August 15, 2003 Gary Blankenship Senior Editor Regular News Communications bill worries business lawyers Communications bill worries business lawyers Senior EditorCan your Internet service provider tell you what brand of modem to use to receive its signal? Can it mandate you pay a separate fee for each home or office computer that receives its service, instead of using a router to share one line between many computers?Can the state delegate to cable, Internet, and other telecommunications providers the power to decide what is an “illegal” device attached to a home computer or cable signal receiver?Those questions, among others, have been raised by members of the Bar’s Business Law Section in the wake of the passage and signing by the governor of HB 79, on communications services.Nominally a bill to prevent piracy of movies and electronic media, the business lawyers have been warning it might be vague and overbroad, leading to unintended consequences. A bill supporter, though, said only people who knowingly try to pirate electronic signals or copyrighted material have anything to worry about.“There is a great deal of confusion. The bill is quite broad in scope and broadly worded,” said section member Andy Greenberg. “The concern here is they are actually regulating the technology by which the content is distributed.”Charlie Dudley, general counsel for the Florida Cable Communications Association, doesn’t see the problem. “It [the law] says that devices that are illegal under the statute are devices that do not have other legitimate purposes; they are specifically designed for illegal uses,” he said.The bill started out as a measure to fight piracy of cable TV signals, but quickly expanded to cover the gamut of telecommunications, except telephone service.According to a House staff analysis of HB 79, the bill widened both the civil and criminal penalties in F.S. §812.15 and expanded coverage from cable services to “many new technologies that communication service providers, except telephone, are now offering to the public.” In one example, the penalty for illegally receiving or intercepting a signal or helping someone else to do so was increased from a first degree misdemeanor to a third degree felony.The bill also specifically allows providers to bring civil actions for damages, including the value of services that were intercepted or that were intercepted by others with devices provided by the defendant.The bill also makes it easier for companies to recover statutory or actual damages, and allows a court to impose statutory damages of up to $50,000 for each illegal device.Critics say the penalties give the companies a sledgehammer to attack a gnat, especially in the cases of individuals who have done nothing but acquire a cable descrambler or similar device.Tim Morell, a member of the section’s Computer Law Committee, noted that DirecTV recently shut down a Web site that sold descrambler boxes that allowed buyers to decode the DirecTV signal without paying the company. DirecTV got records of the buyers and sent them letters, threatening to sue in federal court where the penalty would be $10,000 per device plus attorneys’ fees unless the buyers paid the company $3,500 and turned over their devices.“You’re presumed guilty and you get none of the protections you would get in criminal court,” Morell said. “It’s huge overkill.”He said while some and perhaps most of the buyers knew the devices were illegal, the sellers do not usually disclose that or tell buyers what the penalties might be if they are caught. And “there are some groups of people out there who have legitimate defenses,” Morell said. “They [DirecTV] have to know there are some people who have legitimate defenses, but they can’t win. They can’t get a defense because they can’t afford to hire an attorney for this to go to federal court.”Ironically, the people most likely to have bought the devices, he said, are those who can’t afford monthly cable or satellite service, and hence face bankruptcy over a large fine. Perhaps even more paradoxical, Morell noted, is state legislatures and Congress have considered tort reform bills to limit damages that harmed individuals can win from companies but at the same time have passed laws increasing the damages that companies can win from individuals.“I understand the industry’s point and I think they have a good point, but I think this is huge overkill,” he said. “It’s unfair to be grinding people into the ground.”Other section members are concerned that HB 79 is not specific enough and consumers with perfectly legal devices could find themselves charged with having pirating or intercepting devices — especially since the bill may leave the definition of what is or isn’t legal up to the companies.The House staff analysis noted that the Florida Supreme Court has held that the state constitution’s separation of powers language prevents one branch of government for delegating its authority to another branch of government. That could arguably be extended that the legislature could not delegate its powers to another entity, such as a private business.The analysis said that one provision in the bill prohibits connecting devices “unless specifically authorized to do so by a cable provider or other communication service provider.” The analysis noted that this “appears to delegate to private parties the authority to determine what acts do or do not constitute a crime; especially combined with the criminal rule of lenity, this may be an unconstitutional delegation of legislative power.”It also said the bill may proactively attempt to incorporate any future federal legislature, which is also proscribed constitutionally.Greenberg said some vocal opponents of the bill have charged that the bill would allow an Internet provider to dictate what accessories and equipment a customer adds to a computer, such as a router or a CD rewrite drive. He’s not sure that harsh criticism is justified, but he’s also not sure that those critics might not be right, mostly because definitions in the bill are broad.“You can only connect to it a communications device that you’ve received consent to use,” Greenberg said. “It will be the subject of substantial litigation.”In a sense, the bill reflects an argument that goes back to player piano rolls, where intellectual property owners seek to protect their investment by controlling technology that might be used to pirate or duplicate it illegally, he said. A defining case involved the entertainment industry’s attempt to prevent Sony from selling its first video cassette records in this country, arguing that the machines would be used to duplicate copyrighted material.The U.S. Supreme Court rejected that claim, saying there were legal and legitimate uses for the technology.Dudley, of the cable association, disputed there are any serious problems with the law. The delegation issue came from the previous law and has caused no problems, he said.As for being too broad or vague, he said the law is clear that prohibited devices are only those designed for illegal use.Aside from his group, the law was supported by the Motion Picture Association of America, the recording industry, and an Internet service providers group. Dudley said a model law like Florida’s has been pushed by those groups in other states. Greenberg said some states have passed the law with few changes while others have delayed it when questions arose.Although some Business Law Section members worried about the criminal provisions of the law, Dudley said it was unlikely that state attorneys would devote significant — if any — resources to cable or cyber piracy, especially involving individual consumers where proving criminal intent could be difficult.He also questioned if the law could be read to give Internet service providers control over what equipment customers could attach to their computers. Even if it did, “We don’t have a design to take this statute and make this illegal,” Dudley said. “Customers would go to another provider.”“What you’re at right now is these [descramblers and similar equipment] are products that are being sold to people. If it’s against the law, it’s against the law,” Dudley said.The purpose of the bill was to set the groundwork for new technology, such as Web-based pay-per-view, while protecting intellectual property, he said.Dudley also questioned why none of the objections was raised in the six legislative committee hearings or when either the House or Senate took up the bills. The measure was passed unanimously in every committee as well as both chambers.Business Law Section member Joel Rothman, who raised the issue at the section’s recent executive council meeting, said no one realized what was in the bill until it was nearly through the legislative process and it was too late to mount any serious effort. “It became a topic of discussion on the computer law community listserv back in April and May,” he said.HB 79 becomes effective October 1.
GBP, the €50m industry-wide pension fund for the wholesale flowers and plants sector in the Netherlands, has said it wants to liquidate itself and is urgently seeking an alternative solution for the pensions provision for its 6,500 participants.Gerard Roest, employees chairman, told IPE: “We are too small to continue independently. Our administration costs of €285 are too high and still rising.”An additional problem is that the €424bn asset manager APG unilaterally cancelled its contract at the end of 2014, as it considered GBP too small, according to Roest.As a consequence, GBP has temporarily placed its assets with a money market fund at NN Investment Partners, “where it is risk-free, indeed, but hardly generates a return either,” the chairman said. He said the pension fund and social partners were looking at the options, including joining an insurer or the new pensions vehicle PPI.But he said the pension fund preferred joining a larger industry-wide scheme.So far, negotiations with other schemes have failed to produce a result, mainly because they assessed the risk of taking in GBP as too high, according to the chairman.“As we are a non-mandatory scheme,” he said, “we can’t guarantee that all our affiliated employers will join a new pension fund.”GBP, established in 2007, has an individual defined contribution plan and a contribution of approximately 14% of the pensionable salary.“As we don’t have much financial margin to increase our premium, joining another industry-wide scheme with a more expensive pension plan is difficult,” Roest said.However, GBP is financially in good shape.According to the chairman, the official policy funding stood at 123%, and the pension fund had been able to grant indexation every year so far.