Reflections on the Microsoft/Ireland Case

Last week the Supreme Court granted a review of a Second Circuit decision upholding Microsoft’s defiance of a U.S. warrant for the production of e-mail messages, stored in a server housed in Ireland, of a man suspected of drug trafficking.

At its simplest, the legal battle between Microsoft and law enforcement is a debate over the reach and intent of a law passed many years (1986) before the coming of age of the Internet.

Microsoft and its allies argue that that law, the Stored Communications Act (SCA), was written at a time when Congress knew virtually nothing about the Internet and what it would become, and that furthermore there is no indication in the language of the law or congressional intent that suggests it could be applied extraterritorially. Continue reading “Reflections on the Microsoft/Ireland Case”

Aereo and the Future of Content and Copyright

A case being petitioned for review by the Supreme Court will, if accepted, tell us a lot about the future of broadcasting. More importantly, it will tell us a lot about the future of all the content media, and of the nation’s copyright laws generally.

The case in question concerns the business practices of an outfit called Aereo, which streams for a fee over-the-air TV programming to the company’s subscribers.  Because this programming is delivered through the Internet, it is accessible when and where the subscriber wants it.  Sounds good, right?

Bu there’s a hitch.  Unlike cable and satellite systems, which pay the broadcasters for the right to retransmit their copyrighted programming, Aereo pays nothing. And how are they able to do this?  Well, that’s the heart of the Supreme Court petition filed last month by the four big broadcast networks, ABC, CBS, NBC, and Fox.

When cable and satellite operators distribute broadcast programming to their subscribers this is deemed a “public performance,” which is why those operators have to pay the broadcast copyright holders for the privilege.  When, however, an individual records a copyrighted program on his DVD this is deemed a “private performance,” and requires no compensation to the copyright holder.

Aereo’s business plan plainly exploits this public/private dichotomy by the simple device of installing tens of thousands of dime-sized antennas, each of which stream the over-the-air programming to Aereo’s subscribers individually, thereby qualifying, according to Aereo, as a private performance.

Lest you think for a minute that this is a triumph of engineering, rest assured it is not.  As noted by Rod Smolla, the lawyer who filed a brief for The Media Institute in support of the petition for review: “If a picture tells a thousand words, a thousand antennas tell the picture.”

Nor is Smolla the only person who sees through this scheme.  Denny Chin, an appeals court judge who was part of a panel that earlier ruled against an injunction against Aereo, wrote this in his stinging dissent:

The [Aereo] system employs thousands of individual dime-sized antennas rather than one central antenna; indeed, the system is a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law. 

Because the Supreme Court agrees to review less than one percent of the cases brought before it, it’s no sure thing that Aereo will be reviewed, even though Aereo has declined to oppose the petition for review.  Much may depend on the decision in another appeals court, which is considering a case concerning a company with an Aereo-like setup.  If that court rules against the company, there will be a conflict between two appeals courts (the Second and Ninth circuits), something that would increase the chances that the Supreme Court would agree to review the case.

The importance of this case is not just whether broadcasters can derive revenue for their programs from third-party Internet distributors.  The importance is in what it will tell us about the future of all the content industries and of copyright itself.

To put it another way, you don’t have to be a fan of broadcasting (or Hollywood, or the recording industry, etc.) to have a high regard for copyright.  Like the First Amendment, copyright is enshrined in the U.S. Constitution, and in practice it is copyright that provides the incentive that leads to the creation of the content that the First Amendment protects!

Seen this way (and even acknowledging that there is always some tension between the First Amendment and copyright, usually over arguments about the reach of “fair use”), both of these concepts are not just important in their own right, they’re the opposite sides of the same coin.

Today, however, those industries that rely on copyright protection – the so-called content media like newspapers, magazines, motion pictures, recording companies, book publishers, and broadcasting – are being decimated by piracy and/or the copyright-skirting practices of Internet companies like Google.

Whether the Supreme Court reviews the case or not, Aereo won’t be the last word on the subject of copyright protection.  But if Aereo, or any company, can escape paying copyright fees simply by creating a service that turns on a technological sham like Aereo’s, it’s not just content producers that will suffer; it’s the content-consuming public and copyright law generally.


The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils. A version of this article appeared in the online edition of USA Today on Dec.16, 2013.


The DISCLOSE Act Creeps Along

Sometime before the end of the world (which is to say any day now) it’s going to occur to our congressional leaders that the United States is facing some actual problems that might usefully be addressed.  In the meantime, though, the expectation is that they’ll just keep lobbing into the hopper things like the DISCLOSE Act.

As mentioned in an earlier blog, the legislation is formally titled the “Democracy Is Strengthened by Casting Light on Spending in Elections” Act.  And right there you have a measure of the collective wit of the bill’s sponsors.

Having cleared the House last month, the legislation is now in the Senate where its fate is unclear.  There’s talk of a Republican filibuster and of Democratic weariness.  But never mind the horse race aspects; we can trust our political reporters to handle that.  Of much greater importance are the myriad things that are wrong with the bill, divisible in parts between those that are just routinely outrageous, and those that are uncommonly so.

Among the former are the carve-outs exempting special interest groups like AARP and the NRA, and the transparently political rush to pass the legislation before the fall elections.  But the worst aspects of the bill are those that are also the most constitutionally infirm.

The bans on direct expenditures by government contractors and TARP recipients (with no similar limitations put on unions), and the speech-chilling threat of harassment inherent in some of the disclaimer and disclosure obligations, are sure to be challenged in court if the DISCLOSE Act is passed and signed into law.

It’s rarely a prudent thing to predict the outcome of any matter before the Supreme Court.  But considering what appears to be the support there for the notion that the speech at issue enjoys constitutional protection, it’s hard to see the Court upholding a bill that, for instance, restricts the First Amendment rights of organizations just because they happen to be government contractors.

In the main, The Media Institute’s opposition to McCain-Feingold has focused more on that legislation’s impact on “issue ads” rather than direct political contributions.  But given the mischief, not only inherent in but positively intended by the bill’s sponsors, the hope here is that, whether by filibuster or force majeure, the DISCLOSE Act will be put to rest in the Senate.

As they say in the ad, “Just Do It.”

Congressional (Mal)intent

Einstein’s Special Theory of Relativity postulates that it’s impossible for anything to go faster than the speed of light. More impossible still is the ability of Congress to honorably handle First Amendment issues.

The latest example of this dolorous state of affairs can be seen in the so-called DISCLOSE Act. Aimed at curbing what its Democratic sponsors claim are flaws in the Supreme Court’s campaign finance decision (Citizens United vs. FEC), the formal name of this legislation is the “Democracy Is Strengthened by Casting Light On Spending in Elections Act.” Seriously.

Not to put too fine a point on it, the difference between this Act’s intended impact and its stated goal is the difference between flapjacks and flapdoodle. In fact, the difference may be even greater than that. The Act is so dense and lengthy, who knows what’s in there? Could be anything. The only people who are going to know for sure are those communications lawyers who find gaping holes and contradictions in it–and don’t think for a second they won’t.

With this kind of opacity we can’t yet identify all of the Act’s “microflaws,” but its “macroflaws” are easily spotted: It burdens political speech in ways that are intended to discourage it, and it provides for the care and feeding of incumbents at the expense of challengers and the public at large.

We know the true intent of this legislation is to stifle political speech because the sponsor of the Senate bill, Charles Schumer, has admitted as much. As reported in Politico, though the legislation is “billed primarily as an effort to enable voters to determine who is behind ads attacking or supporting candidates, Senator Schumer…acknowledged that part of his goal is to limit the campaign spending newly legalized by the high court.”

“My view,” he said, “is that many CEOs of major organizations will air ads if they don’t have to disclose, but once they have to come up front and disclose, they will not do it…Anyone who wants to hide, will not do an ad after this legislation passes. And I think there are a lot of people who like to hide…so I think there will be many fewer of them.”

Apart from the DISCLOSE Act’s transparently fraudulent claim to a kind of “good government” motivation, the Act burdens business and nonprofit political speech by requiring so many on-air disclosures there would be little time left for a message of any kind, and by requiring CEOs of the sponsoring organizations and their major donors to do a kind of “I stand by this message” statement in the ad itself. The problem with this latter aspect is that this statement threatens to subject all such to retaliation and harassment by candidates, parties, and interest groups who disagree with whatever the message might be.

Another malevolent aspect of the Act, as analyzed by the Center for Competitive Politics (CCP), is that the legislation “would prohibit government contractors and U.S. subsidiaries of foreign companies from engaging in independent political expenditures.” This, from a group of politicians who, until the recent unpleasantness, were among the most fervent supporters of Acorn, an organization that attempted, in the name of “political inclusion,” to register the quick, the dead, and the never were.

A third macroflaw, and the one that shines a bright light on the sponsors’ true motives, is the provision that provides “candidates and parties the lowest advertising rate whenever an independent group airs ads in a given media market.” As the CCP observes, “This is a nakedly self-dealing attempt to punish independent groups for speaking out against Members of Congress.”

In a recent note, attorney Jan Baran, the esteemed election law expert at Wiley Rein, summarized this aspect of the DISCLOSE Act as follows: “The lowest unit rate provision manifests the politicians’ twofold strategy, which is as follows: first, do everything you can to burden and discourage public commentary about them; and if that doesn’t stop the speakers then give the political parties (which the politicians control) cheap TV and radio time at the expense of the broadcasters.”

“As you know,” he said, “the history of ‘reform’ is the history of politicians seeking to control political debate.”

The particulars of this legislation to one side, there is another woeful aspect of the campaign to reverse the Supreme Court’s Citizens United decision, and that is the lack of integrity in the debate.

One of the (very few) advantages in growing old is that you get to personally observe a bit of the sweep of history. In my case that history goes back to the Warren Court, and to the frequent conservative criticisms of that Court’s decisions.

Back in those days such criticism was said, by all the right people, to be an attack on the Constitution itself. But fast forward to the present time and what do we find? The New York Times publishing an editorial, in the wake of Citizens United, titled “The Court’s Blow to Democracy;” the president excoriating those Supreme Court justices who were in attendance at a State of the Union address; and the Senate sponsors of the DISCLOSE Act announcing their legislation on the front steps of the Supreme Court, ironically enough in the same week that the Court announced, for security reasons, that the front entrance will no longer be available to the public.

Time will tell whether any or all of the Act’s provisions, if enacted, will survive judicial scrutiny, but in the meantime, and in the interest of “truth in labeling,” the Act should be formally renamed. A more accurate title would be the Hyper-Partisan Old Claptrap Reveling In Temerity Act.

The acronym? You figure it out.

First posted on Broadcasting & Cable, May 6, 2010

Citizens United and the Commentariat

Nothing’s quite so inspiring as the sight of journalists, in high dudgeon, trashing the First Amendment.  Such has been the rule since last Thursday, when the Supreme Court issued its opinion in the campaign finance case called Citizens United.

For the uninitiated, the cause of the hysteria, at places like The New York Times and The Washington Post, is the Court’s entirely correct decision to liberate political speech from the clutches of the Federal Election Commission, such that labor unions, for-profit and nonprofit corporations will hereafter be able to spend general funds on the placement of issue ads and other kinds of what the FEC refers to as “electioneering communications.”

Because campaign finance “reform” has always been a hotly politicized issue, it’s not surprising that politicians, from the White House to Congress, have weighed in on this issue with more heat than light.  But it’s something else again to see journalists – all of whom zealously guard and enjoy their own First Amendment rights – turn a blind eye to those same rights where they’re someone else’s.

The journalists’ criticism of the Court’s decision is (1) that it is unnecessarily overbroad; and (2) that it will allow corporations (by which they mean large for-profit corporations) to dominate the political environment by the fact, or threat, of campaign advertising.

Even if one takes these journalists at their word – that their motive is a value-free concern for the political process rather than a tawdry reflection of their own political biases – we can say without fear of contradiction that, at least in this regard, they value the political process more than they value free speech.

Among the citizenry generally, such sentiments would be neither unexpected nor especially hurtful, but when they issue from journalists they are both.  This, because as people who are professionally engaged in such matters know, the Speech Clause of the First Amendment is not divisible by its applications.  It doesn’t apply just to the print media or broadcasting, news or entertainment, professional journalists or people at large, but to all of these and then some.

And the simple truth is that if you weaken the First Amendment in any area you weaken the whole of it.  This comes about because of the way that precedent is applied, not just in the courts but in policymaking venues as well.

Corporations enjoy constitutionally protected speech rights even where the speech in question is just commercial speech (speech that does no more than propose a commercial transaction.)  There’s no question about this.  There is lots of case law, most notably in Central Hudson.  Given this, how much greater is the value, under the Constitution, of their political speech?

The constitutional weakness in the journalists’ criticism of Citizens United to one side, they are also wrong on its political effects.  Corporations, particularly large and publicly owned corporations, are loath to spend their general funds on election campaigns.  This, because they know that, by doing so, they will inevitably attract criticism from some of their stockholders, and from the disfavored party and candidate(s), in any given election.  Corporations much prefer to stay out of election contests, and to allocate even their PAC money to incumbents, or to both incumbents and challengers.

And what if, despite the general aversion, it sometimes happens that corporations do spend general funds on election campaigns?  Given their reluctance to get involved in this way, perhaps the public ought to hear what they have to say.  It’s not, after all, as though such corporations are without their constituencies.

Indeed, when you consider the vast number of stakeholders that any large company has among its employees, stockholders, vendors, and customers, the company’s views are vastly more representative and diverse than those, say, of the editorial board of The New York Times.

As for the argument that the Supreme Court overreached in this case, a couple of observations.  First, while a number of commentators are now saying that the Court should have allowed the Citizens United film ("Hilary: The Movie") to be broadcast without going further, that’s a point they didn’t make before the decision came down.

Much more importantly, this criticism ignores the history of this case, most importantly oral argument when it first came before the Court, on March 24 of last year.  It was at that time that the government, which was there to defend McCain-Feingold in the person of deputy solicitor general Malcolm Stewart, inadvertently spelled out just how speech-killing our campaign-finance system might be.

Asked by Justice Alito if the government believed McCain-Feingold would permit like restrictions were the product distributed on the Internet, or as a DVD or a book, Stewart responded that it could be applied to all of those, that it could even require banning a book that made the same points.

As Bradley Smith, writing in National Affairs, put it:

There was an audible gasp in the courtroom.  Then Justice Alito spoke, it seemed, for the entire audience: ‘That’s pretty incredible.’  By the time Stewart’s turn at the podium was over he had told Justice Anthony Kennedy that the government could restrict the distribution of books through Amazon’s digital book reader, Kindle; responded to Justice David Souter that the government could prevent a union from hiring a writer to author a political book; and conceded to Chief Justice John Roberts that a corporate publisher could be prohibited from publishing a 500-page book if it contained even one line of candidate advocacy.

In other words, it wasn’t until after they had heard this – straight from the horse’s mouth as it were – that the Court issued, in June, its surprising order that the case be reargued and expanded to include two of the Court’s earlier rulings.

Viewed from a First Amendment perspective, McCain-Feingold was the worst piece of legislation ever enacted and subsequently upheld as constitutional.  That so many journalists are unhappy with its undoing is a black mark on their profession and on them as individuals.

First published here on The Huffington Post, Jan. 26, 2010.

How Sweet It Is!

The opinion handed down today in the Supreme Court re McCain-Feingold is good news for everyone who values free speech in general, and political speech in particular.  The relief it grants to labor unions, nonprofit and for-profit corporations, who are now free to sponsor issue ads within close proximity to federal elections, is particularly gratifying and long overdue.

As congressional proponents of the Bipartisan Campaign Reform Act scramble to write legislation in an attempt to work around the Court’s decision, they will now have to confront this daunting fact: As of today, speech of the sort that was at issue in this case is constitutionally protected under the First Amendment.


Back to Square One

Two of the Supreme Court’s decisions most awaited by First Amendment advocates this term have landed with a thud.  Or maybe a whimper.  But certainly not with a bang.

On April 28, the Court upheld the FCC’s power to implement a tougher policy against so-called “fleeting expletives” on live television.  This was the Second Circuit’s case involving profanities uttered by Nicole Richie and Cher during music-awards shows in 2002 and 2003.

The other shoe dropped today when the High Court considered the Third Circuit’s case involving Janet Jackson’s “wardrobe malfunction” during the 2004 Super Bowl halftime show.  The Supreme Court told the appeals court to consider reinstating the FCC’s $550,000 fine against CBS.  

In both cases the High Court skirted the constitutional question of whether the FCC’s content controls run afoul of the First Amendment.  Last week’s profanity decision, for instance, was decided on procedural grounds (upholding the FCC’s right to change its indecency policy) and only then by a slim 5-to-4 vote.

In both cases too, the courts of appeal had sided with the networks and against the FCC.  The First Amendment question will now most likely be addressed specifically at that appellate level and, one hopes, make its way back to the High Court for a definitive ruling.  

We know that the Supreme Court avoids reaching constitutional questions when a case can be decided on other grounds.  That’s exactly what happened here, so it shouldn’t come as a surprise.  But it’s still a disappointment.

On a bright note, however, Justice Clarence Thomas said in a dissent that he thinks it’s about time to reconsider the two cases at the heart of broadcast regulation: Red Lion, which creates a lower standard of First Amendment protection for broadcasters; and Pacifica, which turns on the FCC’s authority to regulate “indecent” broadcast fare.

The openness of Justice Thomas is both refreshing and hopeful.  But, with the First Amendment question presently back at the appellate level, it will be a long time (if ever) before the Supreme Court tackles the underlying premises of Red Lion and Pacifica.  And with a new, and as-yet-unnamed justice thrown into the mix following the retirement of Justice Souter, all bets could be off.

FCC on the Offensive

Say what you will about the FCC, but you have to admit they’re a scrappy bunch when it comes to pursuing their crackdown on broadcast “indecency.”  First they persuaded the U.S. Supreme Court to hear the case they lost in the U.S. Court of Appeals for the Second Circuit – the one about Cher and Nicole Ritchie uttering a couple of verboten words during Fox’s “Billboard Music Awards” shows.

Now the FCC crowd is asking the Supreme Court to hear yet another indecency case they lost – this one in the Third Circuit involving the infamous Janet Jackson wardrobe incident during the 2004 Super Bowl halftime show on CBS.

The Supreme Court hasn’t even ruled on the Fox case yet, and in fact heard oral argument only about a month ago (Nov. 4).  But the word on the street is that the justices seemed sympathetic to the FCC’s arguments in Fox – perhaps even sympathetic enough to rule in the agency’s favor.  Handicappers are predicting that a vote favoring the FCC would be slim (say 5 to 4) and decided on narrow procedural grounds, rather than reaching the constitutional issues.  IF the vote goes the FCC’s way at all, that is.  

The common wisdom, of course, is that predicting Supreme Court decisions based on oral argument is a fool’s errand.  So, an unreliable prediction that foresees such a tepid outcome would seem a double whammy, enough to give one pause.

But not the FCC.  They reportedly are buoyed by the oral argument in Fox to the point that they want to pile on with the Janet Jackson matter.  The Commission did, however, request that the High Court defer a decision on whether to hear the Third Circuit case until after the Court rules on the Second Circuit case.   

This begs the question of why the Commission petitioned the Court at this particular time at all.  (The Court is not likely to issue a ruling in Fox until next spring or summer.)  Maybe this is just the Commission’s way of warning broadcasters that the indecency watchdog is not about to roll over and play dead.  To this observer, however, it seems a transparent ploy that might well prove all bark and no bite.