By Jeff Linehan

From the news headlines, the most recent dustup between the Bush administration and Democrats in the House of Representatives seems to revolve around immunity for telecommunication companies that cooperated with an unlawful government wiretap program after 9/11. The tone of coverage has reinforced political stereotypes: President Bush endorses the Senate version of new surveillance legislation because he wants carriers like AT&T and Verizon to continue to fight terrorism, while the Democrats refuse to give immunity so billion-dollar class action lawsuits can take down big business.

In reality, the issue of immunity distracts from the real issues Congress desperately needs to address — that laws governing national security surveillance have been inconsistent, out-of-date, and defied by the intelligence community. But repeated incendiary partisan rhetoric in media coverage has overshadowed the need for new legislation.

The controversy started when the House voted against extending the “Protect America Act” on Feb. 13, days before the law’s February 16 sunset clause deadline. In his February 16 radio address, the president expressed his displeasure with this outcome. “Because Congress failed to act, it will be harder for our government to keep you safe from terrorist attack. At midnight, the Attorney General and the Director of National Intelligence will be stripped of their power to authorize new surveillance against terrorist threats abroad.” (http://www.whitehouse.gov/news/releases/2008/02/20080216.html) But the government’s ability to monitor domestic electronic communications did not end on February 16.

The intelligence community has conducted most surveillance on foreign and domestic communications under the Foreign Intelligence Surveillance Act (FISA), passed in the late 1970s. But the law required the government to receive federal court orders before conducting any domestic wiretaps. To get such court order, the government needed to show probable cause that the target of the surveillance was “an agent of a foreign power,” with “no substantial likelihood” that a person monitored is a U.S. citizen. (http://www.law.cornell.edu/uscode/html/uscode50/usc_sup_01_50_10_36_20_I.html) The passage of the Protect America Act in 2007 would only temporarily amend these sections of FISA, but this legislation gave unprecedented power to the National Security Administration (NSA) to conduct surveillance on domestic phone calls, e-mails, and text messages, without a warrant or court order. The Act required that this electronic communication actually target a party “reasonably believed to be outside the United States,” which could cover a call between a U.S. citizen and a suspected terrorist abroad. (http://thomas.loc.gov/cgi-bin/query/D?c110:3:./temp/~c110AGz9Sz::)

The press has almost universally ignored the bi-partisan nature of the House vote not to extend the Protect America Act. Most reports framed the expiration of the law as a purely Democratic action, lending credence to the White House’s argument that the Democrats sabotaged security efforts. Eric Lichtblau of the New York Times wrote, “House Democratic leaders last week allowed the temporary surveillance law to expire rather than submit to White House demands.” (“More Sharp Words Traded Over Lapsed Wiretap Law,” Feb. 23) Indeed, the expiration was not a plot carried out by Democrats, because records show that out of the 225 Democrats voting February 13, 191 voted to extend the Act. But all 229 Republicans present voted “No,” a fact barely mentioned in news coverage. (http://clerk.house.gov/evs/2008/roll054.xml) In fact, those Democrats supporting the extension voted “Aye” because the resolution would only extend the Act three more weeks, pending further negotiation over telecom immunity. House Republicans and the President himself opposed this extension, and subsequently framed the vote as though the House’s Democratic leadership chose the lawsuits over security interests.

Furthermore, the NSA’s practice of wiretapping without court orders did not begin with the passage of the Protect America Act last summer; this is precisely the reason these lawsuits arose. The NSA started the “Terrorism Surveillance Program” (TSP) shortly after 9/11 that sped up the process of obtaining wiretaps, rendering FISA’s probable cause requirements as some of the earliest casualties of our war on terror. The New York Times uncovered the program in 2005, reporting that up to 500 people in the United States were monitored at any given time. The program’s constitutional issues caused controversy until January 2007, when former Attorney General Alberto Gonzales reassured the Senate Judiciary Committee that the federal court designated by FISA would now oversee and grant orders for the NSA’s surveillance.

But to conduct the contested surveillance between 2002 and 2007, the government had enlisted the help of telecommunication companies like AT&T, BellSouth, and Verizon. The legal departments of these providers probably took comfort in the FISA provision that bars civil causes of action against those companies that “furnish assistance” for wiretapping conducted under FISA. But Gonzales essentially admitted that no judge gave orders for TSP surveillance, leaving the telecoms in uncertain legal waters. Since 2006, telecom customers and public interest groups have brought over 40 class action lawsuits, seeking civil penalties from those companies that participated. The suits now wait pending in the Northern District of California.

The White House has argued that the House’s failure to extend the Protect America Act — or to adopt legislation with retroactive immunity for the phone companies — has resulted in their reluctant cooperation. Greg Miller of the Los Angeles Times repeated the Administration’s talking point, writing that officials claim “the nation has lost potentially critical intelligence during the [week following the vote] because telecommunications companies cut their cooperation with the government.” Later in the same piece, Miller noted that the Justice Department and Office of National Intelligence admit telecom companies “intend to cooperate for the time being.” (“Standoff intensifies over spying legislation,” Feb. 23) Outside of these remarks, the only telecom company known to decline wiretap participation is Qwest, a phone service carrier to the West and Midwest, which refused government requests in 2006. (http://www.usatoday.com/news/washington/2006-05-10-nsa_x.htm)

But upon the expiration of the Protect America Act in February, any orders given under the law would still remain in effect until July 31, 2008. That means that any wiretap or monitoring in place before last February 16 is still legally permissible, even without a court order. Many journalists’ reports were along the lines of Ben Fuller of the Associated Press, who wrote, “on Feb. 16…the rules reverted to those outlined in the 30-year-old Foreign Intelligence Surveillance Act.” (“Bush Lobbies Again for Surveillance Law,” Feb. 25). But while technically correct, this implies that the House’s failure to extend the Protect America Act all but crippled our intelligence community. In reality, however, if the government identifies an emergency threat, the NSA could even conduct surveillance under FISA without getting a court order first; the attorney general merely has to notify the federal judge within 72 hours. (50 U.S.C. §1805(f))

On March 14, the House passed a new set of amendments to FISA, which predictably did not give retroactive immunity to any telecom companies involved in the NSA’s old program. President Bush has promised to veto the bill. But the question remains whether the 40 class- action lawsuits have enough merit to justify this back and forth bickering. Provisions of FISA — which arguably controlled during the NSA program — allow for an illegally monitored individual to collect actual and punitive damages. The best bellwether for the outcome of these cases comes from the American Civil Liberties Union’s unsuccessful suit against the NSA. In January 2006, a Michigan District Court judge declared that the Terrorist Surveillance Program violated freedom of association and privacy, and rights against unreasonable searches. But on appeal, the Sixth Circuit Court of Appeals reversed, holding that because plaintiffs could not show evidence that their individual communications had been monitored without a warrant, and because the government refused to give up information under the “states secret doctrine,” the plaintiffs had no cause of action. (http://fl1.findlaw.com/news.findlaw.com/nytimes/docs/nsa/aclunsa70607opn.pdf)

The states secret doctrine bars the discovery or admission of evidence that would “expose [confidential] matters which, in the interest of national security, should not be divulged.” (United States v. Reynolds, 345 U.S. 1, 10 (1953)) The White House wants these suits dismissed to insulate the telecom companies from its own illegal spying program and perhaps even to prevent more incriminating evidence from surfacing in court.

A divided House passed a FISA amendment with possible solutions on March 14. Instead of stopping the lawsuits altogether, House Democrats would send the claims to a federal court “ex parte,” keeping the proceedings closed from plaintiffs and the public. The telecom companies could argue their case using evidence the government deems to be worthy of the state secrets privilege, and the plaintiffs could receive judicial review of their claims. (“House Passes a Surveillance Bill Not to Bush's Liking,” The Washington Post, March 15)

But the president has promised to veto any bill that refuses an immunity grant, and since the amendment passed 213-197, most insiders predict the House amendment will not survive. Meanwhile, as our government and press argue over who should be liable to a group of potentially illegally monitored Americans, our country continues to fight 21st century security threats under Nixon-era legislation.

All Bark and No Bite?

By Jeff D. Linehan

Last December, the FCC voted to modify a 32-year-old regulation that prevented one company from owning both a daily newspaper and a broadcast station in a single market. The agency instituted the ban in 1975 to prevent large media companies from gaining monopolies in the communications industry (50 F.C.C.2d 1046). Since then, reaction to the regulation has often been split along political lines, with Republicans claiming the rule restricts the free market, and Democrats claiming the rule necessary to protect less powerful media voices. But the five-member Commission’s decision to overturn the ban —in a 3-2 vote, along party lines — follows more than a decade of controversial attempts to circumvent it, often to the benefit of big media outfits. After so many years of discussion, it is disheartening to see how much the media missed in reporting this story.

December’s rule change, propelled by FCC chairman Kevin Martin, hardly came as a surprise to industry observers. In 2002, when the Michael Powell-led FCC conducted its biennial review of television ownership laws, the agency ruled that the cross-ownership ban was no longer “necessary in the public interest as a result of competition,” pursuant to the guidelines of the 1996 Telecommunications Act. (18 F.C.C.R. 13620, 13638) In July of 2003, the FCC approved new rules that allowed cross-ownership in up to 170 markets. (http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-278932A1.pdf)

Shortly thereafter, a citizen media group, Prometheus Radio Project, challenged this ruling in the Third Circuit, winning a motion to stay the effect of the new rules. (373 F.3d 372) The federal court agreed with the agency’s arguments that a blanket ban was no longer necessary to protect diversity of media voices, but found the FCC’s methodology for arriving at this conclusion (a statistical method called the “Diversity Index”) to lacking a solid rationale. The court instructed the FCC to redraft their cross-ownership rules with a better rationale, retaining jurisdiction over future review.

After ordering ten research studies and holding public hearings around the country since September of 2006, Martin finally released a summary of the proposed amendments in a New York Times editorial, in which he described the rule as a “relatively minor loosening” of the only regulation that had not been modified since the 1970s. (http://www.nytimes.com/2007/11/13/opinion/13martin.html) The cross-ownership ban would no longer apply to the country’s 20 largest metropolitan markets, given two qualifying circumstances. First, there had to remain at least eight “major media voices” (TV stations or major newspapers) in the market for a TV/newspaper transaction to occur. Second, a company that owned a newspaper at the time of the transaction could not buy a TV station among the top four stations in the market. Beyond the top 20 markets, the FCC would allow a cross-ownership transaction to occur if (1) if the media outlet to be purchased was “failing” financially, or (2) if the transaction would result in at least seven new hours of local broadcast news per week. The FCC would “adopt a presumption” that all other transactions would be contrary to the public interest, and remain “unlikely to approve such transactions.” (http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-216A1.pdf)

Given the complexity of the regulatory order, it is not surprising that media coverage glossed over some of the finer details of the FCC’s ruling. But most reporters not only missed nuances in the story. They got it wrong.
For example, most journalists’ description of the rule tended to overstate the scope of the rule change, either by minimizing the order’s qualifying circumstances, or failing to discuss them altogether. John Dunbar of the Associated Press, quoting FCC Commissioner Copps’ dissent, referred to FCC Chief Martin’s description of the “minor loosening” in the rule as “one that would make George Orwell proud.” (“FCC Chief Defends Media Ownership Plan,” Dec. 24, 2007 - http://apnews.myway.com/article/20071224/D8TO41Q81.html) Neda Ulaby of National Public Radio covered the FCC’s vote at a Dec. 18 hearing, and reported that the rule change contained “loopholes” and “provisions [that] are vague.” Rather than actually describing the terms of the new rule, she quoted Media Access Project president Andrew Schwartzman, stating that cross-ownership was now possible in “any market in the country as long as you can meet the FCC standard, which essentially amounts to being whatever three FCC commissioners say it is.” (“FCC Lifts 'Cross-Ownership' Ban Despite Protests,” Dec. 18 - http://www.npr.org/templates/story/story.php?storyId=17371569)

In addition, though reporting the fact that 25 U.S. senators signed a letter to the FCC chairman on Dec. 14 threatening to push for a congressional veto of the FCC’s ruling, few reported correctly as to why. Peter Kaplan of Reuters attributed the senators’ dissatisfaction to the fact that “the FCC had not spent enough time studying the issue and seeking input from the public.” In his piece, he offered the response, made by the commission’s Republicans, stating that “the FCC has been studying the media ownership issue and soliciting public opinion for years.” (“Senators threaten to revoke FCC media ownership vote,” Dec. 17 - http://www.reuters.com/article/domesticNews/idUSWAT00859020071218)

But that response was misleading. The senators objected to more than the brief public comment period between the release of the proposed rule on Nov. 13, and the mid-December vote, or even the number of public hearings held. The senators argued that, “…no one attending those meetings submitting comments could have been prepared to assess a proposed rule that did not [yet] exist.” (http://dorgan.senate.gov/documents/newsroom/121707fccvote.pdf) Indeed, the FCC’s last public hearing on media ownership, held in Seattle on Nov. 9, actually pre-dated the release of the rule change.

If more journalists researched these public hearings, they would have noticed that the FCC accelerated its schedule before releasing the rules to the public, giving minimal notice to the final two hearings. The Los Angeles Times’ Jim Puzzanghera was one of the handful who got it right: “Martin accelerated the process in October, rushing to hold the final two public hearings with minimal notice and proposing to vote on a plan Tuesday, just a week after public comments were due at the FCC.” (“Defiant FCC chief refuses to delay vote,” Dec. 14) Since 2006, the agency had given at least a one month-long notice before most of the public hearings took place. The Chicago public hearing, held September 20, was announced months before, on July 19. The agency announced the Tampa, FL hearing March 30, before it was held on April 30. In contrast, the FCC announced the two hearings immediately preceding the release of the proposed rule, in Washington, D.C. and Seattle, only one week before their respective dates. (www.fcc.gov/kjm121807-ownership.pdf)

Interestingly, and probably not coincidentally, this rush to the vote coincided with the attempts of Tribune Co. to seek FCC intervention that would allow the financially struggling company to go private, under ownership by a Chicago investor. Over the last decade the company had already acquired several broadcast station-newspaper combinations that violated the cross-ownership ban, but Tribune managed each time to avoid legal action. The FCC had, just prior to the 2002 attempt to modify the ban, granted temporary waivers for Tribune’s violations. The company could also wait until some of its broadcast stations needed license renewals before a violation technically occurred. However, once the company announced its pending sale in April of 2007, several industry noted that the waivers and licenses granted to Tribune would not transfer in the event of a sale, making the transaction legally impossible under current rules; that is, until the FCC could change them. (“Tribune appeals FCC ruling denying cross-ownership waivers,” The Associated Press, Dec. 6, 2007 - http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2007/12/06/financial/f150833S71.DTL) Once again, the company requested waivers — this time, permanently — for its contentious holdings.

On Nov. 30, in another 3-2 vote, the agency denied Tribune permanent waivers for its four combinations, but (and this is important) stipulated that if the company challenged the FCC’s ruling, its current waivers would extend for two additional years —or six months after the end of ensuing litigation, whichever lasted longer. Tribune took the FCC up on its invitation, of course, and appealed the order immediately. (http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-278697A1.pdf)

Too few reports remarked on the uncanny timing of this ruling for Tribune’s investors. Some journalists misstated the action as though the FCC had taken affirmative action in granting more temporary waivers. Thomas S. Mulligan of the Los Angeles Times wrote, “In its vote Friday, the FCC…granted [Tribune] at least two years of grace in all five markets.” (“Next test for Tribune: debt load,” Dec. 1, 2007) In reality, the ruling was not a grant by the FCC. It was, however, certainly “a feat of rare regulatory contortionism” as aptly described by dissenting commissioner Jonathan Adelstein. (http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-211A3.pdf) The proposed rule change would have excused Tribune’s broadcast/newspaper combinations, but because the vote was scheduled for mid-December, any revision to current rules would go into effect in 2008, at the earliest. By allowing for Tribune to extend its waivers and licenses for several months, the FCC in effect allowed the sale to close before the end of last year, helping the company save an estimated $100 million in taxes. (“Tribune Gets Temporary Waivers To FCC's Cross-Ownership Rule,” Dec. 1 - http://www.washingtonpost.com/wp-dyn/content/article/2007/11/30/AR2007113002106.html?nav=emailpage)

Interestingly, the official text of the rule change (http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-216A1.pdf), places the FCC’s new analysis under the potential scrutiny of the Third Circuit. And citizen media groups like Schwartzman’s Media Access Project have threatened to challenge the ruling once again. The senators’ demand for the FCC to give more notice may appear, in hindsight, to have been prudent advice for the agency. In Prometheus Radio Project, the court instructed the FCC to cure its “questionable notice” when forming new ownership rules, so that “any new ‘metric’ for measuring diversity and competition in a market be made subject to public notice and comment before it is incorporated into a final rule.” (373 F.3d 372, 412)
Whatever results from pending judicial review, the cross-ownership ban clearly failed to prevent big-business consolidation when in effect, so Martin may have been accurate, after all. If the FCC refuses to enforce its own regulation, could that rule be any more irrelevant?

 The Assumed Violations of YouTube

By Jeff D. Linehan

After the video-sharing site YouTube announced in October that it will soon be utilizing a new “fingerprint” technology to identify copyright infringements, the news media quickly linked the story to the high-profile lawsuit brought against the company earlier this year. Viacom’s $1 billion claim, filed with the District Court of the Southern District of New York in March, 2006, served as the media’s back-story for the Google-owned YouTube’s new efforts to remove offending videos uploaded by users.

The site’s proposed new fingerprint system will use original videos submitted by copyright owners as “reference files” in the site’s database. Any new video uploaded to the site would be tested against reference files to identify infringements. (For this method to work, media companies will have to hand over content, and so far only the Walt Disney Co., Time Warner, Inc., and Hearst-Argyle Television have agreed to test their material.) If YouTube then finds an upload matches a reference file, the owner could opt for the video to be blocked, or could negotiate advertising or promotion deals with the site.

The press framed their articles on the new technology as though YouTube tried to mitigate their legal liabilities in response to the Viacom lawsuit. Such stories carried the implicit assumption that YouTube’s new infringement-control technology meant to rectify old methods that ran afoul of the law.

Summarized by the Associated Press, “YouTube's previous lack of copyright protections for video content prompted Viacom Inc. to sue” (‘YouTube Unveils Anti-Piracy Filters,’ Oct. 16, via FoxNews ); According to the New York Times,),“Whether the system will work well enough to satisfy media companies who have been irked by the proliferation of unauthorized copyrighted clips on YouTube is not yet clear,” (‘Google Takes Step on Video Copyrights,’ Oct. 16); and from BusinessWeek.com: “The pressure is on Google to come up with a better way to keep copyrighted programming off YouTube.” (‘Nabbing Video Pirates: Who Needs Google?’ Oct. 17) http://www.foxnews.com/wires/2007Oct15/0,4670,YouTubeCopyrightControls,00.html  http://www.nytimes.com/2007/10/16/business/16video.html?_r=1&oref=slogin  
http://www.businessweek.com/technology/content/oct2007/tc20071016_876447.htm?chan=top+news_top+news+index_technology  

But, in fact, was YouTube in violation of the law?
The law governing the matter can be found in the Digital Millennium Copyright Act (DMCA), passed in 1998 to update copyright laws for infringements in the Internet age (http://thomas.loc.gov/cgi-bin/query/z?c105:H.R.2281.ENR: ). In a section pertinent to the Viacom lawsuit, the Act protected Web sites, Internet service providers, and search engines with “safe harbor” provisions that eliminated monetary liability for infringements made, without their 'knowledge,' by their users. For example, a site hosting email service would not be held liable for pirated music sent over its servers from one user to another. However, according to § 512 (c) of the DMCA, (http://www.copyright.gov/title17/92chap5.html#512), once a copyright holder provides written notification to such a Web site that it is storing copyright-infringing content, the Web site must act “expeditiously to remove, or disable access to, to the material.” Note that notification by the copyright holder evidences 'knowledge' on the part of the Web site. The so-called “takedown” procedure effectively places the entire burden of policing a system’s material on the owners of infringed works.

Viacom’s complaint (http://www.viacom.com/LEGAL%20FILINGS%20AND%20COMPANY%20STATEMENTS/Viacom%20YouTube%20Federal%20Complaint.pdf) claimed that although YouTube may have followed the takedown procedures outlined above, in practical terms YouTube’s copyright protection methods did not adequately remove or disable access to infringing material as the DMCA intended. “At best these tools help copyright owners find a portion of the infringing files, and, as to that portion, only after the files have been uploaded,” the complaint stated. “However, users routinely alter as little as a frame or two of a video and repost it on YouTube where it will remain until YouTube receives a new takedown notice.” Viacom also claimed that YouTube’s key-word search function, which returns a maximum of 1,000 video clips, prevents the company from locating more infringing videos stored in the site’s database.

Viacom made a public example of the takedown notice’s impracticality in February, 2007, just months after Google’s acquisition of the popular site (in November, 2006) by requesting the removal of over 100,000 infringing clips from YouTube’s database. In place of videos, users saw notices of copyright violation, and YouTube claimed to have fully complied with the order. The astounding number of properties owned by Viacom (all the programming from MTV, VH1, and Nickelodeon, to name a few) revealed the patent inefficiency of the current takedown process.
But the argument of inconvenience alone – while illustrative for a news story – may not withstand the statutory language itself, with which, it seems, YouTube complied. Viacom’s more convincing and substantial claim attacks YouTube’s reliance on safe harbors. The DMCA requires that a Web site must “not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity.” In other words, if YouTube receives a financial benefit from any infringing content in its control, the site will not qualify for the DMCA’s safe harbor provisions.

To establish YouTube’s ability to control content, Viacom referenced the site’s Terms of Use in the complaint, noting that YouTube reserved a right to block or remove pornographic videos and hate speech. Although YouTube allows users to register for free, anyone visiting the site will quickly notice that advertisements support the site. Viacom argues that revenue derived from ads that run alongside any infringing videos amounts to a financial benefit, thereby disqualifying YouTube from DMCA liability protection. (The site currently only places ads on the main page and alongside search results; according to Viacom’s complaint, the site once positioned ads near the video player itself). Viacom points to the $1.65 billion acquisition deal with Google as proof that pirated TV programs and movies, and not amateur home videos, made the site extremely popular and lucrative. Viacom further claims that YouTube effectively had knowledge of copyright violations, and by remaining passive until receiving specific notifications, the site effectively induced user infringement.

This claim of inducement brings to mind the 2005 MGM Studios Inc. v. Grokster, Ltd. case, in which the Supreme Court found that a file-sharing program, while lawful for some legitimate purposes, primarily induced users to transfer pirated music and movies to others. But Grokster took affirmative steps to induce infringement by targeting former Napster users and by distributing an electronic newsletter with links to articles promoting music piracy. It is doubtful whether YouTube will be found to have acted similarly. As the Supreme Court noted, “The inducement rule…premises liability on purposeful, culpable expression and conduct.” (MGM Studios Inc. v. Grokster, Ltd., 545 U.S. 913, (http://www.copyright.gov/docs/mgm/opinion.pdf)

It may not seem fair, or even practical, that copyright owners have been forced to police YouTube's Web site every day to ensure that their rights have been not infringed.

But nobody ever said life, or the law, is always fair and reporters are mistaken in assuming that YouTube did anything illegal. Regardless of whether the District Court ultimately rejects YouTube’s safe harbor defense, Viacom’s lawsuit will send a strong message to ad-driven Web sites that encourage user-generated content, and hopefully result in a more balanced policy of digital copyright control.