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WASHINGTON -- Taking up one of the first items on its 2006 agenda, the Senate Commerce Committee today began considering legislation that would enable broadcasters to block the recording of certain audio and video programs in an effort to combat piracy.

The Federal Communications Commission instituted broadcast flag rules last year, but in May a federal appeals court said that the FCC had overstepped its authority and struck down the rules. Those rules would have allowed broadcasters to encrypt programs with status bits indicating that the encrypted program could not be recorded or could be recorded only with certain restrictions, such as a lower-quality recording or a one-time recording. Digital recording devices would then have recognized the bits and alerted ("flagged") the viewer or the listener about the restrictions.

Broadcasters say that such flags help prevent piracy, but researchers and consumer groups counter that the flags intrude too far into fair noncommercial use of broadcast material.

Senator Ted Stevens (R-Alaska), who chairs the Commerce Committee, said that the committee had asked the FCC to create the regulations and that he intends to push for passage of a bill sponsored by Senator Gordon Smith (R-Oregon) to authorize the implementation of flags. "We have to take some action," Stevens said.

Broadcasters Favor Rules

Broadcasters today asked the committee to support the legislation because of the threat of piracy. Andrew Setos, president of engineering at Fox Entertainment Group and co-creator of the flag technology, said that retransmission of content threatened the quality of "uniquely American" free local TV broadcasts.

If multiple retransmissions were not stopped, Setos said, providers of high-quality content would take their material to cable channels, which have the right to protect it, gradually lowering the quality of free television. "Local television will wither and die," he said.

Jonathon Band of the American Library Association, however, said "the flag is detrimental to the public." His main complaint relates to flag technology's infringement on the retransmission of copyrighted work over the Internet for educational purposes.

Leslie Harris of the Center for Democracy and Technology contested the legislation, too, saying that it would endanger civic discourse. For example, she said, it would no longer be possible to air a portion of a news show on a political blog.

"The flag rule requires ongoing government involvement," she added. "[This bill] would make the FCC the gatekeeper for new innovations."

Art Brodsky of Public Knowledge, a consumer advocacy group that took the initial FCC ruling to court, agreed with Harris. "When companies [take new technology] to the FCC, they take out features that may cause too big a fuss. It's self-technological censorship."

Danny O'Brien of the Electronic Frontier Foundation, another litigant against the FCC in the May case, said, "There is a real danger of killing something before it's been born."

Audio Flags

Music industry officials who testified concentrated on the audio flag rule in the legislation. Audio flags weren't included in the original FCC regulations but are included in the Smith bill.

Mitch Bainwol, CEO of the Recording Industry Association of America, said that the music industry would suffer much more than the television industry because new digital radio services would "effectively turn radio into a music library."

While the video flag has support from manufacturers, content providers, and broadcasters, the music industry has not reached a consensus on implementing audio flags. According to Dan Halyburton, testifying on behalf of the National Association of Broadcasters, the association supported the video flag but had concerns that the audio flag could stall the roll-out of digital radio.

Stevens acknowledged that the audio flag provisions in the bill added their own complications, but he said that there must be a timetable in the bill to induce the radio industry to work toward a compromise.

Technological Impact

Though some manufacturers have already made digital recorders that are compatible with the flags, manufacturers like Philips Electronics want at least 18 months to prepare for the change if the bill becomes law. "It's a normal cycle to integrate the solutions," said Philips vice president Tom Patton.

If the legislation does not pass, products equipped with the flag technology and already on the market will not be affected.

Bill's Future

Stevens said that the committee would work on the bill before turning it over to the full Senate for a vote, but O'Brien of the Electronic Frontier Foundation remained hopeful that there would be no bill. "The more people look at the idea, they see how complicated it can be," he said.

"There should be a tweaking of copyright law or perhaps allowing the market to sort itself out," O'Brien said. "All along, that has been the best idea."

Stevens said a lot of the opposition to the bill came from within the committee. Senator John Sununu, R-New Hampshire, a member of the committee, questioned the need for the bill, saying that whenever a new technology, like the radio or the VCR, is introduced, it is seen as a threat to the broadcast industry. "Maybe the sky really is falling this time," Sununu said, "but I think it's worth offering a little bit of skepticism on this."