In any event, the DC Circuit this morning threw out the so-called broadcast flag. This would have required "digital television receivers and other devices capable of receiving digital television broadcast signals, manufactured on or after July 1, 2005, include technology allowing them to recognize the broadcast flag"—even if the receivers are not receiving such a signal. Consider, for example, a library showing a recorded children's program as part of its rights and duties under the Copyright Act. The DC Circuit held that this regulation grossly exceeded the FCC's authority.
It is axiomatic that administrative agencies may issue regulations only pursuant to authority delegated to them by Congress. The principal question presented by this case is whether Congress delegated authority to the Federal Communications Commission in the Communications Act of 1934 to regulate apparatus that can receive television broadcasts when those apparatus are not engaged in the process of receiving a broadcast transmission. In the seven decades of its existence, the FCC has never before asserted such sweeping authority. Indeed, in the past, the FCC has informed Congress that it lacked any such authority. In our view, nothing has changed to give the FCC the authority that it now claims.
American Library Ass'n v. FCC, No. 04–1037 (D.C. Cir. May 6, 2005), slip op. at 2 (citations and short forms omitted) (PDF, 112kb). As Judge Edwards later remarks,
[A]ll relevant materials concerning the FCCs jurisdiction including the words of the Communications Act of 1934, its legislative history, subsequent legislation, relevant case law, and Commission practice confirm that the FCC has no authority to regulate consumer electronic devices that can be used for receipt of wire or radio communication when those devices are not engaged in the process of radio or wire transmission.
Id. at 34.
Frankly, this is almost a no-brainer. In the end, though, I doubt that it will have much effect upon the manufacturers of TVs and other receiving devices; they have no doubt already tooled up for the broadcast flag's scheduled implementation on 01 July of this year (less than eight weeks from now). I also suspect that the broadcast flag will be a major point of pressure from the MPAA (among others) in direct communications with manufacturers. Thus, it's going to be difficult to purchase a TV or monitor that does not recognize the broadcast flag—even though the court pointed out just one of many possible reasons that the broadcast flag is an undue imposition. The broadcast flag represents an attempt to administratively run around the end of Sony by administratively doing what the Supreme Court held the Copyright Act did not: prohibit or restrict time-shifting.
What is really sad about this decision is that nobody is commenting upon the self-interested analysis of "regulatory burdens" that now seems dominant in Washington. During the 1980s, the "Reagan Revolution" rode into town proclaiming that government regulation needs to be reduced because it's not necessary. Of course, that's not an entirely accurate statement. Between the broadcast flag, the DRM components of the Copyright Act (17 U.S.C. § 1201 et seq.), and the DMCA (17 U.S.C. § 512), we have vastly increased government regulation of end-user access to copyrightable material over what was in effect in the 1980s—especially once one takes Sony into account. No, what we have is not reduced regulation; it is repurposed regulation. Instead of restricting use of private property, many modern regulatory schemes are designed to protect private property (or, in any event, what some perceive as their private property). Under externality theory, this essentially means that costs and burdens at the societal level have not been reduced—only that the parties who can directly account for those costs and burdens have changed. Perhaps that's a valid result; perhaps the "burden on business" was unduly excessive (although I have never seen any data that supports that conclusion that is not tainted by hidden, or not-so-hidden, agendas—very much like the so-called "malpractice crisis"). Pretending that the overall "amount" of regulation has been reduced by the Reagan Revolution and its aftermath, though, is at best myopic… and more probably ostrichlike.