Donate to EFF

June 16, 2003

Governor Jeb Bush
The Capitol
Tallahassee, FL 32399

Dear Governor Bush:

I write on behalf of Philips Electronics Corp. to urge you to veto HB 79, which will soon be sent to your desk. Although the bill is presented as a simple updating of cable "theft of service" law, it is nothing of the sort. Rather, it is an overreaching bill that would create an exceptionally broad regime of criminal and potentially enormous civil liability aimed at today's technology, the technology of tomorrow, and consumers who use technology.

Philips Electronics is one of the world's biggest electronics companies, with sales over $30 billion in 2002. In the United States, our 25,000 employees (including nearly 100 at our payroll center in Palm Beach Gardens, Florida) are responsible for nearly one-third of our annual sales and revenue. Philips is a global leader in lighting, electric shavers, medical diagnostic imaging and patient monitoring, and one-chip TV products, and is a leading innovator and manufacturer of consumer electronics technology products sold in the U.S. We are working hard to develop new products, such as digital personal video recorders, with exciting new features that will enhance consumer experience with digital content. HB 79 would essentially place control over right of our customers to use our products in the hands of a broadly defined class of "communications service providers." That, in turn, will cast doubt on the viability of products we have only begun to imagine and will limit consumer choice in your state.

We understand that the proponents of the bill claim that there are gaps in existing law. We have urged them to identify those gaps specifically, so that a carefully crafted response can be developed. The bill is not such a response. It is bad policy. Specifically:

• The bill suffers from a basic conceptual flaw. The prohibited acts are so broad that they cover literally all conduct (e.g., receipt, acquisition, transmission) performed by a consumer, service provider or device manufacturer in connection with communications services or the content and information provided over communications services. Absent "express authorization" of the "service provider," all that stands between every citizen and enormous liability are certain specific exceptions and an undefined concept of "intent to defraud." This places enormous power in the hands of the service provider to define what is "authorized" and what is "theft." In essence, the bill prohibits naked "intent to defraud."
• The bill's definition of communications service is overly broad. It includes not only every communications service, but also the content, information and data that are provided by a service. The term also extends to the Internet. Thus, any information provided on a web site or over a communications system is, itself, a "communications service."
• Because it targets all conduct not expressly authorized, the bill does not focus on "theft." Indeed, authorization for many common activities is rarely "express." As a result:
  • The bill treads on the rights of consumers to act after they have lawfully received content by prohibiting transmission, retransmission and assisting others to receive, among other things. This invades the province of copyright law and allows content providers to dictate the uses of content and consumer electronics devices. For example, the "fair use" transmission of a clip of news or other information to a family member, if not expressly authorized, could lead to liability.
  • The bill would interfere with the right of consumers to attach devices (and software) to their personal home network. If the service provider's contract prohibits a personal video recorder, such as a TiVo, receipt of the service on such a device would not be with "express authorization," and would subject the individual to huge statutory damages and possibly criminal prosecution.
  • The bill threatens everyday commerce on the Internet. Content on generally accessible websites has been considered to be freely accessible. Now, a simple statement telling surfers to "Don't Go There" will subject individuals to potentially huge liability if they nevertheless visit a site.
  • The bill turns violations of terms of service agreements into statutory torts and crimes. If the service provider says an act is not within the scope of the fee paid for service, or will be allowed only upon payment of an additional fee, the service is not received with "express authorization."
  • The bill artificially focuses liability on the use of "devices" with no apparent reason. The requirement of a device adds nothing to the prohibited act, as all of the identified acts require some form of device. Thus, the bill inappropriately causes consumers to accuse devices and device providers when they are targeted for liability.
• The scienter standard provides insufficient comfort. Most conduct is done "knowingly." "Intent to defraud" is undefined and may be proven by the circumstances surrounding the conduct. When knowing conduct is done without express authorization it may well be deemed to be done with the "intent to defraud." Florida allows proof of this intent entirely by presumption or circumstantial evidence. A definition of intent to defraud, involving artifice, should be included.
• Paragraph 4 concerning the mere possession of devices does not even have an intent to defraud standard. Thus, it creates enormous risks for device manufacturers and retailers. The limitation with respect to the "primary usefulness" of the device provides limited protection given the breadth of the potential violations. For example, a device designed to connect to the Internet is intended primarily to receive content from websites. Most websites do not provide "express authorization" for viewing or even downloading content. Similarly unbounded liability is created by paragraph 5.
• The exception for multi-purpose devices provides some protection for manufacturers, but it does not protect any of the users of our devices. Further, given the breadth of the prohibitions, the protection even for manufacturers may prove illusory.
• The prohibition on circumvention in paragraph 2 overlaps and greatly expands the scope of already controversial Federal anti-circumvention law.
• The bill includes Draconian sanctions for the every-day conduct described above. Fines accrue "each day" and "for each device." Further, each component of a device is, itself, a device. Attorneys' fees are available for a prevailing plaintiff but not for a prevailing defendant, further encouraging questionable claims.
• The definition of actual damages is similarly over-broad and unrelated to any injury actually caused. Attempts to prove the retail value of services "illegally available" to a person with a device will be rife with speculation. Statutory damages should not accrue for each device, and enhancements for "each day" and "each device" are even more unreasonable.
• The over-broad definitions, damage presumptions and huge potential damage liability will ensure that the civil cause of action will be abused and stretched as far as words or resources permit. This will clog Florida courts and interfere with legitimate businesses.

Sincerely,

Thomas B. Patton
Vice President, Government Relations