A federal appeals court today scuttled the Federal Communications
Commission’s (FCC) broadcast flag scheme to keep pirated digital television
programming off the Internet. The court unanimously agreed the FCC exceeded
its regulatory authority.
Concerned that mass piracy of the sort currently plaguing the music industry
will slow the rollout of digital television, the FCC in 2003 approved the
use of a digital code embedded in a broadcasting stream that blocks further
The FCC mandated television manufacturers to start using the new technology by
July 1 of this year.
“There is no statutory foundation for the broadcast flag rules,” the court
ruled. “Therefore, we hold the commission acted outside the scope of its
delegated authority when it adopted the disputed broadcast flag regulations.”
In the decision issued by the U.S. Court of Appeals for the District of
Columbia, the appeals panel said federal law permits the FCC to regulate
broadcast receivers but only during the broadcast process.
“[The law] does not authorize the commission to regulate receiver apparatus
after a transmission is complete,” the court wrote in its 34-page decision.
The FCC argued that it has the discretion to exercise broad authority over
equipment used in radio and wire transmissions “when the need arises, even
if it has not previously regulated in a particular area.”
The court emphatically rejected the FCC’s contention.
“The FCC, like other federal agencies, literally has no power to act … unless and until Congress confers power upon it,” the panel stated.
When the FCC issued its broadcast flag rules, the American Library
Association, backed by a broad coalition of consumer groups, challenged the
decision. They argued the broadcast flag would derail consumers’ fair use
rights and raise interoperability barriers between electronic devices.
The FCC had no comment on the decision as of Friday afternoon.