Saving Your Set

The Issue: Studio execs want to control what your TV can do. Here's the inside story of how they were stopped . . . this time

May 6, 2005, should be a holiday. It´s When a U.S. circuit court of appeals saved your TV by stopping the â€broadcast flag,†an innovation-killing regulation Hollywood had essentially blackmailed the FCC into enacting.

In 2002 the major studios threatened to withhold shows and movies for broadcast on digital TV (DTV) unless the government gave them control over the design of DTV devices. Then they formed the Broadcast Protection Discussion Group (BPDG)-a cabal of tech companies, broadcasters and Hollywood studios-to work on the broadcast flag, a single bit that was to be embedded in every DTV signal and function like an on-off switch. Flag-compliant devices, such as TVs and receivers, would have to look for the flag and respond to it by limiting the output and recording abilities to those approved by Hollywood. Manufacturing a device that didn´t comply with the flag would be illegal.

The studios´ argument was that DTV was more appealing to online file-
sharers because of the high quality of the picture. But until average high-speed bandwidth multiplies several times, anyone who wants to put a recorded TV show on the Internet has to compress the video anyway, so the quality ends up being no better than an analog recording. What´s more, anyone could still capture a DTV signal from the analog ports on a receiver and import it into their PC. The broadcast flag was a futile solution to an imagined problem.

When my Electronic Frontier Foundation colleagues and I said as much at that first BPDG meeting three years ago, they dismissed us as cranks. Andy Setos, the Fox exec who thought up the flag, told me that he just wanted to
create â€a well-mannered marketplace.â€Many tech companies, including Sony, Toshiba and Apple, showed up and sold out from the start, eager to trade the freedom to innovate for a spot on the short list of approved DTV technology suppliers. Recalcitrant companies got a talking-to. During one meeting, the studio reps hauled Microsoft´s contingent out of the room for an hours-long arm-twisting session on the issue of how PCs would handle DTV.

Initially, the studios had convinced former Louisiana representative Billy Tauzin to sponsor a bill introducing whatever restrictions they came up with. But Tauzin wouldn´t touch the mishmash of monopoly-making pronouncements they ultimately devised. Instead, former South Carolina senator Ernest â€Fritz†Hollings sent former FCC chairman Michael Powell a love note telling him that he didn´t need a law. In Hollings´s view, the FCC already had the jurisdiction to enact the flag. (It was later revealed that the note may not have been written by the senator´s office but by the Motion Picture Association of America.)

Ignoring opposition, the FCC scheduled the flag to take effect on July 1, 2005. So in February 2004, the EFF joined the American Library Association and other groups in asking the Washington, D.C., Circuit Court of Appeals to rule that the FCC´s jurisdiction covered only the transmission and reception of signals, not what happens after they´re received.

And on May 6, the court agreed, saying, â€In the seven decades of its
existence, the FCC has never before asserted such sweeping authority. In our view, nothing has changed to give the FCC the authority that it now claims.â€

But the battle isn´t over. Hollywood´s lobbyists are pushing a bill now that would allow the FCC to regulate PCs, receivers, even camcorders-anything that could be used in connection with â€indiscriminate Internet redistribution.†They´re trying to find a politician who will commit career suicide by introducing it. But you can fight it: Send your elected rep a note at action.eff.org.