FCC Releases Broadcast Flag Rule

November 4, 2003. The Federal Communications Commission (FCC) adopted and released a Report and Order Further Notice of Proposed Rulemaking [72 pages in PDF] in its proceeding titled "In the Matter of Digital Broadcast Content Protection". This item promulgates rules that include a broadcast flag mandate. The FCC's interest in copyright protection is promoting a transition to DTV.

A broadcast flag is digital code embedded into a digital broadcasting stream. It signals digital television (DTV) reception equipment to limit redistribution. For it to be effective, DTV equipment must give effect to a broadcast flag. Hence, this report and order contains technology mandates for equipment manufacturers.

This report and order concludes that "the potential threat of mass indiscriminate redistribution will deter content owners from making high value digital content available through broadcasting outlets absent some content protection mechanism."

And, it states that "Of the mechanisms available to us at this time, we believe that an ATSC flag-based regime will provide content owners with reasonable assurance that DTV broadcast content will not be indiscriminately redistributed while protecting consumers’ use and enjoyment of broadcast video programming."

The report and order provides the following summary. "Pursuant to the doctrine of ancillary jurisdiction, we adopt use of the ATSC flag as currently defined for redistribution control purposes and establish compliance and robustness rules for devices with demodulators to ensure that they respond and give effect to the ATSC flag. We decline to adopt similar compliance and robustness rules for devices with modulators as the record in this proceeding does not reflect a need for regulation in this sphere to protect the viability of over-the-air television. Finally, we defer decision on a permanent approval mechanism for content protection and recording technologies to be used in conjunction with device outputs. We initiate a Further Notice of Proposed Rulemaking to examine these issues in greater detail. As an interim procedure, however, we will allow proponents of a particular content protection or recording technology to certify to the Commission that such technology is an appropriate tool to give effect to the ATSC flag, subject to public notice and objection."

FCC Chairman Michael Powell wrote in a separate statement [PDF] that "The digital television transition rolls on. The Commission's adoption of the ``broadcast flag´´ represents another important step in the digital television transition. Today's decision strikes a careful balance between content protection and technology innovation in order to promote consumer interests."

The five Commissioners supported this item, although Commissioners Copps and Adelstein expressed reservations about certain items, and dissented from other items. They both wrote long statements in which they addressed the lack of privacy protections, and the failure to provide exceptions for works that are in the public domain, and for "news".

FCC Commissioner Michael Copps (at right) wrote in a separate statement [4 pages in PDF] that "Commission action here strikes me as warranted because we are fast approaching a situation wherein new technologies will provide arguably too much power to those who would infringe and pirate the rights of digital creativity. Such digital chaos benefits neither the creators nor the consumers of what is sure to be dramatic new content."

He continued that "Given digital media's susceptibility to indiscriminate mass online distribution, content producers may have significantly greater incentives to broadcast high-value content if there are in place at least basic protection technologies. If denied such protection in one medium (e.g., free, over-the-air broadcast television), they will migrate their new content to other media (e.g., subscription cable television). Such a result would likely discourage new digital content in the broadcast medium and also retard the statutorily-mandated transition to digital television. Neither outcome is acceptable." (Parentheses in original.)

But, he added, "Granting a small set of companies the power to control all digital video content through a government-mandated technology in order to promote digital television is neither necessary nor wise. A broadcast flag mandate that lacked adequate protections and limits would be reprehensible public policy."

"I dissent in part, first, because the Commission does not preclude the use of the flag for news or for content that is already in the public domain", said Copps. "Second, I dissent in part because the criteria we adopt for accepting digital content protection technologies fail to address some critical issues. For example, we do not expressly consider the impact of a technology on personal privacy. Improper use of the technologies could arguably allow such things as tracking personal information. The broadcast flag should be about protecting digital content, not about tracking Americans' viewing habits."

FCC Commissioner Jonathan Adelstein wrote in a separate statement [5 pages in PDF] that "Without question, the indiscriminate mass redistribution of copyrighted works over the Internet may well violate our nation’s copyright laws and strikes at the core economic equation for creators." However, he also wrote that "our action should not give content providers a sense of complacency to avoid actively seeking out new and evolving business models that embrace exciting new technologies and unleash opportunities for eager consumers."

Adelstein (at left) cautioned that "We must be careful not to cut off through preemptive regulation innovation that would lead to products and technologies that benefit consumers, manufacturers, and the creative community alike."

He elaborated that "My fear with today's action is that one technology could become the gatekeeper across various communications platforms and could curtail technological innovation."

He also raised the DMCA. "Given the possibility that the Digital Millennium Copyright Act might apply, content protection technologies have the potential to override lawful uses of digital content. With the case-specific and evolutionary nature of fair use, it is a hard concept to define technologically and not impact it legally. Yet the Commission has no authority to do the latter."

He dissented in part "because I believe we fail to protect the public interest in some key ways. First, I must dissent from the unlimited scope of today’s protection regime. The Order does not rule out the use of the flag for content that is in the public domain." He added that "While the item professes not to affect copyright law, by mandating a technological protection regime that can be used to restrict the flow of content that is in the public domain, or is not subject to copyright protection for other reasons, I am not convinced that we have adhered to our well-meaning pronouncements."

He also addressed "news" content. "Nor do I take lightly a government-required protection regime that could restrict the free flow of news or public affairs programming which is at the heart of public discourse in our society. ... Nor do I see a persuasive reason to restrict the free flow of political speech which yields important societal benefits."

And he dissented on the privacy issue.

See also, separate statement [2 pages in PDF] of FCC Commissioner Kathleen Abernathy and FCC release summarizing the Report and Order [4 pages in PDF].

This item is FCC 03-273 in MB Docket 02-230. This item also includes a Further Notice of Proposed Rulemaking (FNPRM). Comments are due by January 14, 2004. Reply comments are due by February 13, 2004. For more information, contact Rick Chessen rchessen@fcc.gov or Susan Mort at smort@fcc.gov or 202-418-7200.

Edward Fritts, P/CEO of the National Association of Broadcasters (NAB), stated in a release that "The FCC's 'broadcast flag' adoption represents another advance in the digital transition and ensures that consumers continue receiving the very best in free, over-the-air television programming. It is equally important that the Commission recognized that news and public affairs aired by local stations receive the same copyright protection as other programming. With approval of DTV 'plug and play' rules, a DTV tuner mandate and now the broacast flag, the FCC is poised to enact cable DTV carriage rules that guarantee consumer access to the highest quality broacast programming available anywhere in the world."

Jack Valenti, P/CEO of the Motion Picture Association of America (MPAA) stated in a release that "The FCC scored a big victory for consumers and the preservation of high value over-the-air free broadcasting with its decision on the Broadcast Flag. This puts digital TV on the same level playing field as cable and satellite delivery. All the way around, the consumer wins, and free TV stays alive."

Robert Sachs, P/CEO of the National Cable & Telecommunications Association (NCTA) stated in a release that "The FCC's action represents another significant step in moving the digital transition forward. The cable industry has consistently supported the goal of preventing the unauthorized redistribution of free, over-the-air broadcast programming over the Internet."

Gigi Sohn, President of Public Knowledge stated in a release that "We commend the Commission for deviating from the movie studios' proposal, by offering more time for manufacturers to develop Flag-compliant technologies. But we are troubled that the FCC unfurled the Flag at all. Consumer advocates will need to be vigilant to ensure that Hollywood isn't able to lock in all of the anti-consumer features they tried to get in the first round. And consumers will need to be vigilant to make sure the Flag doesn't tread on their reasonable uses of content".