FCC Flag Rule Doesn’t Fly, Appellate Court Says

The Federal Communications Commission exceeded its authority when it issued rules requiring digital television receivers and other devices to contain technology that prohibited the redistribution of the broadcast.

The technology is known as the broadcast flag. It is a digital code embedded in a DTV broadcast stream that prevents digital television reception equipment from redistributing broadcast content. The broadcast flag affects receiver devices only after a broadcast transmission is complete. The FCC adopted the regulation in November 2003 requiring manufacturers to include the devices in equipment on or after July 1, 2005.

The U.S. District Court of Appeals for the District of Columbia Circuit found that because the devices are not effective until after the broadcast is complete, the flag order does not regulate the actual transmission of the broadcast. “In other words, the Flag Order impose regulations on devices that receive communications after those communications have occurred; it does not regulate the communications themselves,” the court wrote. “Because the demodulator products are not engaged in ‘communication by wire or radio’ when they are subject to regulation under the Flag Order, the Commission plainly exceeded the scope of its general jurisdictional granted under Title 1 in this case.” Since the FCC “can only issue regulations on subjects over which it has been delegated authority by Congress, the rules adopted by the Flag Order are invalid at the threshold jurisdictional inquiry,” the court concluded.

American Library et al. v. Federal Communications Commission et al., D.C. Circuit No. 04-1037 decided May 4, 2005.