Order Code RS22489
August 4, 2006
CRS Report for Congress
Received through the CRS Web
Copyright Protection of Digital Audio Radio
Broadcasts: The “Audio Flag”
Jared Huber
Law Clerk
American Law Division
Brian T. Yeh
Legislative Attorney
American Law Division
Summary
Several bills introduced in the 109th Congress would grant the Federal
Communications Commission (FCC) authority to promulgate regulations to protect the
content of digital audio radio broadcasts and transmissions from unauthorized
reproduction and distribution. Such regulation may require audio devices capable of
receiving digital over-the-air radio programming or satellite audio broadcasts to
incorporate an “audio flag.” The audio flag is a technical measure that “flags” digital
audio radio transmissions with a copyright protection signal, permitting only authorized
devices to play back copyrighted audio transmissions or allowing only limited copying
and retention of the content. The parties most likely affected by any audio flag regime
(including music copyright owners, digital radio broadcasters, stereo equipment
manufacturers, and consumers) are divided as to the anticipated degree and scope of the
impact that a government-mandated copyright protection scheme would have on the
“fair use” rights of consumers to engage in private, noncommercial home recording.
Critics of the audio flag proposal are concerned about its effect on technological
innovation. However, proponents of the audio flag feel that such digital rights
management (DRM) technology is needed to thwart piracy or infringement of
intellectual property rights in music, sports commentary and coverage, and other types
of copyrighted content that is transmitted to the public by emerging high-definition
digital radio services (HD Radio) and satellite radio broadcasters.
This report provides a brief explanation of the audio flag and its relationship to
digital audio radio broadcasts, and summarizes legislative proposals, including H.R.
4861 (“Audio Broadcast Flag Licensing Act of 2006”) and S. 2686 (“Digital Content
Protection Act of 2006”), that would authorize its adoption.
Congressional Research Service ˜ The Library of Congress

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Introduction
Although the advent of digital technology has brought about higher quality for audio
and video content, creators of such content and policy makers are concerned that, without
adequate content protection measures, unlawful digital copying and distribution of
copyrighted material may endanger the viability of the motion picture, television, and
music industries.1 As a result, technological measures have been proposed that are aimed
at protecting copyrighted media from, among other things, unauthorized reproduction,
distribution, and performance. One of these content protection schemes is the Audio
Protection Flag (APF or “audio flag”), which would protect the content of digital radio
transmissions against unauthorized dissemination and reproduction.
Background
What Is Digital Audio? To understand digital audio, an explanation of how
analog and digital technology differ is helpful. Analog technology is characterized by an
output system where the signal output is always proportional to the signal input. Because
the outputs are analogous, the word “analog” is used. An analog mechanism is one where
data is represented by continuously variable physical quantities like sound waves or
electricity. Analog audio technologies include traditional radio (AM/FM radio), audio
cassettes, and vinyl record albums. These technologies may deliver imprecise signals and
background noise. Thus, the duplication of analog audio often erodes in quality over time
or through “serial copying” (the making of a copy from copies).
The term “digital” derives from the word “digit,” as in a counting device. Digital
audio technologies represent audio data in a “binary” fashion (using 1s and 0s). Rather
than using a physical quantity, a digital audio signal employs an informational stream of
code. Consequently, the code from a digital audio source can be played back or
duplicated nearly infinitely and without any degradation of quality. Digital audio
technologies include digital radio broadcasts (such as high-definition radio, or “HD
Radio”), satellite radio, Internet radio, compact discs, and MP3-format music files.
Digital Content Protection. With the advent of digital technology, content
providers have been interested in using content security measures to prevent unauthorized
distribution and reproduction of copyrighted works. These technology-based measures
1 See Internet Streaming of Radio Broadcasts: Balancing the Interests of Sound Recording
Copyright Owners with Those of Broadcasters: Hearing Before the House Subcomm. on Courts,
the Internet, and Intellectual Property, 108th Cong., 2d Sess. (2004)(statement of David O.
Carson, General Counsel for the U.S. Copyright Office), at 34, available on July 28, 2006 at
[http://www.copyright.gov/docs/carson071504.pdf] (“In the absence of corrective action, the
rollout of digital radio and the technological devices that promise to enable consumers to gain
free access at will to any and all music they want will pose an unacceptable risk to the survival
of what has been a thriving music industry. . . “); The Audio and Video Flags: Can Content
Protection and Technological Innovation Coexist?: Hearing Before the House Subcommittee on
Telecommunications and the Internet, 109th Cong., 2nd Sess. (2006)(statement of Mitch
Bainwol, Chairman and CEO of the Recording Industry Association of America) (“[T]he music
industry has faced an immense challenge in online piracy over the past several years. In addition
to sharply declining sales figures, composers, artists, musicians, technicians, and a multitude of
others engaged in the music industry have seen their jobs disappear.”).

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are generally referred to as “digital rights management,” or DRM. As the name suggests,
DRM applies only to digital media (which would include analog transmissions converted
into digital format). Examples of DRM include Internet video streaming protections,
encrypted transmissions, and Content Scrambling Systems (CSS) on DVD media.
In 1998, Congress passed the Digital Millennium Copyright Act (DMCA). The
DMCA added a new chapter 12 to the Copyright Act, 17 U.S.C. §§ 1201-1205, entitled
“Copyright Protection and Management Systems.” Section 1201(a)(1) prohibits any
person from circumventing a technological measure that effectively controls access to a
copyrighted work. This newly created right of “access” granted to copyright holders
makes the act of gaining access to copyrighted material by circumventing DRM security
measures, itself, a violation of the Copyright Act. Prohibited conduct includes
descrambling a scrambled work, decrypting an encrypted work, and avoiding, bypassing,
removing, deactivating, or impairing a technological measure without the authority of the
copyright owner.2 In addition, the DMCA prohibits the selling of products or services that
circumvent access-control measures, as well as trafficking in devices that circumvent
“technological measures” protecting “a right” of the copyright owner.3
In contrast to copyright infringement, which concerns the unauthorized or unexcused
use of copyrighted material, the anti-circumvention provisions of the Copyright Act
prohibit the design, manufacture, import, offer to the public, or trafficking in technology
produced to circumvent copyright encryption programs, regardless of the actual existence
or absence of copyright infringement.
The “Audio Flag”
One form of DRM technology that may be used to protect the content of digital audio
transmissions from unauthorized distribution and reproduction is the “audio flag.” The
flag has two primary aspects: a physical component and rules and standards that define
how devices communicate with flagged content transmitted from digital audio sources.
For instance, a satellite digital audio radio stream of a particular broadcast music program
could contain an audio flag (the mechanism) that prohibits any reproduction or further
dissemination of the broadcast (the standard). The audio flag, according to its proponents,
would operate in a similar manner as the video broadcast flag that has been proposed for
digital television transmissions.4 Functionally, the audio flag system would work by
embedding a special signal within transmitted digital audio data, informing the receiving
device of certain copyright restrictions on the use of the content by the listener — for
example, limiting the number of copies of a recording that the user may make.
Those advocating the use of an audio flag for digital radio programming include
musicians, songwriters, record labels, and other providers of audio content that could be
2 17 U.S.C. § 1201 (a)(3).
3 Id. §§ 1201(a)(2), (b).
4 See CRS Report RS22106, Copyright Protection of Digital Television: The “Broadcast Flag,”
by Angie A. Welborn. The video broadcast flag is an embedded signal in digital television
broadcasts that prohibits reproduction and further distribution of broadcast programs. See also,
CRS Report RL31260, Digital Television: An Overview, by Lennard G. Kruger.

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broadcast to the public through digital transmissions. The Copyright Act bestows several
exclusive rights upon the creator of a work (or the individual having a legal interest in the
work) that permit the copyright holder to control the use of the protected material. These
statutory rights allow a copyright holder to do or to authorize, among other things,
reproducing the work, distributing copies or phonorecords of the work, and publicly
performing the work.5 Parties holding a copyright interest in content transmitted through
digital radio services are interested in ensuring that such content is protected from
unauthorized reproduction and distribution by the broadcast recipient; the audio flag, in
their view, is an effective way to achieve this objective and enforce their rights.
Proponents of audio flag technology also suggest that it would help prevent certain
digital radio services (like satellite radio) from becoming a music download service
through the creation of recording and storage devices that allow for further reproduction
and distribution of audio broadcasts.6 Some copyright holders argue that these
broadcasters must either pay additional royalties for the privilege of offering what appears
to be a music download service, or comply with an audio flag regime that will effectively
prevent broadcasters from allowing the recording in the first place.7
Rights That May Be Affected by the Audio Flag Proposal
Critics of the audio flag proposal raise concerns that such a government-mandated
measure may stifle technological innovation and restrict the rights of consumers to record
broadcast radio — conduct that, according to audio flag opponents, is protected by the
Audio Home Recording Act of 1992, as well as “fair use” principles in copyright law.
The Audio Home Recording Act of 1992. The introduction of the Digital
Audio Tape (DAT) by Sony and Philips in the mid-1980s prompted passage of the Audio
Home Recording Act (AHRA) in 1992.8 A DAT recorder can record CD-quality sound
onto a specialized digital cassette tape. Through the Recording Industry Association of
America (RIAA), sound recording copyright holders turned to Congress for legislation in
response to this technology, fearing that a consumer’s ability to make near-perfect digital
copies of music would displace sales of sound recordings in the marketplace.9
The AHRA requires manufacturers of certain types of digital audio recording devices
to incorporate into each device copyright protection technology — a form of DRM called
the Serial Copying Management System (SCMS), which allows the copying of an original
digital work, but prevents “serial copying” (making a copy from a copy). In exchange,
the AHRA exempts consumers from copyright infringement liability for private,
noncommercial home recordings of music for personal use. Manufacturers of audio
5 17 U.S.C. § 106.
6 For detailed information about satellite radio and music licensing matters, see CRS Report
RL33538, Satellite Digital Audio Radio Services and Copyright Law Issues, by Brian T. Yeh.
7 See RIAA’s Executive Comments to the FCC on HD Radio, available on July 31, 2006, at
[http://www.riaa.com/news/newsletter/061604_2.asp].
8 P.L. 102-563 (1992), codified at 17 U.S.C. §§ 1001 et seq.
9 H.REPT. 102-873, at 18-19 (1992).

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equipment, sellers of digital recording devices, and marketers of blank recordable media
are also protected from contributory infringement liability upon payment of a statutory
royalty fee — royalties that are distributed to the music industry. Opponents of the audio
flag contend that the AHRA created a “right” for consumers to make digital recordings,
a practice that might be limited or even effectively revoked by audio flag mandates.10
Fair Use. The doctrine of “fair use” in copyright law recognizes the right of the
public to make reasonable use of copyrighted material, in certain instances, without the
copyright holder’s consent. Because the language of the fair use statute is illustrative,
determinations of fair use are often difficult to make in advance — it calls for a “case-by-
case” analysis by the courts.11 However, the statute recognizes fair use “for purposes such
as criticism, comment, news reporting, teaching, scholarship, or research.”12 A
determination of fair use by a court considers four factors: (1) the purpose and character
of the use, including whether such use is of a commercial nature or is for nonprofit
educational purposes; (2) the nature of the copyrighted work; (3) the amount and
substantiality of the portion used in relation to the copyrighted work as a whole; and (4)
the effect of the use upon the potential market for or value of the copyrighted work.13
In the context of digital music downloads and transmissions, some alleged copyright
infringers have attempted to use the doctrine of fair use to avoid liability for activities
such as sampling,14 “space shifting,”15 and peer-to-peer (P2P) file sharing.16 These
attempts have not been very successful, as several federal appellate courts have ruled
against the applicability of the fair use doctrine for these purposes.17 No litigation has yet
settled the extent to which home recording of an audio broadcast (whether transmitted
through digital or analog means) is a legitimate fair use.
10 See, e.g., The Audio and Video Flags: Can Content Protection and Technological Innovation
Coexist?: Hearing Before the House Subcommittee on Telecommunications and the Internet,
109th Cong., 2nd Sess. (2006)(statement of Gary J. Shapiro, for the Consumer Electronics
Association and the Home Recording Rights Coalition), at 8-9, available on July 31, 2006, at
[http://energycommerce.house.gov/108/Hearings/06272006hearing1960/Shapiro.pdf].
11 Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 577 (1994).
12 17 U.S.C. § 107.
13 17 U.S.C. §§ 107(1)-(4).
14 In the digital music context, sampling is a term that refers to the supposed ability of a user to
make copies of copyrighted materials prior to purchase. See A&M Records, Inc. v. Napster, Inc.,
114 F.Supp. 896 (N.D. Cal. 2000), aff’d in relevant part, 239 F.3d at 1018 (9th Cir. 2001).
15 Id. Space shifting occurs when users access CD sound recordings on their computers and
portable audio devices.
16 P2P file sharing is facilitated by software that establishes network connections between
computers to enable the exchange of data over the Internet. For more information on this topic,
see CRS Report RL31998, File Sharing Software and Copyright Infringement: Metro-Goldwyn-
Mayer Studios, Inc. v. Grokster, Ltd., by Brian T. Yeh and Robin Jeweler.
17 See, e.g., A&M Records, Inc. v. Napster, Inc., 114 F.Supp.2d 896 (N.D. Cal. 2000), aff’d, 239
F.3d 1004 (9th Cir. 2001); In re: Aimster Copyright Litigation, 334 F.3d 643 (7th Cir. 2003), cert.
denied, 540 U.S. 1107 (2004).

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Critics of the audio flag also suggest that it places technological, financial, and
regulatory burdens that may stifle the innovation behind digital audio technologies. They
argue that the audio flag may limit the functionality of digital audio transmissions in favor
of analog transmissions — thereby negatively affecting the digital audio marketplace.18
Audio Flag Legislation Introduced in the 109th Congress
Legislation that expressly delegates authority to the Federal Communications
Commission (FCC) to mandate audio flags for digital radio transmissions would appear
to be necessary before the FCC could take such steps, in the wake of a decision by the
United States Court of Appeals for the District of Columbia Circuit in 2005 that vacated
an FCC order requiring digital televisions to be manufactured with the capability to
prevent unauthorized redistributions of digital video content. The federal appellate court
ruled that the FCC lacked the statutory authority to establish such a video broadcast flag
system for digital television under the Communications Act of 1934.19
On March 2, 2006, Representative Mike Ferguson introduced H.R. 4861, the “Audio
Broadcast Flag Licensing Act of 2006.” The bill would empower the FCC to promulgate
regulations governing the licensing of “all technologies necessary to make transmission
and reception devices” for digital broadcast and satellite radio.20 The bill would direct
that any such digital audio regulation shall prohibit unauthorized copying and
redistribution of transmitted content through the use of a broadcast flag or similar
technology, “in a manner generally consistent with the purposes of other applicable law.”
On May 1, 2006, Senator Ted Stevens introduced S. 2686. Among its many
provisions, the “Digital Content Protection Act of 2006” (Title IV, Subtitle C of S. 2686)
addresses the FCC’s authority to regulate the use of a video and an audio flag. Section
453 of the bill, adding new section 47 U.S.C. § 343, would grant the FCC the authority
to issue “regulations governing the indiscriminate redistribution of audio content with
respect to — digital radio broadcasts, satellite digital radio transmissions, and digital
radios.”21 Section 454 would direct the FCC to establish an advisory committee known
as the “Digital Audio Review Board,” composed of representatives from several
industries, including information technology, software, consumer electronics, radio and
satellite broadcasting, audio recording, music publishing, performing rights societies, and
public interest groups. The Board would be responsible for drafting a proposed regulation
that reflects a consensus of the members of the Board and that is “consistent with fair use
principles,” although the bill does not define whether such “fair use” has the same
connotation as that used in the copyright law.
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18 See, e.g., The Audio and Video Flags: Can Content Protection and Technological Innovation
Coexist?: Hearing Before the House Subcommittee on Telecommunications and the Internet,
109th Cong., 2nd Sess. (2006)(statement of Gigi Sohn, President of Public Knowledge) at 5-6,
available on July 31, 2006, at [http://energycommerce.house.gov/108/Hearings/06272006
hearing1960/Sohn.pdf].
19 Am. Library Ass’n v. FCC, 406 F.3d 689 (D.C. Cir. 2005).
20 H.R. 4861, 109th Cong., 2d Sess. (2006)(bill as introduced).
21 S. 2686, 109th Cong., 2d Sess. (2006)(bill as introduced).

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