Archive for November, 2003

A useful article from the Washington Post. Yes, most arguments on both sides of this issue are overstated. But the frustration and annoyance being felt by Static Control are real.
Note to self: Do not go into a movie theater and point a camcorder at the screen.

Still hoping for someone to leap up and say “FCC had no jurisdiction to enter the flag order” and “this is more like media concentration than do-not-call.” I am going to spend a few weeks figuring out the jurisdiction question (how hard can it be? answer: harder than you think), and I'll report back.
In the meantime, a good Washington Post article is making the rounds.
And I'm very much looking forward to the State of Play conference this weekend. I've posted a new draft of my paper here.

If you are, you are not alone. The question is whether this will become a popular issue — as with media ownership. The likelihood is that it will, but the problem with an uprising is that the FCC order itself is remarkably slippery. FCC can respond: “we're not hurting consumers or innovation — all we have done is create an interim process, and we're all for new content protection (not copy protection!) devices. Bring on your applications! We're here to help!”
It's hard to fight against this, and the anti-flag contingent has to come up with very simple soundbites that get to consumers in the same way hatred of Clear Channel did (probably wrongly) in the media ownership proceeding. Something like: “once you buy your first approved digital TV, you'll have to replace everything in your house. And, gradually, you'll have to get permission to do most things you now assume you can do legally.”
Tough argument.

The unsponsored registries have released a statement about the new draft Issues Report. You can read it here.
As I've said in the past, my personal view is that the registries should suggest their own process for Registry Services price/specification agreements with ICANN. This process could involve a suggestion by a registry that a particular service is indeed a Registry Service, as that term is defined in the agreement that registry has signed, and a request for agreement to a proposed price (if no specification issues are raised). If ICANN failed to respond to that request within a specified time, the Registry Service price that has been proposed should be added to the agreements and the registry should go ahead with that service. The registries have an interest in clarity and freedom of innovation, and ICANN has an interest in oversight; this process would address both of these sets of concerns. ICANN should be required to keep confidential any information for which such treatment is appropriate.
This new process would require a modest change to the existing registry agreements, but would actually be an implementation of the standards already set by these agreements.
My personal view is that ICANN should reject entirely the idea that there should be a PDP with respect to this contractual issue. This is not “policy” — this is ICANN's internal process with respect to approving contractual proposals made by registries. If any constituency wants to suggest the creation of a new consensus policy that would be binding on all registries, they are free to do so.

I'm unhappy with what the FCC has done, because it seems to be boundless, unprincipled, and based on irrational assumptions.
Boundless: It covers all content, whether protected by copyright or not. It covers news; it covers public domain material; it covers anything broadcast (including data, including who knows what).
It covers all devices that include a demodulator. This will include PCs, software demodulators, and any other consumer device.
Unprincipled: The FCC doesn't have jurisdiction to enter this order. Here are their arguments:
1. we have ancillary authority over equipment manufacturers because
— title I mentions “radio communication,” and that term is defined broadly to include “facilities, apparatus, and services… incidental to such transmission”
– but this is about reception, not transmission
— exercising jurisdiction is reasonably ancillary to our performance of our responsibilities to shepherd the country into the digital age
— but there's no evidence that transition being held back — indeed, why are you in such a rush re legacy devices if the transition isn't happening? and no one is holding content back
— but there's no evidence that we'll see different or more content being broadcast as a result of this rule
– and why do we favor broadcast over innovation?
2. we don't need an explicit statutory grant because
— when Congress worried about our broadening jurisdiction they said that in the context of an explicit statute about manufacturers — and here there isn't one
— but the Congressional concern is still relevant
— don't stick us with your statutory interpretation canons about Congress knowing how to grant explicit statutory authority — that would limit our flexibility
— but there's a good reason to limit your flexibility here
3. we must act now because
— the nation now stands at a juncture where such exercise of authority is necessary
— a circular argument for jurisdiction
– why protect broadcast above innovation
— these are narrowly tailored rules
— this is another circular argument for jurisdiction
– not in terms of their impact on the interoperability and functionality of machines
This will make a great jurisdiction lawsuit. Was lack of jurisdiction not enough of a reason not to do this?
More about principle: The FCC has established an interim procedure for Table A admission. Maybe I'm just cynical, but it seems obvious that the 5C suite of technologies will be the group that gets in first. The lock-in effects of that suite (and the overreaching license provisions that limit use of any non 5C suite machines) will be enormous.
More about principle: FCC purports to care about privacy, but the rule attached to the order requires that content if copied be bound to a particular device. A unique device. A device with a unique identifier. These sorts of issues usually prompt privacy concerns. Let's not even start on the “personal network” the FCC hopes to define.
And just one more note on principle (there are so many to be made here): FCC says several times that copy protection isn't their goal and that consumers will be free to make copies. In fact, they even changed the name of the proceeding from “copy protection” to “content protection” just to make everyone feel better. But this is so misleading. Once a piece of content is received by a flag-compliant device, it cannot be transmitted to or copied onto or displayed on a non flag-compliant device. Which means: copying is limited, and will require substantial upgrading of devices.
how can FCC possibly believe that they're not making rules that are copyright related?
Irrational assumptions
Yes, digital works can be copied. But that doesn't mean that the wishes of content owners should prevail over device manufacturers or the comments of thousands of people who wrote in to complain. Why does the FCC believe it has a mission to “forestall the development of a problem in the future similar to that currently being experienced by the music industry”? Why assume that the flag will have any such effect, other than to control machines and innovation? In fact, why assume that the flag is anything other than a staging device for later moves to close the analog hole (that'll be some proceeding) and shut down peer to peer networks? The FCC is being shamelessly used by the content industry. It's a bad day for regulators all around.

Looks like the FCC has finessed the important innovation-related issues by setting up an “interim” requirement to use 5C (which will have all the lock-in and interoperability problems predicted) while promising to fix the problems with the Table A process later. A very negative precedent for the future of machines. More later.

ICANN staff has posted a draft report about the issues they think are relevant to a registry services process for approval.
They are trying hard, but I think they are headed in a dangerously wrong direction.
Let's take the thick contracts that the unsponsored registries have now. The unsponsored contract now provides for prior approval for registry services IF they are for a fee (require an addition to App. G) or if they change the specs (for registry-registrar interaction). The contracts also require ICANN not unreasonably to withhold such approval (and to act reasonably promptly).
It could be a win-win for registries to establish an agreement with ICANN that the registry MAY start the clock on
such approvals by giving notice to the staff in some way registries agree on. Obviously, this would only apply to new actions that fall within the definition of REGISTRY SERVICES (and the registry would be agreeing to that coverage by giving the notice). ICANN staff could choose to notify other groups, subject to respecting requests for confidentiality that the registry had made.
ICANN would agree in this new procedural agreement that it could refuse to approve if (1) a price for a new service allows, an end run on the registration fee cap — particularly if the service is not optional and the price is
way out of line with market value, or (2) the service changes the specification and breaks the Internet — but (3) only if it acted within 30 days (ICANN would agree that failure to act within 30 days would mean approval).
This would require a small amendment to the contract. But it does not really change the substance of what is
already in the contract. This would give unsponsored registries some certainty — they'd get prompt responses and
could protect their confidential information.
If ICANN didn't agree with the assertion of confidentiality, it could refuse to approve the service.
Then we'd have a dispute that could be resolved in accordance with the dispute resolution terms in the contract. ICANN would get a clear restatement of its powers, could stop worrying about antitrust (and calling in competition experts, as Twomey is planning to do), and would get early notice of changes.