A United States federal appeals court today negated the efforts of the Federal Communications Commission (FCC) to mandate that television equipment comply with the broadcast flag.
As broadcasters have moved towards transmitting digital signals, they wanted to include in those transmissions a bit of information – a flag – instructing the devices receiving them whether or not they can record the signal. Where the FCC came in was in demanding that television equipment manufacturers design their equipment – which everyone will need to receive the digital signal – to obey this flag.
The ruling today basically said that the FCC had overstepped its authority in issuing this requirement. The FCC is allowed to regulate devices in how they receive a broadcast signal, but it has no authority to tell television hardware manufacturers what the equipment may or may not do with the signal once it has been received.
The next step for the television networks who wanted the broadcast flag is to lobby Congress to either pass legislation itself requiring television hardware to comply with it, or to grant the FCC the authority to make the rule, which it currently doesn't have. It's questionable, however, whether such legislation will be politically popular, since it basically results in keeping people's TVs from doing what people want them to do.
In other words, people like to be able to record television shows. The US Supreme Court Sony decision says we can do that. (It's called "timeshifting.") If the broadcast flag comes into being, when the broadcasts become digital, we will likely no longer be able to. But as of today, thanks to this legal decision, devices built to receive the digital signals will still be able to let us record them, just as we do with television now.