Copyright Damages Out Of Control: $51 Million For Satellite Cracking App?

from the seems-a-bit-extreme dept

Thu, Jan 28th 2010 2:53am — Mike Masnick

It continues to amaze me that there's anyone out there who thinks that the damages awarded in many copyright suits are anywhere close to reasonable or proportional to the "crime" at hand. Copycense points us to an article about a guy who was found guilty of putting software on the internet that allowed people to unlock Dish Network programming on unauthorized receivers. Because of this, Dish and another satellite TV provider, NagraStar, were awarded $51 million. $51 million -- for putting the software on the internet. That's all. The amount was determined based on the number of people who downloaded the software, even though, in all likelihood, a much, much smaller percentage would have ever actually paid for an authorized satellite TV account. Furthermore, this guy did not do the actual act of accessing the unauthorized signal, or breaking any encryption. He merely provided the tools to do so. Charging him with the bogus "cost" of each user of his software makes no sense at all. Even if you accept what he did was wrong and clearly illegal, it's difficult to see how that justifies the ridiculousness of the award.

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Filed Under: copyright, damages, encryption, satellite
Companies: echostar, nagrastar

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The Infamous Joe (profile), 28 Jan 2010 @ 3:24am

iphone
Watch out, iPhone jailbreaking team, you're about to get hit with a $450 Billion appspot piracy bill.
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The Infamous Joe (profile), 28 Jan 2010 @ 3:26am

Re: iphone
Appspot = app

Droids does "corrections" on the fly. :/
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Anonymous Coward, 28 Jan 2010 @ 4:09am

I actually have trouble with the whole dish thing.

They are bombing my house with their satellite signals all day long. If I catch some of those signals without paying anyone, I'm a criminal.

I just feel like it's like putting money on my doorstep, and then complaining when I pick it up.
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The Anti-Mike (profile), 28 Jan 2010 @ 4:13am

Re:
You can catch the signals all you like - you cannot decode them.

They are putting the money on your doorstep in a heavy, secure safe, and you are having to use dynamite to get in.
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Anonymous Coward, 28 Jan 2010 @ 4:20am

Re: Re:
Going in line with the logic in this case; Alfred Nobel would be the one liable for inventing the dynamite, right?
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Michael Lockyear, 28 Jan 2010 @ 4:22am

Okay, I have to ask, where can we get this software?
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Anonymous Coward, 28 Jan 2010 @ 4:48am

Re:
thank you Michael, id like to know as well
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Anonymous Coward, 28 Jan 2010 @ 4:49am

Re: Re:
Eh, I'd give up on that analogy.
If someone leaves a safe on my doorstep without permission I'm not going to feel too guilty about opening it.
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The Anti-Mike (profile), 28 Jan 2010 @ 4:54am

Re:
there is this thing called the internets, it's a series of tubes. Get near the right tube, and it pops out.
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joe king, 28 Jan 2010 @ 5:14am

Re: Re:
Are you sure about the "..cannot decode them" part? I thought the FCC made it clear that the public OWNED the airwaves and that therefore, if you or I or anyone else is smart enough to build your own blackbox that can decode whatever signals come into your home, then so be it.

It would become illegal if you started to give away, publish or make available your plans so that someoen else could build a black box.
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BobinBaltimore (profile), 28 Jan 2010 @ 5:29am

Note to self...
....while I agree that the damages are ridiculous, all this does is reinforce the need to stay the hell away from content cracking, hacking and stealing activities and tools. How simple is that? The mere fact that DRM is put on content or that content is encrypted is the first, VERY CLEAR signal that someone or some entity - rightly or wrongly - believes they own and have the right to protect that content. While I agree that some of the logic and the methods are really problematic, just observing the signs and being guided by them will largely protect individuals from getting into a legal mess. Yes, yes, there are some exceptions, but that does not invalidate the rule.

So, my note to self: to avoid legal entanglements with rights owners and the owners of content distribution systems like Dish Network, stay away from tools and activities related to cracking their protection, hacking their system or stealing there content without paying.
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John Q. Public, 28 Jan 2010 @ 5:35am

Re: Note to self...
"all this does is reinforce the need to stay the hell away from content cracking, hacking and stealing activities and tools. How simple is that?"

Hello - all you DPI folks ... are you listening?
Oh, sorry, I forgot. This does not apply to you.
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BobinBaltimore (profile), 28 Jan 2010 @ 5:38am

Re: Re: Re:
Nope. The analogy would be to whoever it was that provided the dynamite. As Mike notes, these guys didn't (apparently) create the tool, just distribute it. And yes, my readings as a non-lawyer show lots of examples in criminal prosecutions where those who provided the tools for a crime are prosecuted as part of it. Conspirators, aiding and abetting, providing the means, contributing to, etc. That said, they are not typically fined like this!
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Moooo, 28 Jan 2010 @ 5:41am

Re: Re:
That's funny. If someone else had written that very same comment, I'm quite certain that you would've responded with something about piracy, stealing or just pay for the stuff.
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BobinBaltimore (profile), 28 Jan 2010 @ 5:43am

Re: Re: Re:
Good point, but I *believe* that applies only to the areas of spectrum that are public airwaves (TV, radio, shortwave, CB, etc). Dish and other providers use leased spectrum. I definitely could be wrong on that, though...

Either way, though, there was long a distinction between providing the plans to build a black box to decode and selling the actual box outright. I remember back in the day (late 70s to mid-1980s) when there were OTA movie services using FCC-licensed UHF channels, you could legally buy the plans to build the decoder, but not pre-built boxes themselves. In this case above, the tool, perhaps, amounted to providing the box, rather than the plans.

Please no hate on this one...I'm just thinking it though as a non-lawyer technologist type.
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giddy up, 28 Jan 2010 @ 5:45am

Re: Re:
"You can catch the signals all you like - you cannot decode them. "

It is entirely possible to decode the signal, your claim to the contrary is just plain wrong. Possibly, you meant to say that it is not entirely legal to do such and if you then sell that signal you might be subject to a lawsuit or something.
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Kilroy, 28 Jan 2010 @ 6:14am

Re: Re: Re:
Yes ... wrong indeed! You must patent your idea and SELL the information ... C'mon people!
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Simon, 28 Jan 2010 @ 6:24am

Re: Note to self...
Freedom to tinker?
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Michael, 28 Jan 2010 @ 6:25am

Title Incorrect?
Is the title misleading? What does this have to do with copyright? I don't think any content was illegally copied here.

I admit I did not read the source article on this one.
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Rights Away, 28 Jan 2010 @ 6:29am

First amendment?
So, basically... copyright trumped first amendment rights AGAIN.

For those of you who think this is a good thing, start learning to goosestep. That's where it leads. History shows it.

When the rights of individuals to express themselves are trumped by the rights of corporations to make cash, it is a sad day.

If this guy did not actually commit a crime and published INFORMATION... SPEECH... protected by First Amendment rights, then the guilty party is the government, for passing laws that curtail that freedom, in exchange for kickbacks from the corporations.

Project: United States
Status: Failed

Recommended Action: Revolution
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:), 28 Jan 2010 @ 6:32am

Percentage of what you make per year.
I think damages should not be a solid number but be a percentage of what one earns at the maximum possible to hurt enough and be considered a deterrent it makes no sense, slaping people with 50 million dollars fines when they make 50 grand a year and would have to work a 1000 years to pay out that debt which would lead to poverty and possible forcing them to turn to the illegal side to escape such a fate and it could also make people with the same social status congregate and create their own little societies where they are all criminals anyways and are forgotten by society, and that is a lot of people in the U.S. that according to the PEW study tops 7.3 million people in 2007 expending 49 billion dollars per year.

The PEW Study
U.S. Bureau of Justice Statistics

Those are political decisions that lead to this situation, the same way o thinking that helping bankrupt states and other institutions validating a model of attrition instead of collaboration and non-confrontational approachs that could be used.

Is not just copyright damages that is out of control is the culture ingrained in peoples mind.

Punishment don't solve most things and should be used sparingly to very, very grave and should have the consequences actually thought out beforehand and not emotionally.
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BobinBaltimore (profile), 28 Jan 2010 @ 6:38am

Re: Re: Note to self...
Indeed. But freedom comes with responsibility...if you tinker in areas where others are so obviously looking to assert their perceived rights, there is danger. I'm not at all saying "don't" but just be aware that rights holders - whether you agree with their interpretation of rights or not - may wish to act to protect their perceived rights, putting you in legal jeopardy. This isn't about living in fear of a lawsuit, but just about knowing the risks.

Work the legislative process for change....
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BobinBaltimore (profile), 28 Jan 2010 @ 6:42am

Re: First amendment?
Meh. This guy didn't publish his thoughts on the theory of how to crack a signal, but the tool to actually crack it. Big difference. Relates to the aforementioned difference between providing plans for a descrambler in the old days, versus the box itself.

Yeah, it sucks and the amount is outrageous, but I don't think this is the case to hang a revolution on.
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Anonymous Coward, 28 Jan 2010 @ 6:44am

Re:
Info on the tools, software and "hobby" at:

http://www.ftatalk.com
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John Fenderson (profile), 28 Jan 2010 @ 6:47am

Re: Re:
"You can catch the signals all you like - you cannot decode them."

That doesn't change the fundamental wrongness of the whole thing.

Once I have a series of bits in my house, I should be able to do any mathematical operation to them that I wish. It seems inane and illogical to outlaw math.
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vivaelamor (profile), 28 Jan 2010 @ 6:48am

Re: Re: Re: Note to self...
What are you making with all those mixed signals? Are your mixed signals infringing on anyone else's arguments? I'd be careful if I were you.
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John Fenderson (profile), 28 Jan 2010 @ 6:50am

Re: Re: First amendment?
"Yeah, it sucks and the amount is outrageous, but I don't think this is the case to hang a revolution on."

True, but it is one more piece of straw on that camel's back. And that hay bundle is growing at an ever-increasing pace these days.
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MAC, 28 Jan 2010 @ 7:06am

Re: First amendment?
My guns are buried in a secret place...
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Chronno S. Trigger (profile), 28 Jan 2010 @ 7:16am

Re: Note to self...
I kinda, almost agree with you. Keep away from DRM, the people that make it, and the people that use it.

Now, this guy didn't use the software or make it. He just distributed it. That's like me giving away a sports car knowing full well that it's top speed is 3x the legal speed limit and getting fined every single time the new owner speeds. Plus the fact that the code is utterly worthless without the hardware to back it up, and I didn't see anywhere he was distributing that.

Just because it can be used illegally doesn't mean it will be, and the user should not be punished for can be, only what has been.
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Anonymous Coward, 28 Jan 2010 @ 7:44am

Re: Re: Note to self...
And everyone in prison is innocent. That is what they tell you if you ask.
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pferland, 28 Jan 2010 @ 7:47am

Re: Re: First amendment?
that's the second amendment....
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LostSailor (profile), 28 Jan 2010 @ 8:45am

A Different Kettle of Fish
No matter what one may think of the rightness or wrongness of file-sharing, this is a different story.

Ward was sued under not just the DMCA, but several other statutes. He was providing assistance to others to facilitate unauthorized decryption of a signal. Essentially, this is abetting theft of services, not copying copyrighted content. The DMCA comes in because of the anti-cracking or circumvention clause.

So the damage and loss from potential theft of services may indeed warrant a stiffer penalty. This is not infringement.

Also, the linked article notes:
In a related criminal case, Ward and another Florida resident, Phillip Allison, pleaded guilty last fall in Southern California to a felony count of conspiring to violate the Digital Millennium Copyright Act.
an actual criminal charge relating to the copyright act.
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BobinBaltimore (profile), 28 Jan 2010 @ 8:51am

Re: Re: Note to self...
Chronno, the difference I see here is that the car has legal uses, and in most cases the seller won't know the drivers intent. The software this guy distributed has no apparent legal use, therefore he had to have known that it would be used for illegal purposes. This has been the crux of complications in file sharing rulings, too. File sharing can be and is used for perfectly legal purposes...that some users break the law with it doesn't mean the tool or site breaks the law on its face.

I'm also kinda wondering what else might have been going on in this case, that isn't covered in the DBJ's brief recap, which might justify such a large award. There is a follow-on case already filed against the same guy that charges "that Ward and Allison helped Jung Kwak, the owner of Oceanside, Calif.-based ViewTech Inc., a major importer of “free-to-air” satellite receivers, recruit hackers to crack a new version of Dish Network’s encryption technology." Sounds like there maybe more to the story.

Also interesting that Mike doesn't call out this other case which sorta shows this guy might not be just an oppressed file distributed.
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Hymie Schmidlap, 28 Jan 2010 @ 8:55am

Why Illegal?
This logic is ridiculous. I have seen plans for making a set of lock picks on line. Using this logic, the person that posted the plans should be held responsible for every download of those plans, whether the lock picks were ever used in a criminal break in or not.

This guys lawyers dropped the ball.
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BobinBaltimore (profile), 28 Jan 2010 @ 8:55am

Re: Re: Re: First amendment?
You've got a point. Again, though, with the next case pending against this guy regarding his alleged recruitment of hackers and involvement with importing the set top boxes, I'm thinking there may be more to the story.

There are (unfortunately) plenty of better, cleaner examples of egregious awards against folks who weren't bad actors, just personal use transgressors, if you will.
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Turbo, 28 Jan 2010 @ 8:59am

Why "crime
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LostSailor (profile), 28 Jan 2010 @ 9:22am

Re: Why Illegal?
Because it's made specifically illegal under the statute. The statutes involving lock-picking and burglary are different.

In order to understand whether an act is a crime, you have to know what particular law makes it a crime.
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Anonymous Coward, 28 Jan 2010 @ 9:26am

In the absence of a copy of the decision by the Federal District Court in Tampa, it seems to me that much of the above righteous indignation is without any basis in fact.
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Bengie, 28 Jan 2010 @ 9:44am

Description
They should be forced to describe illegal and legal access based on a physics model.

eg. They shouldn't be able to just say "You can't decode your signals". They should have to describe the legal physical process and show it is different to the illegal physical process.

Heck, all laws should be forced to use proofs and be verified.
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Anonymous Coward, 28 Jan 2010 @ 9:55am

Re: Re: Re:
Or TAM would have told them to fuck off and die.
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LostSailor (profile), 28 Jan 2010 @ 9:58am

Re:
I agree. The decision is not posted on the court's web site and it takes a while for these things to get into Lexis. But reading the actual decision usually clarifies things that brief news articles leave out.
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Anonymous, 28 Jan 2010 @ 12:10pm

Or
Why donest anyone sue the satelite companies for sending airwaves illegally through my living space? I live in my house and here theya re sending cancer waves all accross my living space. Bastards. I want my 52 million in damages.
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LostSailor (profile), 28 Jan 2010 @ 12:36pm

Re: Or
Why donest anyone sue the satelite companies for sending airwaves illegally through my living space?

Uh...because it's not illegal?

But, please, be my guest. You should also sue Verizon, AT&T, T-Mobile, or any other cell phone or Wi-Fi service provider in your area 'cuz they're beaming radio waves through your house. Don't forget to sue all your local radio and broadcast TV stations, too. You could be rich! (or bankrupt).
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Anonymous Coward, 28 Jan 2010 @ 1:23pm

Re: Re: Re: First amendment?
The third amendment is still my favorite.
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batch, 28 Jan 2010 @ 2:50pm

Instead of suing, they could have just fixed the problem. Now, they'll get zero dollars out of this guy and people will continue pirating the signal. Good job!
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I've seen that comment before, 28 Jan 2010 @ 7:12pm

Re: Re: Re: Note to self...
"And everyone in prison is innocent. That is what they tell you if you ask"

I doubt that everyone in prison will tell you that they are innocent. I'm not sure where this silly comment came from, but it has been going around for many years. Believe it or not, there are people who would tell the truth about their reason for being in prison.

A little research would show it is entirely possible that a significant percentage of those incarcerated are not guilty of the crime for which they are serving time. Take a look at the plea bargin bonanza which DAs use to improve their conviction ratings. Poor people have little recourse in defending themselves against this practice. Public defenders are over worked, under paid and probably influenced in some cases. It is no wonder that many take the plea bargin rather than facing much larger charges.
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Or ..., 28 Jan 2010 @ 7:19pm

Re: Or
Or you could encase your entire abode within aluminum foil.
Remember, shiny side out.
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Dish Network, 29 Jan 2010 @ 1:44am

If you really want to watch program through satellite tv then set up dish network in your home rather using any software. You don’t need to spend much. There are many dish network service provider offered low budget monthly scheme like $9.99. Otherwise stay with your present cable connection.
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JEDIDIAH, 29 Jan 2010 @ 11:35am

Re: A Different Kettle of Fish
This is not "abetting theft of service" this is providing cracking tools. Those cracking tools could be used for content you've actually paid for or not. This sort of thing is so far removed from an actual crime that any American should cringe at the thought of something like this be prosecuted.
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LostSailor (profile), 29 Jan 2010 @ 1:17pm

Re: Re: A Different Kettle of Fish
Sorry, not in this case. The cracking files Ward distributed were specifically tailored to circumvent Dish Network encryption and used their proprietary codes to do so. The court found that the files had "no other commercially significant purpose or use."

And this is specifically a crime under several statutes. Cracking encryption like this is indeed theft of service. Defending copyright infringement as fair use is one thing, but theft of services has long been a criminal matter, not a civil one.
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LostSailor (profile), 29 Jan 2010 @ 2:20pm

Re:
Now that I've read at least part of the decision, it's clear that this guy was specifically distributing files whose sole purpose was to break Dish Network's encryption. It was even a summary judgment.

The circumvention of the encryption allows viewers access to all Dish Network channels, including all premium channels for which one would normally pay sometime hundreds of dollars a month.

The court could have awarded damages either under the communication act or the DMCA. Under the communications act, he could have awarded $500,000 per violation, which is defined as a download. Under DMCA, it could have been anywhere from $200 to $2,500 per download.

The judge imposed the minimum damages of $200 each for 255,741 downloads, or $51 million.

So this is hardly a crazy or excessive award, especially considering if only a fraction of those who downloaded used it, could result in many more millions in losses.
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LostSailor (profile), 29 Jan 2010 @ 2:21pm

Re: Re:
Sorry, meant to post the link.

The decision is available here.
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ChuckRunyan (profile), 3 Feb 2010 @ 12:03pm

Re: Percentage of what you make per year.
He had the chance to prove that his damages should be less.

One side argued he should be held liable for everything. He argued some other measure of damages.

Chances are if any group of reasonable individuals had all the information that came out at trial, they would reach the same conclusion or at least understand the result.

And as for free speech rights, the right to expression was codified to serve society as a whole. And the original codification in no way invisioned his activities being speech.

If you want stronger free speech rights, go through the process of amending the Constitution.
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Rob, 2 Sep 2010 @ 4:58pm

I agree thats B.S. CLICK HERE
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Mark Strunk, 4 Sep 2014 @ 10:48am

Re: Re: Re:
The black-box that receives, decodes and translates to TV Screen from the Satellite Open (original/new Broadcast Stations) is Readily Available and Legal. This is the only way to "reach" Rural Areas with limited access to the over the air TV Stations (Mountains, distance). The Government can reach Rural areas by Telephone (Cell or Wireline), but Gov has Regular Public Infotainment.

This is WHY PAY TV for over the air Broadcast Stations
is (or SHOULD BE) Illegal, the SAME Argument applies to
Cable PAY TV.

The legal system is broken and getting worse, Money has more and better Rights than We the People.
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Mark Strunk, 4 Sep 2014 @ 11:06am

Rewards for Pay TV
Who paid $50 million?
Was the guilty guy able to Pay, or did (s)he go to jail?
I object to Pay TV in general, because of the Advertisements. When I Pay it is to avoid the Advertisements. Some say the Movie Theaters have Ads, but this is only for the Theater.
More Specifically to the Satellite Provided Signals.
Is it Legal to Pay (monthly) for over the air Broadcast Stations? I think the Government MUST have a Free way to reach the Rural Areas (mountainous areas, and distance in the Midwest). We have the Right to Choose how to spend Money, but Money has more Rights than us.
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Mark Strunk, 4 Sep 2014 @ 11:32am

Re: Re: Percentage of what you make per year.
Are you Serious about your last statement?

1. Impeach or Recall the 5 Roman Catholic Supreme Court Justices for attempting to establish Catholic State Religion.
2. Restore the Anti Corporation / Empire (East India Trading Company) attitude of the signers of the Constitution.
3. Change the Senate & House to ONLY create Legislation, any voting is only to establish the wording and pass back to the other house. We the People Vote (by phone) on ALL Legislation.

I said the last in 2 sentences. It is Clear that the Approval Rate of the GOV is LOWEST ever, in 3 short paragraphs I described the Solution. GO FOR IT.
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