Flagging the Senate Telecommunications Bill

By Cameron
June 20, 2006

Senator Ted Stevens (R-AK), Chairman of the Senate Commerce Committee has unveiled his proposal for reforming the Telecommunications Act of 1996. (He plans to take the bill up in committee on Thursday of this week.) The bill tackles a broad range of issues including universal service, video franchising, wireless networks, digital television and more. This post focuses on one particularly troublesome provision in the bill dealing with video/audio flags.


The draft proposal includes two separate proposals related to digital rights management of copyrighted video and audio (on pages 98-109 of the .pdf). The first enacts the Federal Communications Commission’s (FCC) rulemaking on the so-called “broadcast flag.” The FCC’s proposal would outlaw any receiver and downstream technology that does not comply with certain technical content protection measures spelled out in the order. Television sets, computers, Tivos, etc. would all have to be able to recognize a “flag” in a digital broadcast stream and abide by its redistribution and storage rules.

This proposal is very controversial. It limits technology development by mandating a certain technical approach, would likely cause wide-spread compatibility problems, and doesn’t account for existing “fair use” rights of copyrighted material. For those that don’t know the history, when the FCC adopted the rule, a collection of public interest, consumer and technology groups opposed it in court. The proposal was struck down by the courts on the grounds that the FCC lacked the authority for its rule. This legislation not only gives the FCC authority to regulate digital television receivers (and all downstream products), it also specifically adopts the FCC’s proposed rule.

It also tries to address some of the concerns raised by public interest and consumer groups through narrow carve-out exemptions. First, to address the concerns that flags will hamper the ability of distance learning classes to redistribute educational content, it mandates a new rulemaking for what looks to be a completely different flag. Second, to address general free speech/fair use concerns about the flag limiting news broadcasts, it prevents broadcasters flagging news and public affairs programs if their commercial value depends on the “timeliness” of a broadcast. It isn’t clear what “timeliness” means. (The legislation leaves the “timeliness” determination up to the networks.) It seems that broadcasters wouldn’t be able to flag, say, the latest CNN story on data breaches, but a retrospective on Hurricane Katrina would come with DRM attached.


The second DRM proposal relates to digital audio broadcasts. In many ways this is the new front in the flag battles as XM, Sirius and earth-based radio stations begin to deliver digital audio to new technologies that can record and redistribute songs. Because it is a relatively new fight, the proposals to limit redistribution are less developed and the legislation reflects this by punting on the specifics.

The bill establishes an advisory committee with broad membership and gives it one year to develop new regulations to govern this field. The findings have to be a consensus of the members that are consistent with fair use principles. Given the groups involved, good luck finding a consensus that also embodies fair use. This actually ends up being a key point, because if the groups are deadlocked the FCC can issue its own rulemaking, and it isn’t bound by the same restrictions.

It is worth noting that the House of Representatives has already passed a much narrower bill to reform the Telecommunications Act of 1996 leaving out all the flag issues. If Senator Stevens’ proposal makes it through the Senate, it is going to set up one heck of a fight on this and other issues.