FCC flags in court date

WASHINGTON — A federal appeals court Tuesday disparaged both sides in the argument over new FCC rules requiring antipiracy technology in devices capable of receiving digital broadcast signals.

Faulting consumer groups who oppose the rules, one judge said they had failed to demonstrate any legal basis for a court challenge. But the same judge later concurred with another in lambasting the commission for not having authority to pass such rules.

After picking apart the reasoning of both sides, the three judges of the U.S. Court of Appeals for the District of Columbia gave a clear impression that neither camp had a legally compelling or even persuasive argument. As a result, no indication emerged of how the court will rule, possibly within a few months, in the closely watched and hotly contested case.

In 2003, the Federal Communications Commission initiated rules that would require digital televisions, certain personal computers and VCRs manufactured after July 1, 2005 to have the antipiracy technology known as “broadcast flag.”

Digital broadcasters mark — or flag — a transmission by embedding a protective code, which restricts the receiving device’s ability to copy the broadcast and upload it onto the Internet.

Representing the consumer groups, which include libraries, lawyer Pantelis Michalopoulos argued that the FCC had overstepped its regulatory authority by becoming a “content protection regime.” The new rules would also impede legitimate and fair use of copyrighted material, such as copying a broadcast for personal or educational purposes, he said.

But Judge David Sentelle cut Michalopoulos off, claiming the attorney had failed to prove the single most important point in bringing this case to the court’s attention — that his clients would suffer “particularized harm” should the rules be upheld. Michalopoulos’ claim that “all consumers” would be harmed by increased prices was “too broad,” Sentelle said.

When Michalopoulos tried to elaborate on his claim, Sentelle impatiently stopped him, saying, “You’re not helping yourself, counselor.”

While no federal statutes specifically grant the FCC authority to regulate new broadcast technologies, commission attorney Jacob Lewis argued that the agency was allowed to pass the rules since Congress conferred upon it “ancillary authority” regarding broadcasting.

But Judge Harry Edwards sharply disagreed, saying Lewis was being far too broad in his interpretation of “ancillary.”

“You’ve never had the authority to do this,” Edwards continued, saying the FCC couldn’t extend its reach over just any technology. “Are washing machines next?”

“The definition of ‘ancillary’ is flexible,” Lewis said.

“Not infinitely flexible,” Sentelle shot back.

The judges seemed unanimous in their skepticism of FCC authority in the matter. But to rule in favor of the consumer groups, a majority of the court would first have to accept that the groups have proved “particularized harm.” If the majority does not accept that, the case would be dismissed, but the court would still be open to hearing a challenge of the rules from a party that can prove harm.

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