SMITH, BERMAN WARN FCC NOT TO REWRITE COPYRIGHT LAW ON BROADCAST FLAG

The FCC last month concluded its comment period on the rulemaking, which asks whether the agency has jurisdiction over the broadcast flag and, if so, whether it should mandate such technology. Smith cited “a great danger of massive piracy of unprotected broadcasts” and made clear he wasn’t necessarily opposed to a flag, just to the FCC’s imposition of one in a way that would alter copyright law. Repeatedly cited at the hearing were comments filed at the FCC by groups such as MPAA and the Computer & Communications Industry Assn. (both of which had officials testifying at the hearing) that had cited copyright law in outlining how the FCC should act. Subcommittee ranking Democrat Berman (Cal.) said the FCC’s rulemaking had “clear implications for copyright law.” While he said he supported govt.-imposed tech mandates in select circumstances such as Macrovision, the imposition of a mandate by the FCC “gives me pause… I'm unaware of any precedent of the FCC revising copyright law.”

The FCC has been working closely with the House Commerce Committee, including Chmn. Tauzin (R-La.) and ranking Democrat Dingell (Mich.), Telecom Subcommittee Chmn. Upton (R-Mich.) and ranking Democrat Markey (Mass.) in the committee’s DTV roundtables, and Ferree cited those talks and members early in his written testimony. He chose, however, not to include it in his oral testimony. Ferree tried to assure the subcommittee he didn’t intend “to duplicate the work of the U.S. Copyright Office,” which Berman noted traditionally had been the implementing arm of Congress’s wishes on copyright. He said the FCC could base jurisdiction for the flag on Sec. 336 of the Communications Act, which authorized the Commission to speed DTV implementation, but that his staff still was reviewing comments and hadn’t made a recommendation to the full Commission.

Smith, who isn’t on the Commerce Committee, acknowledged that he was not an expert in FCC procedure. He learned firsthand, however, how the agency handles queries about its timetables. He asked Ferree when the FCC might act on the proposed rulemaking, and Ferree demurred. Smith continued with the question, asking for an approximate date. Struggling to answer in some form, Ferree ventured that if the FCC chose to act, “it would be done this year.” “Would that be 6 months? Three months?” Smith asked. Ferree again declined to be more specific.

U.S. Register of Copyrights Marybeth Peters confirmed that many of the comments filed with the FCC addressed copyright law, adding that some offered the FCC definitions of fair use under law that she felt “are far beyond the scope of fair use.” Many of the comments focused on “consumer expectations,” a phrase used by Rep. Lofgren (D-Cal.) and other fair-use advocates in describing what they felt obtrusive copyright law or technology didn’t always respect. But Peters said that while “we do not disagree that legitimate consumer expectations should play an important role in consideration of the broadcast flag proposal,” it seems that “consumer expectations have been a driving force behind the proposal,” which she said was an extension of fair use not consistent with case law. Her concern, she said, is that “the important policy goals of copyright should not be undermined in the course of adopting any regulatory framework that purports to be protecting fair use, when in reality it permits far more than fair use.” That also was the concern of Berman, his counsel Alec French told us -- namely, that the FCC, not intimately aware of copyright law, would be misled on fair use by some of the commenters.

Beyond jurisdictional issues, the hearing also saw the continuing debate on the merits of a flag itself, with MPAA Gen. Counsel Fritz Attaway calling it essential to permit content holders to release high-quality digital content, and CCIA Pres. Ed Black saying the flag was a means for Hollywood to impose further use restrictions. Black’s position received some support from Lofgren, who asked: “The real question is, what happens next? What controls will be imposed next?” But Rep. Keller (R-Fla.) said CCIA’s argument was undermined by the fact that StreamCast, distributor of the file-sharing program Morpheus, was a CCIA member. “Morpheus joined us last year,” Black said, “and our position formed prior to that.” Black said that if StreamCast were found guilty in court of knowingly violating copyright law, it would be removed as a member, adding that Microsoft wasn’t a member because of its “anticompetitive behavior.” Keller asked why P2P services could have filters for adult content but not copyrighted material, and Black responded that he supposed P2P services could apply such a filter “if there’s a market for that.”

A broadcast flag “is not perfect,” Attaway said, but would discourage honest people from violating copyright law, leaving the remaining ones to be pursued by law enforcement. But Black said MPAA’s approach was to “let other players… bear the costs” of flag technology: “You become one who has to pass on costs or invade their privacy.”