing comparable FCC action with regard to digital radio.
CDT is not endorsing broadcast flag legislation. In general, CDT opposes technology mandates, and we have questions about the effectiveness of a flag regime. The flag concept also has far-reaching implications for technology innovation, legal consumer uses of DTV, and the Internet. These issues would demand serious attention from lawmakers before any decision could be made on whether or how to authorize a flag regime.
Knowing that lawmakers may be considering if and how to proceed, CDT recently released two papers highlighting a number of the key issues that lawmakers would need to weigh carefully before taking any action. One paper highlights the lessons learned from the FCC's effort to implement a flag regime. It confirms that a flag regime carries real risks, particularly if the regulatory process is not carefully structured to maximize openness and predictability. The other paper discusses some of the principal risks, including, but not limited to, those that had already surfaced during the FCC proceedings, and offers recommendations for limitations and safeguards that would be essential to include in any eventual flag bill that Congress might put forward.
CDT believes that the kinds of risks highlighted in its two papers will require more than a cursory debate or a few short lines of statutory language. To date, no congressional committee has focused concerted attention on the questions concerning a flag regime. Therefore, shortly after releasing its papers, CDT joined a group of technology companies and public interest groups in a letter to Congress arguing that any consideration of broadcast flag legislation must include hearings and full deliberation.
The FCC's broadcast flag rules would have required all consumer products that handle digital television, from TVs to TiVo digital video recorders to personal computers, to include some type of government-approved technology for recognizing and protecting flagged content. Companies were permitted to propose different content protection technologies, which would then be reviewed by the FCC. Before the appeals court struck down the rules, the FCC considered thirteen proposed technologies and approved all thirteen.
The untold story of the FCC's approval process, however, was that several technology applicants decided to withdraw valuable proposed features from their products under pressure from third parties, before the FCC ever had a chance to rule. The FCC had stated that it was "concerned with one industry segment exercising a significant degree of control over decisions regarding the approval and use of content protection and recording technologies in DTV-related equipment." But this is precisely what happened.
Four of the thirteen proposed technologies would have allowed a consumer to transmit recorded DTV content over the Internet in a limited and secure fashion. For example, a consumer could use this capability to record a show at home and transfer it to a device in his or her office. These features would not have permitted large-scale redistribution. They were therefore consistent with the FCC's stated purpose of the flag regime -- preventing indiscriminate online redistribution of flagged DTV content.
The Motion Picture Association of America (MPAA), however, filed oppositions to the four technologies, arguing that the flag regime should permit transmission only to devices in a narrow geographical area, such as within an individual household. The MPAA proposed specific technical parameters for blocking non-local transmissions.
In the end, three of the four applicants, fearing an extended battle in front of the FCC, agreed to the precise technical modifications requested by MPAA. Thus, they eliminated the features permitting secure non-local transmission of content over the Internet. The fourth technology was ultimately approved by the FCC, but it faced opposition throughout the process, as well as a subsequent petition asking the FCC to revoke its approval.
This demonstrates that a flag regime does indeed carry risks to innovation, as some critics of the flag have argued. Without any intentional action by the FCC, the approval process allowed a third party effectively to write the design specifications for, and remove consumer features from, several applicant technologies. Another lesson is that the structure of any future approval process would be crucial. The more uncertainty and regulatory discretion there were in the process, the greater the pressure on companies to make concession to remove any objections, and the greater the ability of third parties to exercise an effective veto over a new technology. To minimize this risk, any future approval process would need to include careful safeguards along the lines discussed in the next section.
Giving the FCC approval authority over the wide range of DTV-capable consumer electronics devices would be a substantial expansion of the agency's jurisdiction. Without guidance or limits, the FCC could act in ways that stall the launch of innovative new technologies. Established companies could try to use the process to slow down, control, or block upstart technologies. Indeed, as discussed in the previous section, there could be a real risk to innovation even without the FCC rejecting any technologies, especially if the approval process were too subjective or unpredictable.
If Congress, after debating the pros and cons of a flag regime, decides to proceed, it must include provisions to minimize these risks. Any legislative grant of authority to the FCC would need to be carefully circumscribed. It would need to be tailored expressly and narrowly to implementing the broadcast flag regime. It also would need to contain language ensuring that the technology approval process would be objective, predictable, and timely. In particular, any legislation should specify clear approval standards; a presumption in favor of approval; a uniform timeline for decisions; and active oversight mechanisms to guard against misuse, mission creep, or other problems.
Another serious risk concerns the public's ability to use DTV content in ways that constitute "fair use" under copyright law. CDT believes it would be particularly important to protect fair use of important news and public affairs content. The broadcast flag regime, if applied too broadly, could prevent video footage of key political debates or news coverage from being used in online political commentary posted on a website blog or circulated in viral fashion via email - both of which are increasingly important means of civil discourse. To address this issue, any broadcast flag legislation would need to specify that certain types of content - public domain content, coverage of public debates and speeches, nightly news coverage - should not be eligible for flagging.
Finally, under a broadcast flag regime, devices with flag-compliant content protection technologies would not interoperate fully with pre-flag devices or, most likely, devices using different content protection technologies. DVDs recorded in a new flag-compliant DVD recorder, for example, would not play in an older DVD player. Any broadcast flag legislation would need to direct the FCC to include in its rules consumer notification requirements sufficient to minimize confusion and surprise regarding interoperability.
Implementing a broadcast flag regime would not be a minor or merely technical step; to the contrary, it would have significant and lasting consequences. It would create an ongoing role for the FCC in approving a wide range of digital technologies and would have a major impact on the way the public can use digital television. CDT believes that the policy issues surrounding the flag regime merit a full legislative debate, and should not be left to unguided FCC discretion.