CommLawBlog : Broadcast & Communications Lawyers & Attorneys : Fletcher Heald & Hildreth Law Firm : Telecommunications, FCC Regulation, Communications Act

As the FCC sees it, the Second Circuit panel should have focused narrowly on the particular facts of the case before it and should have assessed the FCC’s analysis of those facts, nothing more and nothing less. Instead, at least according to the Commission, the panel considered other facts and circumstances involving other cases to reach its conclusion that the overall indecency policy – not merely that policy as applied to the Fox facts – was too vague. But, the Commission argues, there is nothing vague about the notion that “fuck” and “shit” – the words uttered by Cher and Nicole Richie in the Fox broadcasts at issue – are indecent; accordingly, even if there might be some question about whether other material might or might not be deemed “indecent”, the same cannot be said of the particular material before the court.

The Commission gussies up this argument with a discussion of the standards for when a rule is “vague” as a constitutional matter, although that discussion includes, at most, only passing mention of the different “overbreadth” standard often used in First Amendment cases.  Suffice it to say that, whatever the other merits of the Commission’s argument on this point, it presupposes that the language at issue here was, in fact, “indecent”.  But since the Commission had determined in at least two cases more or less contemporaneous with its decision in the Fox case that similar language was not indecent, that assumption is obviously open to question.

The Commission also characterizes the panel’s decision as effectively rejecting the “contextual” approach which the FCC says it has taken to indecency enforcement. Other courts – including the Supremes in the Mother of All Indecency Cases, Pacifica, not to mention at least one other Second Circuit panel – have repeatedly emphasized the need for the Commission to consider “context”. Thus, the Commission argues, the Fox panel’s seeming rejection of that approach should be reviewed and reversed as inconsistent with precedent.

The problem with this aspect of the FCC’s argument is that it’s not entirely clear that the panel rejected the importance of “context” as the FCC claims. Rather, the panel appears to have been critical not of the need to consider “context”, but rather of the FCC’s less than clear – opaque, some might say – approach to how “context” is considered. While the Commission undeniably incants the term “context” in its indecency opinions, that incantation often appears to be little more than the legalistic equivalent of “abracadabra”, a rhetorical flourish with no apparent meaning or substance.

As one example – cited by the Second Circuit panel – the Commission’s contextual analysis enabled it to reach diametrically inconsistent conclusions about the use of the term “bullshitter” in a single instance, each time citing an identical contextual aspect. First, the fact that that word was aired during a news interview made it indecent; but on further thought, the Commission concluded that, because it was aired during a news interview, it wasn’t indecent. In the panel’s words, if the Commission does have any actual indecency standard, it is a standard that “even the FCC cannot articulate or apply consistently.”

The Commission’s final argument is one of apparent exasperation. As it reads the panel decision, the Commission can’t win because any changes to make its contextual analysis more predictable would raise further First Amendment concerns, subjecting the FCC to a Catch-22.

This argument is intriguing because, by making it, the Commission could be seen as conceding that, as a practical matter, indecency is not susceptible to regulation within constitutional limitations. To be sure, the Supreme Court in Pacifica held that the Constitution does permit some regulation of broadcast indecency. But the Supremes then left it to the Commission and the courts to develop, on a case-by-case basis, an appropriate analytical approach in which “context” would be all-important. If, after more than 30 years, the best that the FCC has been able to come up with is the “analysis” invoked in Fox, is it possible that the agency is incapable of regulating indecency – beyond the Carlin monologue at issue in Pacifica – constitutionally? The FCC’s rehearing petition seems to imply that.

The Second Circuit now must decide whether or not to grant rehearing, either by the original panel or en banc. While that may sound simple, it’s not. In particular, the en banc rehearing process in the federal courts ranks up there with papal elections when it comes to procedural quirks. The FCC’s petition will first be circulated to all ten active judges on the Circuit as well as Senior Judge Leval, who sat on the original panel. Any of those 11 can ask that his/her colleagues be polled as to whether or not to consider the petition. If nobody asks for such a polling, the petition is denied. If polling is requested, then the ten active judges – but no senior judges (i.e., Judge Leval doesn’t participate) – are polled. Unless a majority of those polled vote for rehearing, the petition is denied. If a majority of the poll votes to grant rehearing, then the case is re-briefed and re-argued in front of all ten active judges and Senior Judge Leval. There is no guarantee that, even if the case gets that far, the FCC would prevail. A majority of the en banc court could just as easily affirm the panel’s decision.

In other words, the FCC has a long row to hoe.

Meanwhile, a couple of other indecency cases also continue to wend their way through the Courts.

A separate panel of three judges in the Second Circuit is currently considering an appeal of the FCC decision that the broadcast of “naked buttocks” during an episode of NYPD Blue was indecent. After the Fox decision came down in July, the NYPD Blue panel asked the parties for supplemental briefs discussing the impact of Fox on the NYPD Blue case. The FCC’s terse, four page, brief noted the Commission’s belief that the facts of the NYPD Blue broadcast, which involved the scripted display of adult nudity, were very different from those at issue in Fox, which involved the utterance of unscripted “fleeting expletives”. Nevertheless, the Commission conceded that the agency’s decisions in both Fox and NYPD Blue were based on the same “contextual framework” that the Court found unconstitutional in Fox. According to the Commission, the Court’s Fox opinion therefore “appears to suggest” that the policy would be unconstitutional as applied to the NYPD Blue case as well.

As a result, the Commission suggests that the NYPD Blue appeal be put on hold until after resolution of any rehearing motion (the Commission’s NYPD Blue supplemental brief was filed several days before the Fox petition for rehearing went in). With both cases pending in the same court, it seems likely that there will not be any decision in the NYPD Blue case until the Fox rehearing request is disposed of.

And just down the road in Philadelphia, the Third Circuit is also dealing with indecency in CBS’s appeal of the Commission’s Janet Jackson/Super Bowl decision. As we reported in the April issue of our Memo to Clients, the Third Circuit, after hearing oral arguments early this year, asked for supplemental briefs on issues that could allow the court to resolve the case without addressing the constitutional questions regarding the FCC’s indecency policies. While the Third Circuit does not appear to have asked the parties to discuss the possible effect of Fox on the Janet Jackson case, CBS (the appellant) did notify the court of the issuance of Fox decision, thus suggesting that the Second Circuit’s decision was at least relevant to the Third Circuit’s deliberations. The FCC responded with a two-page letter in which it observed that the Third Circuit is not bound to follow Second Circuit decisions and that, anyway, the Second Circuit decision is flawed, and, by the way, the Third Circuit is still considering issues that might allow it to resolve the Janet Jackson case on non-constitutional grounds.

While the sparring before the various circuits is important and could prove decisive, the real question is whether – and if so, when – we’ll ever get to the Main Event. That would be review by the Supreme Court of the constitutionality of the FCC’s indecency enforcement policy as it has developed since Pacifica. Such review could have implications for the FCC’s authority far beyond the somewhat narrow issue of indecency. With the FCC’s election to seek rehearing of Fox at the Second Circuit (rather than ask the Supremes to take a look at the case), that Main Event has been deferred at least a year or two.

Frankly, I don’t see much change from Stevens. It’s pretty safe to say that the “liberal block” of the Court will affirm the Second Circuit and strike down the FCC’s regulatory scheme. (That would parallel the vote in the 1978 Pacifica case, where the four liberal survivors from the Warren Court hung together in dissent.)  Let’s also assume that Justice-designate Kagan will: (a) be confirmed and (b) vote the same way that Justice Stevens did in Stevens (no relation, obviously). So right there you’ve got Breyer, Ginsbug, Sotomayor and Kagan ready to slap the FCC down.

I think Fox also gets Justice Thomas. He was the only Justice in the 2009 Fox decision to flat out question the rationale for broadcast content regulation. His separate opinion there indicated that he’s itching to do away not only with the indecency regulations, but also with the scarcity doctrine underpinning all regulation of broadcast content.  Plus, he voted with the majority in Stevens.  And don’t forget his vote in U.S. v. Playboy Entertainment Group, Inc.  There the Court struck down a requirement that cable operators scramble sexually explicit content.  He voted with the majority, saying “I am unwilling to corrupt the First Amendment to reach this result. The ‘starch’ in our constitutional standards cannot be sacrificed to accommodate the enforcement choices of the Government.”

On the other side, I suspect that Justice Alito is the most likely to vote to reverse the Second Circuit and side with the FCC.  He was the lone outlier in Stevens and has generally seemed to be paternalistic and protective of “society’s morals” in similar cases.

That gets us to 5-1, with Chief Justice Roberts and Justices Scalia and Kennedy left. I think you might see one, maybe  two, of them side with the FCC, but not all three.   Why?

Chief Justice Roberts wrote the strong majority opinion in Stevens and was clearly uncomfortable with the lack of regulatory precision in that case.  While it’s possible that he could line up with Alito, I just don’t see it. After all, the Chief was also in the majority in the most controversial First Amendment decision of the most recent term (Citizens United v. Federal Election Commission). There is really no comparison between Fox and Citizens United, but if the Chief is going to go that far out on a limb in favor of the First Amendment, it's going to take him a while to get back in, even if he really wants to come back.

Speaking of Citizens United, that decision was written by Justice Kennedy.  He was also in the majority in Reno v. ACLU and wrote the opinion in the U.S. v. Playboy.

I originally had Scalia solidly on Fox’s side, but I began to rethink this a little. He wrote majority decision in 2009, when Fox first blew through the Court and the FCC won. (As you will recall, the Court then sent the case back down on administrative law grounds without reach the thornier constitutional issues.) But that doesn’t say much: he was very clear that he was ruling on the non-constitutional issues only, and he never hinted at how he might come out on the First Amendment issue here. Some of his votes in other First Amendment cases suggest he might side with Fox here. Remember, Scalia was the swing vote (joining uber-liberal Justices Brennan and Marshall) in Texas v. Johnson, which accorded First Amendment protection to flag burning. He was also clearly with the majority in Stevens.

On the other side, he’s shown that he is willing to “vote morality”. In Barnes v. Glen Theater he concluded that the First Amendment did not prevent restriction of nude dancing.   He also dissented in U.S. v. Playboy Entertainment Group, Inc.  Ultimately, I’m hoping that he’ll vote to strike down the FCC’s indecency scheme because: (1) he justified the moral high ground in Barnes only after declaring nude dancing to be conduct, not expression; (2) he dissented in Playboy only after deciding that the content providers in that case were clearly providing – and intending to provide – hard core sexually-oriented material, not at all the case here; and (3) he was in the majority in Reno v. ACLU back in 1997 where regulation of supposedly “harmful” material on the Internet was declared unconstitutional, in part due to the vagueness of the law.

So maybe more than one of Scalia/Roberts/Kennedy drops off to join Alito in upholding the FCC’s indecency policy.  But I doubt it. And in any event, I clearly don’t think any more than those three join Alito in ruling for the FCC. 

Bottom line: Kevin’s Krystal Ball says that Fox wins in the Supremes.

Clouding the FCC’s choices is the fact that CBS’s appeal in the Janet Jackson case is currently pending in the U.S. Court of Appeals for the Third Circuit. Since that case also involves the indecency policy so thoroughly trashed by the Second Circuit in Fox, the Commission might be inclined to hold off until the Third Circuit shows its hand before making any decisions about the next appellate step through the indecency minefield. (The FCC has 90 days to file its cert petition – and that can be extended another 60 days under some circumstances – so the Commission may sit back and wait at least a little while for a Third Circuit decision to roll in.)

[Blogmeister’s Note: Kevin Goldberg, our crack Supreme Court observer and First Amendment guru, has advised that, according to Kevin’s Krystal Ball, the Second Circuit’s decision would be affirmed in the Supreme Court by at least 6-3, maybe even 7-2, if it were to get that far. Kevin has undertaken considerable analysis to back this up – let us know if you would like us to post that analysis – and he assures us that he is not relying on the soccer-predicting German octopus. Some reports, however, indicate that he has his own octopus powering the Krystal Ball (see illustration at right).]

Of course, the Commission could also just run up the white flag and forget about appealing any further. In that case, its indecency options would be reduced to two: (1) go back to the drawing board and attempt to develop an indecency enforcement policy that passes constitutional muster; or (2) accept the fact that indecency is not susceptible to government regulation.

In view of the zeal with which the FCC has been flexing its anti-indecency muscles in recent years, (2) seems an unlikely choice. That unlikelihood is underscored by Commissioner Copps’s statement concerning the Second Circuit decision. In that statement Copps expressed his hope that the FCC would appeal the case, and he called on the Commission to “move forward immediately to clarify and strengthen its indecency framework”. Hmm . . . we’re guessing that he would opt for choice (1). 

But so far Copps is the only Commissioner who has spoken up on this. Others might reasonably take the position that now would be a good time for the Commission to get out of the business of trying to regulate indecency. This is particularly so since the FCC could claim that such a retreat was strictly a reaction to the Second Circuit’s decision. That is, if any critics tried to beat up on the Commission for giving up too early, the Commissioners could simply respond that the Court made them do it.

While the FCC plans out its next move on the litigation front, what about all those indecency complaint proceedings which have been piling up at the Commission over the last several years?

The good news is that, in the aftermath of the Fox decision, it seems very unlikely that the FCC would attempt to take any enforcement action based on pending complaints. After all, the Second Circuit told the FCC in no uncertain terms that the Commission’s indecency policy is unconstitutional. With the Second Circuit’s order sitting there, the Commission seems to have no choice but to stand down unless/until that order is reversed. So don’t expect to see any more fines or forfeitures or notices of apparent liability or even letters of inquiry relating to allegations of indecency while the Second Circuit’s Fox decision is alive and kicking. 

And similarly, anyone who is already in the middle of an indecency inquiry – say, for example, every Fox affiliate who received the American Dad inquiry – is probably off the hook for responding to the FCC’s questions.  (The Commission could theoretically ask the Second Circuit to stay the effectiveness of its order. The odds that such a request might be granted fall comfortably in the “good luck with that” range.)

Ironically, the FCC’s likely inaction on pending complaints is bad news as well. Lack of FCC action would mean that all the stations whose license renewals have been held up for years solely because of pending indecency complaints would probably not see those renewals granted in the short term. That’s frustrating: once a court has determined that an agency is acting unconstitutionally, regulatees who have suffered and are continuing to suffer from such unconstitutional activity should logically be entitled to prompt relief. While it would be nice if the Commission were to do the right thing here, you probably shouldn’t count on that happening. Pending applications are likely to remain pending.

The Commission could clear up any uncertainty about all these things by issuing a public notice setting forth its plans. If that happens, we’ll let you know. In the meantime it would probably be advisable not to hold your breath.

Acknowledging that the Supreme Court (in the 1978 Pacifica case) had clearly held that the Constitution permits some regulation of indecency, the Second Circuit observes that the media landscape has changed dramatically in the 30 years since Pacifica. The overwhelming penetration level of cable and satellite services and the development of an “omnipresent” Internet offering all sorts of video programming starkly contrast with the state of affairs in 1978, when broadcast media occupied a “uniquely pervasive presence in the lives of all Americans”. The Circuit also notes the technological controls now available to help parents police content in their own homes.

But even within the confines of Pacifica, the Second Circuit concludes that the FCC’s policy on indecent broadcasts exceeds Constitutional limits because the policy is impermissibly vague. 

Significantly, the Circuit’s ruling targets the FCC’s entire indecency standard – not just the “fleeting expletives” component that was the focus of its 2007 opinion. 

In a tour de force of First Amendment analysis, the Second Circuit takes apart virtually every element of the FCC’s policy and the FCC’s defense of that policy. The Circuit finds that the standard itself is so vague that neither the broadcast industry nor the FCC itself could ever be certain which words or images qualify as “patently offensive” under the existing standard. The Court also observes that the FCC’s presumptive prohibition against the words “shit” and “fuck” can’t survive because the FCC can’t justify why some uses of those words have been prohibited and some not.

For example, how could the FCC permit the broadcast of repeated uses of certain “bad” words by fictional soldiers in Saving Private Ryan, but proscribe the use of those same words by real life musicians in a documentary about the blues? The Commission has on occasion attempted to explain its actions on the basis of such factors as whether the words are “integral” to a particular program or whether the program is a “bona fide news interview”. But in the Circuit’s view, “[t]here is little rhyme or reason to these decisions”.

The Second Circuit describes the enormous First Amendment harms that naturally flow from “the FCC’s indiscernible standards”. The Court notes the inherent risk that vague standards applied on an “ad hoc” basis by government officials allows for the suppression of particular points of view: “it is hard not to speculate that the FCC was simply more comfortable with the themes in ‘Saving Private Ryan,’ a mainstream movie with a familiar cultural milieu, than it was with ‘The Blues,’ which largely profiled an outsider genre of musical experience.” 

The Circuit also recognizes that the FCC’s vague standards force broadcasters to choose between (a) censoring controversial programs and (b) risking massive fines or loss of licenses – the unsurprising result being that many broadcasters choose to self-censor. According to the Court, concern about possible FCC enforcement efforts has prompted stations to edit or refuse to air a wide range of programming, including a documentary on the September 11th World Trade Center attack, literary readings, live news programs, political debates, sitcoms and dramatic programs. 

And with that, the Second Circuit has struck down the FCC’s indecency policy. While the Court acknowledges that, unless and until Pacifica is overruled, the FCC could conceivably create a constitutional policy, the agency’s current policy does not pass Constitutional muster.

The Second Circuit’s decision represents an unambiguous defeat of the FCC’s current indecency policy – but it’s not likely the last word on the subject. The FCC will almost certainly appeal to the Supreme Court. And let’s not forget that the Third Circuit still has the Janet Jackson Super Bowl case pending – raising the possibility of conflicting decisions between the two federal courts. Such a “circuit split” would virtually guarantee a Supreme Court review. 

The prospect of Supreme Court review focusing on the constitutionality of indecency regulation is particularly exciting because, in his separate opinion in the Supreme Court’s 2009 Fox decision, Justice Thomas specifically invited reconsideration not only of Pacifica, but also of Red Lion. Red Lion is the 1969 Supreme Court decision upholding the Fairness Doctrine (and, by implication, special regulatory treatment for broadcasting) because of the supposed “scarcity” of broadcast spectrum. Thomas referred in particular to the “questionable viability” of both Red Lion and Pacifica. If four of his colleagues were to agree with Thomas that the scarcity rationale is no longer valid, that could cause massive upheaval in virtually every aspect of the FCC’s operation. 

In the meantime, broadcasters should not take the decision as a green light to start airing “R” rated movies at mid-day. The Second Circuit struck down the FCC’s policy interpreting the federal statute prohibiting “obscene, indecent or profane language” but not the statute itself. In other words, it’s still technically illegal to broadcast such fare, even if there is no obvious way in which the government could penalize it in the wake of the Second Circuit’s decision. As has always been the case, broadcasters will need to continue to exercise good judgment in their selection of programming. We, as always, will stay tuned.

When the Second Circuit gave the FCC the big thumbs down in 2007, its opinion was not limited to the relatively narrow non-constitutional law question on which the case was ultimately decided. Rather, the court took the somewhat unorthodox step of offering a detailed analysis of the constitutionality of the FCC’s indecency policy, an analysis which brutally ripped that policy apart. The constitutional analysis was what lawyers refer to as “dicta” – meaning that it technically wasn’t an essential aspect of the court’s holding, and so had no precedential impact. Still, that analysis clearly telegraphed what the Second Circuit thought of the FCC’s policy, constitutionally speaking.

So when the Supremes sent the case back to the Second Circuit (the logical expectation being that the parties would re-address the constitutional issue), the likely outcome of that second visit to the Second Circuit was anticipated to be a foregone conclusion. 

And after the January 13 oral argument, it’s looking like that foregone conclusion is a pretty good bet: many observers expect that the Second Circuit will hold the “fleeting expletives” to be unconstitutional.  (You don't have to trust us on this one -- the oral argument is available on-line for your viewing enjoyment.) 

The issue most troubling to the Second Circuit this time around appeared to be the FCC’s failure to provide a coherent and specific standard as to when something was indecent. One judge characterized the Commission’s indecency decisions since the Supreme Court’s 1978 Pacifica decision as a matter of “bewildering vagueness”. The Second Circuit panel peppered FCC counsel with hypothetical programs they worried might be found indecent under the current regime. For instance, Judge Leval (the source of the “bewildering vagueness” characterization) asked whether a production of Hamlet might be found indecent, and Judge Hall queried whether a news report on Wednesday’s oral arguments would be allowed to include the original uncensored clips from the 2002 and 2003 broadcasts.  

The FCC’s counsel suggested in response that both of those examples would probably not be found held indecent, noting that the Commission “bends over backwards” to protect news programs and editorial decisions. The Court, reflecting apparent skepticism, asked pointedly whether the First Amendment allows it to rely on an agency’s promise to “bend over backwards.”  

Counsel for Fox (and NBC and CBS, who participated as intervenors), as well as the judges, also expressed some concern over the impact of the FCC’s enforcement policy on smaller local broadcasters. The limited resources of small broadcasters, the argument went, might prevent them from implementing a delay system – and, without that safety net, the threat of enhanced penalties could lead them to self-censor their broadcasts, and particularly their news coverage. The court seemed unconvinced (as Justice Scalia seemed to suggest in his opinion) that this concern might be alleviated because folks living in smaller towns were less likely (at least according to Scalia) than “foul-mouthed glitteratae from Hollywood” to use such expletives. 

The Court and FCC counsel also parted ways on whether the Supreme Court’s decision in Pacifica governs the current case. The FCC clung to that decision, claiming that Pacifica’s approval of indecency regulation, combined with the FCC’s (supposed) guidance since then about what is and is not indecent, foreclosed the argument that the current regime was unconstitutionally vague. The Second Circuit strongly disagreed, with Judge Leval at one point telling the FCC to “stop telling us Pacifica ruled on this – it didn’t,” and advising Commission counsel that if he didn’t think the Pacifica decision was extremely narrow, he needed to read it again. Judge Leval explained that whereas Pacifica narrowly approved of the regulation of a specific list of “seven dirty words”, it had not addressed the “great miasma” of things now regulated in the “broadness of the Commission’s menace.” 

When the discussion turned to the supposed purposes of the indecency policy, things didn’t get better for the agency.  The Commission claimed that the main purpose of the policy was to protect children from hearing expletives, to which Judge Hall asked in response how that purpose was served by the “exception” for news programming, questioning whether children could tell the difference in the use of expletives in different types of programming. The Court also queried FCC counsel about why use of the V-Chip was not a better, less-restrictive solution to enable parents to protect their children from broadcast expletives. Judge Leval asked whether, if technology exists that could allow parents to filter programming for their children, parents with the lowest tolerance for questionable language – those who may not let their children outside due to fear they might “hear a nasty” – should be allowed to dictate what other viewers and listeners should hear.  

While the Second Circuit’s decision probably won’t be issued for a couple of months, there is little doubt that it will find the FCC’s current indecency regime, at least as it applies to “fleeting expletives”, unconstitutional.   Of course, that is not likely to be the end of things. The next decision out of the Second Circuit is almost certain to be appealed to the Supreme Court, which will have the opportunity to address the constitutional issues it declined to address the last time.  

Meanwhile, moving along on a parallel track is CBS’s appeal of the FCC’s decision fining it for broadcast of Janet Jackson’s infamous “wardrobe malfunction” in 2004. As we all know, the Third Circuit initially found that fine to be arbitrary and capricious, but was asked by the Supreme Court to rethink that decision in light of the remand of the Second Circuit’s original decision.  Oral arguments in the Third Circuit are scheduled for February 23, which could mean a new Third Circuit decision sometime in the late spring or summer.   It is possible that both Courts’ decisions could be consolidated in a single Supreme Court case, probably in the 2010-2011 term.

The decision was issued in a case pitting a number of record companies (think BMG, Arista, Bad Boy, Zomba) against the popular LAUNCHcast service. The record companies claimed LAUNCHcast was interactive. The court disagreed. 

The Copyright Act defines an interactive service as one which “enables a member of the public to receive a transmission of a program specifically created for the recipient, or on request, a transmission of a particular sound recording . . . , which is selected by or on behalf of the recipient.”  The parties agreed that LAUNCHcast, in some form, generated a list of songs to be performed based on the initial song or artist choice by the listener.  But was that enough to make it “interactive”? Nope.

The Court engaged in a searching review of the factors leading to the creation of the interactivity/non-interactivity distinction in the Digital Performance Right in Sound Recordings Act of 1995 and its refinement in the 1998 Digital Millennium Copyright Act – two seminal laws intended to protect sound recording copyright holders. The competing goals of the law are: (1) to increase the number of distribution channels for music and (2) to discourage rampant copying of music without compensation to the copyright holder.

The Court concluded that a major consideration – perhaps the major consideration – is the ability of a digital listener to capture and save a high quality copy of a sound recording with little to no effort if he or she knows it is about to be played. That is, if a listener can manipulate the webcast service in a way which permits him/her to snag his/her own digital copy of a song of his/her choosing, then it’s likely an “interactive” service. Stated another way, the Court focused on whether the webcasting service offers listeners an opportunity to steal music they would otherwise purchase.

Analytically, the Court reviewed factors which the Copyright Office had deemed relevant over the years. Although asked to clarify the “interactive/non-interactive” distinction, the Copyright Office has declined to take the bait, explaining that technology changes too rapidly to allow for a hard and fast rule. But it did indicate that some level of listener influence is permitted within the definition of non-interactive. In particular, the Copyright Office had even indicated that LAUNCHcast itself would qualify as “non-interactive”.

How exactly does LAUNCHcast work? The short strokes are that users:  

• Must log in with a unique username/password;
• Must enter basic information about preferences unrelated to music;
• Must enter information regarding the user's favorite artists;
• Must identify the user's favorite musical genres and rating them in order of preference; and
• Are able to rate songs or artists they hear (or even instantly purchase a song they like).

That final step (i.e., the rating process) continually refines and changes the individual stream offered to the individual listener.  Based on all these preferences and refinements, the LAUNCHcast software creates a playlist of 50 songs every time the listener logs on. The listener has no idea what those songs will be or which artists will be featured.

There is actually much more to the software, involving ratios, quotients and other mathematical formulas that aid in the refinement and ordering of the playlists. The Court of Appeals spent a good ten pages describing the process in impressive detail. Though we’re glossing over the particulars, we’ll note that it is this very level of detail which led the Court to conclude that LAUNCHcast is not an interactive service.  As the Court saw it, the LAUNCHcast system does not allow a user either to pick a song and then immediately hear that song, or to predict whether (much less when) any particular song may be played, and or (most definitely) to engage in music piracy. (Indeed, the instant-purchase function probably promotes the legal purchase of copyrighted music).

While LAUNCHcast may be more complex than some other few music services, the Court’s discussion does highlight some key characteristics which webcasters can take note of in determining whether their services may be deemed interactive: 

• In defining “interactive”, Congress “intended to include bodies of pre-packaged material, such as groups of songs or playlists specifically created for the user”;
• About 60 percent of the various factors used in the LAUNCHcast programming to create and modify a user’s playlist are out of the listener’s control (the only absolutely certain control available to a user is the “zero” rating: by giving a song a “zero” rating, the user guarantees that he or she will not hear it again);
• A new playlist of 50 songs is created every time the listener logs in, which prevents any ability to predict what will be heard during any particular session.

Emphasizing the limited involvement of the listener in the LAUNCHcast song selection process, the Court contrasted listening to LAUNCHcast to listening to radio back in the halcyon days. According to the Court, LAUNCHcast listeners do not enjoy even the “limited predictability that once graced the AM airwaves on weekends in America when ‘special requests’ graced lovestruck adolescents’ attempts to communicate their feelings to ‘that special friend’”. Ah yes, the good old days. But the Court’s comparison prompts this reminder to broadcasters who stream their over-the-air programming: be careful about inviting “special requests” from listeners, since granting such requests could lead the webcasting element of your operation to be deemed “interactive”, with all that that entails.