10/28/2003 Joint Committee Hearing Notes

The following are notes taken by Tony Campbell at the Tuesday, 10/28/2003 hearing of the Tennessee State Legislature's Joint Committee on Communications Security. These are copied from handwritten notes, checked in some cases (especially lengthy quotes) against a voice recording of some of the proceedings.
The Joint Committee meeting started promptly at 1:00. Senators Trail, Bryson, Person, Norris and Cooper, and Representatives Odom, Briley, Coleman were in attendance. Senator Trail called the meeting to order and asked Stacy Briggs, Executive Director of the Tennessee Cable Television Association to the podium.

Ms. Briggs stated that she was there to point out the information that her group had provided the Committee, and to introduce her speakers. She quoted from the provided material that the current level of analog theft nationwide was estimated at 11.5%, and that she'd seen levels of 5%-25% in Tennessee as of last week. She also claimed that $7.5 million in annual local & state revenues and franchise fees were being lost in Tennessee due to theft of "services we will hopefully continue to provide."

She then introduced the next two speakers, who she said "speak around the country on this specific piece of legislation." Senator Trail asked her why we needed this legislation at all since we already had laws that made cable theft illegal. She stated that the existing law only covers analog, not digital cable theft--giving the impression that, without this new bill, digital cable theft is legal. In responding to Senator Trail's continuing questions about this, she also admitted that the primary goal of the new legislation was getting stronger civil penalties.

The first speaker after Ms. Briggs was Brian Allen, Director of Corporate Security at Time Warner Cable. He began to list items that he claimed were not covered under existing law. After a few acronyms and bits of tech jargon (Wi-Fi, head end, digital filter) were bandied about, Senator Trail stopped him and said "As long as you're talking, pretend that none of us up here understand ANY technical term unless you define it first." Senator Person quoted Trail's great line from last session: "I feel like I'm at the U.N. and my earpiece has fallen out."

Allen explained digital filters, and how they can be used to get Pay-Per-View for free. He then went on to describe "Wi-Fi theft," and described a situation in NYC where a building superintendent subscribed to broadband, then ran a network of antennas through the building and charged tenants $20/month.

Prefacing the next statement by saying "This isn't why we're here, but," he mentioned hypothetical situations where a kiddie-porn addict would pull into the driveway of a Wi-Fi user, download a bunch of pictures, and drive away, leaving the law-abiding citizen to wait for the SWAT team to descend on him. He also said that terrorists could stand outside Wi-Fi user's homes with laptops and coordinate their attacks over the Internet without being traced.

Allen said that since 9/11, the Feds are so busy with anti-terrorism that "they won't even look in our direction," and that's why they turned to the state level with this legislation. They also don't want to have to deal with local prosecutors, he said; "We go after our subscribers civilly, and we will continue to do so." When one senator asked if the law would have to be constantly updated to allow for new technology, he said "No, the statute is broad. We won't be back."

Allen said that he had "toured the states" asking prosecutors how the industry could help with these prosecutions, and the answer was "show us actual damages!" He lamented that you can't show what or how much a cable thief has actually watched. He talked about dealing with the sellers of pirate equipment, and that when he entered a business with a search order, they sometimes already knew his name, and that they'd call other pirates and warn them to destroy their records. "They know that what they're doing is illegal," he lamented.

Allen said that in their Memphis office they have a division that does "tap audits." On the first incident, they cut off the person's cable and offer them service. If no service is established, they check back within thirty days and if the person has reconnected the cable, they disconnect it again and give them a warning. If it is reconnected again by the resident, Time Warner prosecutes. When asked, he did not know the scale of the prosecution or the current success rate of those prosecutions.

At that point, Ann Carr was wildly mouthing to Senator Person that she wanted another of her speakers (Dean Deyo, former CEO of Time Warner Cable Memphis) to take the podium. Deyo went to the mic and briefly stated that prosecutions were brisk, involving large piracy rings and investigations lasting as long as 18 months. He also said that in the Memphis area they believed there were around 60,000 people with illegal cable service.

Allen regained the floor and said that the $6 billion in cable theft losses mentioned in the material given to the committee did not include such items as illegal descramblers and uncapped modems. Senators Trail and Bryson continued to ask questions about the success of prosecutions under the current law, and Allen had no information on that. When asked if, since he had talked to so many prosecutors, if he knew of any who supported this bill, he could name none.

Senator Trail noted that if the Legislature gave the cable companies the power to get $500 civil settlements from each of the 60,000 offenders in Memphis, that $30 million might be a big incentive to come down hard on everyone, including ("and I'm not condoning theft," he said) poor college students who might not even know their cable connection isn't legal. Mr. Allen assured the Committee that that wouldn't happen.

Senator Bryson reiterated his belief that if the industry needed this update to the existing law which seemed (to most of the committee members) to already cover the cable theft issue pretty well, they'd probably be back again as soon as another technology was developed, wanting another change that would take a year or more to sort through. "It seems like we'll always be riding this treadmill," Sen. Bryson said.

At that point Senator Person made a short speech in which he said that it was obvious that the cable industry would have no problem proving actual damages, and that this issue was a complex one that needed to be resolved with legislation that protected the property rights of the cable industry, and the free-speech rights of folks like TNDF.

Mr. Allen continued by saying that the law would not have an effect on free speech, and that TNDF had not been able to provide a single example of how it might. He pointed to sites such as KCWireless.net which talk about wardriving and Wi-Fi sharing, indicating that their continues existence was proof that Time Warner supported free speech. He said the law would have no "chilling effects," because "an intent to defraud is required."

"We don't want to be sheriffs--we don't want to put our subscribers in jail," Allen said. He assured the Committee that FCC regulations preclude cable companies from restricting the connection of any device to their network, unless it damages the network or is used to defraud the service provider.

Senator Bryson made several rapid-fire points that were so good that I forgot to take notes, but it ended with Mr. Allen stumbling into admitting that the real goal was to get large civil settlements. "The reason we go civilly is because we have been successful," he said. As for their claimed problems getting criminal prosecutions, he said "I blame this on the relationship we have with law enforcement." Referring back to their aggressive civil actions, he said "We invest a lot in protecting our product."

The next speaker was Todd Flournoy, Counsel and Director of State Legislative Affairs for the MPAA. "On behalf of Jack Valenti, I thank you for this opportunity," he intoned. He explained that the MPAA's members were becoming increasingly involved with digital distribution of their content, and that "If we can't get a handle on Internet piracy, there won't be a content industry."

Senator Trail asked Flournoy what specific services were not covered in the current statutes. Flournoy replied that there wasn't specific coverage of Internet and digital services. Senator Trail answered that it didn't seem necessary to mention every possible service by name since the current law covers essentially all imaginable forms of electronic communication. At that point, Representative Briley (the bill's sponsor) said that for that matter, we could just abolish the whole criminal code and replace it with a law that said simply "Do no harm." Senator Trail responded that he advocated no such thing, only that the solution to a supposedly inadequate law was not necessarily more bad law.

Mr. Flournoy said that the industry was already testing the waters with services such as MovieLink and MovieBeam, and non-video services such as iTunes were growing as well, and the new law was necessary to protect them. Senator Trail quoted the current law's definition of a telecommunication service ("any service provided for a charge or compensation to facilitate the origination, transmission, emission or reception of signs, signals, data, writings, images, sounds or intelligence of any nature of telephone, including cellular or other wireless telephones, wire, radio, electromagnetic, photoelectronic or photo-optical system") and asked how that definition could be construed to not cover those services. Flournoy said that their experience was, and their lawyers tell them that, those services are not covered under existing law in the states. When Trail asked if that applied to Tennessee's law or some other state's law, Flournoy said that Tennessee's existing law was the same as in the eight states where this law has been passed.

Flournoy went on to say that the proposed law "clearly does not affect any sort of legitimate behavior, nor does it--it doesn't affect anything that's not stealing, it doesn't chill research or other consumer behavior." and noted the "three or four different clarifying intent paragraphs" added to underscore just how clear the law was.

This great quote came soon after: "I stand here before you as representing the MPAA, one of the leading advocates of First Amendment rights, assuring you that we've taken every precaution including adding what we believe is redundant language to clarify that unless you're acting with an intent to defraud you're not going to be caught up in this act."

The next speaker was Jim Spears, Vice-President of Government Relations at BellSouth. He stated that BellSouth's issues were currently more narrow, but that "as time goes on, I think we'll be right there with those folks" supporting the new bill, as BellSouth hopes to move into cable TV. BellSouth invests over $400 million a year in their network, much of which goes to broadband support, and so that was Mr. Spears' focus. He said that the FCC defines and regulates BellSouth's DSL services as an information service, not as a telecommunications service, so BellSouth's only immediate concern is that the law's language is expanded to include pure information services. The Committee was almost unanimously dumbfounded that Mr. Spears did not believe that the existing law's definition of telecommunication service did not include an information service.

Senator Briley, however, made the following astonishing statement: "I think it depends on how you read that definition. It means 'any service provided for a charge or compensation to facilitate the origination, transmission, emission or reception of signs, signals, data, writings, images, sounds or intelligence of any nature of telephone.' 'Of telephone.' So all those services or--or items have to be 'of telephone' in order to be telecommunications services. Now I think, you know, that the layman's understanding of plugging your computer into a wall and communicating with a computer somewhere else, that's not what I think 'of telephone' means."

Representative Odom pointed out, "Well, you've gotta read the rest of it: '...including cellular or other wireless telephones, wire, radio, electromagnetic, photoelectronic or photo-optical system,'" and Representative Briley fell silent. Odom went on to express his misgivings in terms of the concern that was being expressed by people statewide over the far-reaching effects of this bill.

Ross Loder, representing the Tennessee Municipal League, was next to speak. He stated a desire for the League to be involved in crafting this legislation and the three concerns that the League members had:
1) The effect of cable theft on franchise fees and taxes
2) The role of local law enforcement, and the need for clear definitions
3) The expansion of power-utility-operating municipalities into cable and broadband services, under Public Chapters 531 of 1997 and 481 of 1999.

The last speaker, subbing for the absent Jeff Yarbrough, was Curtis Person III, son of Senator Person and head of Charter Cable's West Tennessee operation. He gave a brief description of the astonishing amount of cable theft that he saw on a regular basis. In Jackson, Charter is involved in 5-10 prosecutions each month for theft of service. He stated that his concern was for service that were not listed in the existing legislation.

There was a lot of joking around the Committee when Mr. Person stepped up to the podium that the situation was like an episode of the old game show "To Tell the Truth" ("My name is Curtis Person." "No, MY name is Curtis Person!") After Mr. Person spoke, Senator Person took a moment to express his pride in his son's accomplishments, and that the suggestions of impropriety made by TNDF regarding his familial relationship to Charter were unfounded.

At that point I addressed Senator Person directly from the floor. I apologized, and said that TNDF had never stated that Senator Person had acted improperly. Early in the last session, a TNDF member had found a Curtis Person listed on the Internet as an employee of Charter Cable and thought that it was Senator Person. I had replied that it was not him, but his son, Curtis III. Another Internet writer had read the posts on TNDF.net and had made his own judgments, but TNDF had made no such statements. Senator Person then said that he was already aware of that, but appreciated me repeating it.

The hearing was adjourned at about 3:30pm.
Compiled by Tony Campbell for the Tennessee Digital Freedom Network