European Commission 1996-05-30 Attn. Dr. Mario Monti 200 rue de la Loi B-1049 Brussels Belgium CC: Directorate General for the Internal Market and Financial Services, the Media, Commercial Communication and Unfair Competition Dear Dr. Monti, This is a feedback on the topics brought forward in the Green Paper on the "Legal protection for encrypted services in the internal market". The following text refers only to TV services broadcast via satellites or via a terrestrial network of repeaters (this latter case appears to be referred to in the Green Paper as services broadcast via "Hertzian waves", committing a serious technical flaw, since satellite programmes are carried by the very same Hertzian waves) There is a fundamental distinction between such services and those provided via a cable distribution system, because in the latter case the user has to subscribe a service contract and is therefore bound by the terms of such contract (thus the user must not attempt decryption if this is forbidden by the contract). We believe that this is a relevant topic, because it involves issues of basic individual freedom in the first place. Laws like those existing in some of the member states or in the United States, forbidding private decryption of broadcast encrypted TV services represent an unreasonable limitation of personal freedom, because they pose limits on the free processing of information that reaches, unsolicited, people's properties (it is important to notice that these people have subscribed no contract with the service provider and have, therefore, no obligation). To make this point clear, the following comparison may be useful. Suppose that somebody starts bulk mailing an encrypted newspaper and then charging a fee for the decryption key: we believe that it would be perfectly fair for any recipient of such newspaper to attempt any procedure he/she might devise to decrypt its contents. He/she has subscribed no contract or obligation with the publisher, who has chosen this peculiar approach to distribution of his/her product because of specific advantages, such as a lot of free publicity and, in certain cases, possible lower postal rates. Another example could be that of wall newspapers written in a new, artificial, language that is taught in special schools for a fee: any law forbidding the passer-by from attempting his/her own translation would be a serious violation of individual freedom. Laws affecting individual freedom and regulating actions that do not have a direct impact on others should exist only when serious issues of public safety or of satisfaction of basic needs may be at stake. A simple example is that about detention of weapons: a law restricting their possession makes sense even if it is a limitation of individual freedom, because the existence of such weapons can represent a danger for public safety. In the case of encrypted television there is absolutely no issue either of public safety or of fundamental needs to be satisfied: TV programmes are certainly not needed for survival or even for welfare. If broadcast (here and in the following "broadcast" is used as opposed to "cable") pay television is not viable without laws restricting basic individual freedom, it is better not to have it. Proponents of anti-decryption laws insist that decrypting TV programmes is equivalent to stealing. This is an incorrect and potentially dangerous assertion. If somebody chooses to distribute their programmes through a broadcast system, everybody is entitled to do whatever he/she wants with the information received, as long as it is for private purposes. Otherwise, we should say that somebody listening to the performance of a street juggler without paying is "stealing" something from the juggler. The street juggler performs on the streets at no or low cost for him/her and takes the risk of not being paid; if he/she wanted to be sure of payment, he/she should rent a theatre and charge an admission fee. Correspondingly, the TV station that uses a satellite transponder saves a lot of money with respect to that using a cable distribution system. In this latter case the TV station could easily make sure to get payment from each viewer because anybody wanting to watch its programmes should sign a service contract to access the private transmission medium represented by the cable. Somebody could object that the performance of the juggler is not "encrypted", but we must not be mislead by this: what matters to qualify us as users of the service is our action of stopping by and looking at the juggler, which, in the case of a TV station, corresponds to tuning our receiver on the appropriate frequency and aiming our antenna at the appropriate transmitter. Encryption is added on top of this just because of practical reasons: otherwise nobody would pay. If reception of an encrypted broadcast programme without a subscription were to be considered illicit, then reception of a programme that is unencrypted, but for which the broadcaster asks for a subscription fee, should be illicit as well. The fact that I may leave the door of my house open does not change the fact that stealing what is inside is illicit. Only the manufacture and sale of unauthorized decoding equipment could be considered as unfair competition and therefore forbidden, but only on this basis. Encryption is just a technological trick, but we must not be misdirected by the complexity of the trick. In other words, a TV station could choose to broadcast images upside-down and then sell special TV sets that show them upright. Forbidding independent decryption would mean to forbid people to turn their own TV sets upside-down! In addition, we think that some of the conclusions reached by the Green Paper are debatable, such as that encrypted services would certainly be an advantage for the general public. Besides the fact that they have led to dangerous, anti-libertarian laws being passed in some member states, they can determine an effective reduction of the offer of TV programmes available to the general public. Since the cost of rights for sporting events or for movies is not strongly related to the production costs, but, rather, is dependent on the market situation, it will happen that more and more sporting events, movies, TV series that are currently shown on public television or on unencrypted commercial channels will be acquired by encrypted TV stations, which will be able to pay the inflated costs determined by the increased competition. Thus, those who cannot or do not want to subscribe to pay-tv stations will observe a significant decrease in the offer of tv programmes available to them. Furthermore, even if subscriptions for each channel were available in all member states, almost nobody would be able to afford paying for all of them, and therefore the possibility of cultural integration offered by satellite television would be strongly reduced, if not canceled altogether (in the hypothetic pessimistic scenario of encrypted services taking over all the available transponders). From this point of view, to prevent saturation of available resources, the possibility of banning encrypted services from terrestrial channels should be considered, since they are in much shorter supply than satellite transponders. The view that pay-tv services should be forced by law to sell subscriptions everywhere in the Union is held by many people. We do not agree with such view, because we believe that every broadcaster should be allowed to choose the area he/she wants to provide service to, even if it is just a single town. Clearly, usage of satellite transponders to serve only a single member state or a group of member states is a waste of bandwidth, because most transponders have continental coverage. This last issue and that about the reduction of the effective TV offer (defined as the average number of TV channels actually available per person) could be addressed limiting by law the number of licences for encrypted services. Going back to the main theme of the Green Paper, our recommendation would be that of absolutely avoiding any ban whatsoever on private decryption of encrypted TV services and possession of any decryption equipment. Everybody's right to process the information he/she receives should be granted. The freedom of information exchange about decryption systems (hardware and software) via the press, the Internet and any other means of communication should also be granted in full. The only limitation that would not violate basic individual rights, if the legislators are really convinced that such limitation is needed and fair, is the one on the commercial distribution of decryption devices different from those provided by the operators of the encrypted channels. In any case, such limitation should not be imposed in those areas where official subscriptions are not available, because, even though the right of the broadcasters to deny subscriptions outside the area they deem appropriate should be granted, preventing reception outside such area should be only their responsibility and no provision should come from the law. This is in sharp contrast with the contents in Chapter 4 of the Green Paper, that we find largely unacceptable. We are at a point when important decision have to be made, and we have to choose between creating the conditions for the feasibility of new business operations by curtailing individual freedom or to defend people's basic rights. We must not forget the meaning and origin of legislation in general: the law is a tacitly accepted social contract that makes the existence of society possible. Since it is tacitly approved, it must be kept minimal, whenever it deeply affects individual rights. We would prefer a Europe without a single television channel to a Europe with thousands of television channels but with a single law limiting what people can do, in the privacy of their homes, with the information they receive. Replies to the questions listed in the Green Paper follow: Q1) We do not have anything in particular to say concerning regional situations. Q2) We have nothing to say about restrictive effects other than those mentioned, on which we have already expressed our opinion in the preceding text. Q3) Yes, harmonization at the Community Level would be useful, in order to contribute towards the abolition of unreasonable national laws, such as those forbidding private decryption. Q4) As outlined in the previous text, we believe that the options presented in the Green Paper are unreasonable for the most part. They are fully in favour of TV operators and do not take into any consideration issues of basic individual freedom. Q5) i) a) As we have explained, there is a fundamental difference between cable services and services broadcast via electromagnetic waves (both via satellites and terrestrial repeaters). Cable services represent a different issue altogether, because they use a private medium to which the user is granted access only on the basis of a service contract. Any unauthorized decoding would be in violation of this contract and therefore illicit. Services provided via electromagnetic waves, instead, are broadcast to everybody, also to those who do not have a service contract and do not want to have one; thus anybody should have the right to perform any processing of the information that he/she receives, unsolicited. Encrypted services other than those we have just mentioned, such as those used to protect payment information or other private data, represent a completely different matter, because they generally use private media and, most importantly, involve an active interaction between the user and the service provider. For these reasons, they should be dealt with in a completely different manner and be regulated by a completely different legislation. b) Again, systems using passwords involve active interaction of the user on the system; therefore the issue is totally different and confusing it with that of encrypted broadcast television is improper and potentially dangerous. ii) As explained in the text, any ban on private possession of decoding devices for broadcast television is in violation of basic individual rights and should therefore be avoided. Action should be taken to ensure that national laws including such ban are modified. iii) Claims for damages should not be included, since there is no sensible way of evaluating the damage suffered by an encrypted TV station because of the sale of unauthorized decoding equipment: it is impossible to establish how many of those who have purchased the unauthorized equipment would have purchased regular subscriptions, due to the difference in costs. Yours Sincerely, Massimo Macucci Corso Matteotti, 150/A I-51016 Montecatini Terme macucci@pluto.iet.unipi.it Adriana Maggiore, Via Umbria, 7 I-56124 Pisa adriana@iet.unipi.it Romano Giannetti Via Sarzana, 146 I-19126 La Spezia romano@iet.unipi.it Massimiliano Marinuzzi Ronconi Via S. Giorgio, 98 I-55100 Lucca Enrico Bozzoni Via Baracca, 12 I-56123 Pisa bozzoni@iet.unipi.it Marco de Marinis Via Verdi, 9 Navacchio (Pisa) mdm@iet.unipi.it Alessio Bechini Via De Nicola, 14 I-51015 Monsummano Terme Stefano Di Pascoli Via Dei Mille, 28 I-56126 Pisa dipas@pimac2.iet.unipi.it Roberto Giorgi Via dei Mille, 28 I-56126 Pisa giorgi@iet.unipi.it Giuseppe Iannaccone Via delle Grazie, 18 Livorno ianna@iet.unipi.it Mauro Cerchiai via Squarciabocconi, 31 I-51012 Pescia df101437@ipifidpt.difi.unipi.it Tim Hanlon thanlon@sunra1.cern.ch 41 Rue de Geneve F-01210 Ferney Voltaire Graham Dresch England Tony Henshall United Kingdom tony.confidence@zetnet.co.uk Alberto Nogaro Via Fiordaliso, 11 I-20095 Cusano Milanino a.nogaro@iol.it Giovanni Marola Via Casale di Valle, 14 I-56010 Asciano marola@iet.unipi.it Renzo Grassi Via U. Bassi 31/A I-51016 Montecatini Terme Giovanni Pennelli Via Pesciatina, 200 I-55010 Lunata pennelli@iet.unipi.it Lorenzo Vicisano Via A. Pisano, 7 I-56100 Pisa vicisano@iet.unipi.it