Order Against Comcast Issued, FCC Credits EFF

Legal Analysis by Fred von Lohmann

The FCC has finally published its order (adopted on August 1) directing Comcast to stop blocking BitTorrent traffic. The 34-page ruling makes for surprisingly enjoyable reading, at least as FCC publications go. The order follows the basic outline that was explained by Chairman Martin in his statement on August 1, 2008. But there are some interesting additional tidbits:

• The FCC specifically cites and credits EFF's testing in discussing Comcast's BitTorrent blocking activities. And it also relies explicitly on evidence gathered by individual Internet users Adam Lynn, Jeffrey Pearlman, David Gerisch, Dean Fox, and Robert Topolski. The order concludes with this remarkable invitation: "We invite ... members of the public to keep a watchful eye on Comcast." And, as it happens, EFF is building the Switzerland network testing tool to help Internet users to do just that!
• The Commission dismisses Comcast's claim that it was merely "delaying" BitTorrent traffic as "verbal gymnastics," specifically finding that "the company has engaged in blocking." Glad to see we can put that semantic debate to rest.
• The FCC sets out a standard for reviewing discrimination undertaken in the name of "reasonable network management": the "practice should further a critically important interest and be narrowly or carefully tailored to serve that interest." According to the FCC, even if congestion management was "critically important," Comcast's methods were hopelessly over- and under-inclusive. The Commission cited EFF's testing on this point, noting that Comcast admitted to blocking BitTorrent seeding without regard to neighborhood congestion or user-specific bandwidth usage.
• Also in accord with the comments submitted by EFF, the FCC called Comcast out for its failure to disclose its practices to its customers, noting that "Comcast's first reaction to allegations of discriminatory treatment was not honesty, but at best misdirection and obfuscation."
• The FCC spends 12 pages justifying its regulatory authority to issue the order, invoking its Title I "ancillary jurisdiction" to regulate in the name of "national Internet policy" as described in seven statutory provisions, all of which speak in general terms about "promoting deployment," "promoting accessibility," "reducing market entry barriers," and the like. Reading this section of the order, one can't help but feel sympathy for Commissioner McDowell, who in his dissent worries that "under the analysis set forth in the order, the Commission can apparently do anything so long as it frames its actions in terms of promoting the Internet or broadband deployment." If Comcast sues to overturn the order, you can be sure that this is where it will focus its attack.
• And now for the remedy. Quoting Ronald Reagan's mantra, "trust but verify," the Commission has ordered Comcast to do 3 things within 30 days:
  

  (1) disclose to the Commission [but not the public?] the precise contours of the network management practices at issue here, including what equipment has been utilized, when it began to be employed, when and under what circumstances it has been used, how it has been configured, what protocols have been affected, and where it has been deployed;

  (2) submit a compliance plan to the Commission with interim benchmarks that describes how it intends to transition from discriminatory to nondiscriminatory network management practices by the end of the year; and

  (3) disclose to the Commission and the public the details of the network management practices that it intends to deploy following the termination of its current practices, including the thresholds that will trigger any limits on customers’ access to bandwidth.

So, while we continue to be worried about the future risk of regulatory capture of the FCC by large ISPs, and have our doubts about the Commission's authority to regulate the Internet, the order hits the nail on the head when it comes to analyzing what Comcast actually was up to.

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Victory for DVRs in the Cloud

Legal Analysis by Michael Kwun

Twenty-four years ago in the Sony Betamax case, the Supreme Court declared that using a VCR to "time-shift" — to record a television program for viewing at a later time — was a fair use. Today, the Second Circuit rejected [PDF] an attempt by the content industry to change the rules of the game if your video recorder is stored "in the cloud" on the Internet.

In March 2006, Cablevision announced that it would be launching a "remote storage" DVR (RS-DVR) system that would operate much like a TiVo, except that the recordings would be stored on hard drives in Cablevision buildings rather than on a box under a consumer's television. A collection of studios and networks sued Cablevision, arguing that RS-DVRs would violate copyright.

Wait, doesn't the Sony Betamax case say that time-shifting is legal? Yes, but that's not what the plaintiffs complained about. Indeed, they carefully avoided attacking what the consumers would be doing. They instead argued that an RS-DVR is different, because Cablevision is making the copy, and that somehow makes all the difference.

Cablevision, supported by EFF and other amici, explained that this was the wrong way to think about things. When a consumer presses the record button on a remote control, it's the consumer who's making the copy, regardless of whether the copy is being stored on a hard drive a few feet away, or in a data center miles away. Although the district court agreed with the plaintiffs, the appellate court today resoundingly sided with Cablevision, EFF, and the other amici that supported Cablevision:

In the case of a VCR, it seems clear . . . that the operator of the VCR, the person who actually presses the button to make the recording, supplies the necessary element of volition, not the person who manufactures, maintains, or, if distinct from the operator, owns the machine. We do not believe that an RS-DVR customer is sufficiently distinguishable from a VCR user to impose liability as a direct infringer on a different party for copies that are made automatically upon that customer’s command.

This is exactly the right result. As we pointed out in our amicus brief, a rule holding Cablevision liable merely because it housed and maintained the servers in this case could imperil a wide variety of innovative business models that rely on the use of remote computing, ranging from examples like Internet-enabled self-service photo processing and printing, to cloud computing services offered by companies like Amazon, Apple and Google.

That's not all there was to cheer in the Cablevision decision. The court also reminded everyone that in order to be a "copy" for purposes of copyright law, a work must be "sufficiently permanent or stable to permit it to be . . . reproduced . . . for a period of more than transitory duration" (here, the court concluded that data in temporary buffers in the Cablevision system that would be overwritten in, at the longest, 1.2 seconds were of transitory duration). In the digital age, where routers and caches often make fleeting copies of bytes in the ordinary course, this was welcome news.

And, finally, the court rejected the plaintiffs' argument that Cablevision was engaging in unauthorized public performances. The way the Cablevision system was designed, every time a consumer decided to record a given show, Cablevision would store a separate copy of that program, and each of those copies could be played back only by the consumer who recorded it. The plaintiffs urged the court to hold that if 1000 copies of the season finale of Desperate Housewives are played back in 1000 households, that's a public performance. The court instead correctly concluded that each of those copies is playable in only one household, which means that we're talking about 1000 private viewings, not a public performance.

Just three years ago, in MGM v. Grokster, the Supreme Court proclaimed that copyright law should "leave breathing room for innovation and vigorous commerce," and today the Second Circuit has done just that.

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Wanted: Prior Art to Bust Firepond/Polaris Patent

Deeplink by Emily Berger

The Patent Busting Project fights back against bogus patents by filing requests for reexamination against the worst offenders. We've successfully pushed the Patent and Trademark Office to reexamine four of the ten patents on our Most Wanted list, and now we need your help to bust another.

A company called Polaris has a patent on a method for telling whether or not an incoming message (e.g., an email) is a simple, standard request that can be answered automatically, and, if so, for answering it. The method processes incoming messages by consulting two databases: a database of IF-THEN rules, and another database of previously classified messages (cases). In other words, Polaris claims to have invented the basic concept of almost any technology that is used to determine whether the message can be answered automatically or must instead be forwarded to a human being.

To bust this overly broad patent, we need to find prior art that describes a product made before 1997 in this way. Take a look at the description and please forward it to anyone you know who might have special knowledge related to natural language processing. Prior Art can be submitted here.

We anticipate that a lot of useful prior art will lie in the area of helpdesk automation or customer service automation or in server software. Consider specifically:

• Helpdesk automation systems that automatically respond to user queries or
• Systems that help customer service operatives identify solutions to user problems by means of both rule and case databases.

Where to send information on prior art:
Email: priorart@eff.org
Web submissions: http://w2.eff.org/patent/wanted/contribute.php?p=firepond

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EFF to FCC: "Reasonable Network Management" Requires Transparency

Deeplink by Fred von Lohmann

In response to the FCC's inquiry into Comcast's interference with BitTorrent traffic, EFF filed comments yesterday urging the FCC to make it clear that ISPs must, at a minimum, adequately disclose their "network management" practices before they can hide behind the excuse of "reasonable network management."

The FCC has invited public comments regarding the Comcast BitTorrent blocking affair in response to two petitions: one filed by Vuze (formerly Azureus) and another filed by the Media Access Project, FreePress and Public Knowledge. (The recent public hearing in Boston, in which Comcast paid people to fill seats, was also part of this same proceeding.)

The central question in the proceeding is whether Comcast has violated the four neutrality principles set out in the FCC's Internet Policy Statement. It seems clear that Comcast's protocol-specific interference with BitTorrent traffic violates those neutrality principles. In response, Comcast (and other ISPs) have offered the excuse that it was all "reasonable network management" -- a catch-all exception to the FCC's neutrality principles.

In its comments to the FCC, EFF urges the agency to clarify that the "reasonable network management" exception to its neutrality principles should only apply where an ISP has adequately disclosed the existence and likely consequence to customers of its discriminatory practices. After all, if we believe that market forces are our first line of defense against unreasonable ISP behavior, those forces can only work if customers, competitors, innovators, and policy-makers know what the ISPs are up to. On that score, Comcast has obviously fallen short, issuing a series of denials, evasions, and half-truths for 10 months after its own customers caught them interfering with BitTorrent traffic. The FCC needs to send a message to Comcast and other ISPs that this is unacceptable.

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Barracuda Networks Asks For Help in Defending Free and Open Source Patent Claim

Deeplink by Emily Berger

Barracuda Networks Inc. today announced that it plans "to defend itself, the open source community and the free and open source Clam AntiVirus software from a patent by Trend Micro."

The patent at issue in the litigation is U.S. Patent Number 5,623,600 and is directed generally to virus detection and removal apparatus for computer networks.

Basically Trend Micro's claim is that Barracuda infringed its patent by incorporating into its products the free and open source Clam AntiVirus software, which scans for viruses at the mail gateway. EFF has long worried that bogus patent claims could threaten the free and open source software community, and we'll be watching this case closely. While this claim was made against a company using the tool, if it's successful the same argument could be targeted at a university or even an individual, so it's important to pay attention at the early stages.

Barracuda has asked for help from the community in seeking prior art for the patent, much as EFF does in its Patent Busting Project. As FSF's Eben Moglen says, "[c]ollective defense from software patents is a shared responsibility for everyone in the free software ecosystem.”

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Latest Test for DMCA Safe Harbors: Warner Sues SeeqPod

Deeplink by Fred von Lohmann

Warner Music Group has sued SeeqPod (complaint, 500k PDF), a "Web 2.0" music search engine (combined with embedable playlists, etc, etc) that has been gaining in popularity in recent months.

This is the latest in a string of lawsuits against Web 2.0 companies. Together, the suits represent an attack by the entertainment industry on the DMCA safe harbors that protect hosting services and search engines. Other similar cases have been filed against YouTube, MP3Tunes.com, Veoh, PornoTube, and Divx/Stage 6.

The SeeqPod case is different, however, because it is among the first that directly tests how copyright law applies to search engines. Despite the success of search engines like Yahoo and Google, there has been remarkably little case law developed on the copyright front. Part of the reason is because Congress stepped in with the DMCA safe harbors in 1998, creating some degree of certainty where the background legal concepts (e.g., contributory infringement) did not. In addition, by endorsing a notice-and-takedown regime, the DMCA safe harbors created a solution for many copyright owners that is cheaper than litigation.

But now, as search engines become more specialized and capable, certain copyright owners have become increasingly dissatisfied with the notice-and-takedown bargain struck in the DMCA. That's what these lawsuits are really about -- the defendants are complying with the letter of the law, but copyright owners are now trying to change the rules in court.

Of course, the SeeqPod case may settle (as a similar case brought by Warner against iMeem did). But the copyright issues will not be going away anytime soon (in particular, keep your eye on the remand in the Perfect 10 v. Google case, where the DMCA safe harbor issues may take center stage).

UPDATE: LA Times reporter Jon Healey has an interesting post about the case over at his Bit Player blog, suggesting that SeeqPod is unfairly trying to evade royalty obligations that its competitors must pay. We spar more over this in the comments over there.

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Does Peace with UMG Mean Downgrade for XM Subscribers?

Deeplink by Fred von Lohmann

XM and Universal Music Group (UMG) have apparently settled their lawsuit over XM's Inno (we explained the details in a May 2006 post when the suit was filed), the little receiver/recorder that promised to be like a TiVo for your satellite radio subscription. Early reports only speculate about the terms of the settlement, suggesting that XM is probably paying a royalty to UMG for every Inno sold.

That's bad enough, as it sets a precedent that record labels can effectively tax innovators for building new technologies (UMG also pressured Microsoft into paying a royalty on every Zune). But the real question is whether XM will "downgrade" the features that the record labels object to -- like the Inno's ability to record only artists you specify and randomly access individual tracks (the record labels complain that this makes the Inno too much like an iPod, and that copyright law is somehow responsible for policing the boundaries between iPods and radios and computers and ... and...). Many will recall that the RIAA has been pushing for new laws like the PERFORM Act and FCC regulations that would prohibit these features, leaving us in a world where digital audio recorders are artificially left less capable than even the original TiVo video recorders.

So, any of you who own an XM Inno, please let us know if you get a mandatory "upgrade" that downgrades your device.

UPDATE: a helpful Inno owner tells us: "The firmware on the Inno apparently can only be changed via a USB cable using special software on your PC. They've gone through several versions including the famous 1.05 where the illegally high powered FM modulator could be enabled at any time. Later versions turned off this feature, but many people still cling to their 1.05 version Innos in spite of the bugs." So it appears that Inno owners may be protected from mandatory "downgrades," but at the expense of not getting other new features.

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