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May 06, 2005

Court of Appeals Strikes Down the Broadcast Flag

In American Library Association v. Federal Communications Commission, the Court of Appeals for the District of Columbia ruled today that the FCC lacked authority to mandate the Broadcast Flag.   The Broadcast Flag provision of the FCC rules adopted in November of 2003 would have required that every device capable of receiving a digital video transmission also recognize an encoding within the transmission that would control the manner in which the content could be used.   The American Library Association and several individual consumers challenged the provision alleging that 1. The FCC lacked authority to enact the provision. 2. The provision directly conflicted with existing copyright laws.

Without reaching the question of how the Broadcast Flag rule conflicts with existing copyright laws, the court of appeals held that the FCC exceeded it's Congressionally delegated authority under the Communications Act of 1934. Because the Flag Rule did not directly regulate communication via video or wire, but rather attempted to control consumer electronics and the use of content after transmission the court concluded that the rule was not within the FCC's specific grant of statutory authority. 

Neither did the FCC have valid ancillary jurisdiction.  Ancillary jurisdiction is limited to circumstances where congress has delegated authority to regulate in a certain area, and the regulation proposed is reasonably related to the commissions statutory responsibilities.  Although the FCC has authority to regulate wire or radio communications, it has no delegated authority to regulate consumer electronics when they are not engaged in the receipt of a broadcast.

The Broadcast Flag Provision of the FCC rules was adopted in 2003 in response to concerns  of copyright owners that the nation's pending shift from analogue to digital television reception by December 31, 2005 created a "threat of mass indiscriminate distribution."    In adopting the provision, the FCC claimed that the threat was not imminent, but forthcoming and that a preemptive measure was needed to ensure the continued availability of high-value video content.

Opponents of the Flag Rule appear joyous and perhaps shocked by this victory.  However, everyone expects that this issue will be revisited in Congress before it is revisited in the courts. 

Posted by Marjorie Sterne at 08:35 PM in Patents & Technology | Permalink

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