PEOPLE v. BABYLON

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Court of Appeal, Third District, California.

The PEOPLE of the State of California, Plaintiff and Respondent, v. Harold John BABYLON and Douglas Arthur Hyatt, Defendants and Appellants.

Cr. 12541.

Decided: August 23, 1983

Thomas W. Bell, Jr., Sacramento, for defendant and appellant Harold John Babylon. James R. Browning, Sacramento, for defendant and appellant Douglas Arthur Hyatt. John Dougherty, Dist. Atty., and George M. Hendrickson, Deputy Dist. Atty., for plaintiff and respondent.

This case involves the interpretation and application of Penal Code section 593e,1 which provides in pertinent part that “Every person who for profit knowingly and willfully manufactures, distributes or sells any device ․ with the purpose or intention of facilitating interception or decoding of any over-the-air transmission by a subscription television service made pursuant to authority granted by the Federal Communications Commission [FCC] which is not authorized by the subscription television service is guilty of a misdemeanor ․”  Following a court trial in Sacramento Municipal Court, Douglas Hyatt and Harold Babylon were found guilty of violating section 593e.   The appellate division of the superior court reversed, finding section 593e “unconstitutionally vague and overbroad as applied [to these defendants].”   We thereafter ordered the case transferred to this court pursuant to rule 62 of the California Rules of Court.

The matter was submitted to the municipal court on the basis of a stipulated statement of facts.

California Satellite Systems (CALSAT) is the exclusive distributor of Home Box Office (HBO) in the Sacramento area.   HBO program material originates in New York and is beamed via a communications satellite to an earth station 2 in Sacramento.   The programming signal is then transmitted to Sacramento Microband (Microband), a so-called multipoint distribution service under contract to CALSAT.   Microband transmits the HBO programming through an omnidirectional, high frequency microwave signal capable of being received by all homes in the area.   CALSAT provides HBO subscribers with special equipment 3 which converts this high frequency signal to a standard frequency suitable for reception on individual television sets.   CALSAT is not the holder of any license or permit from the FCC and none of the equipment it provides requires an FCC license to manufacture, own, sell, install, or operate.

Under FCC regulations, a delivery system such as Microband which transmits high frequency microwave signals is denominated a multipoint distribution service or “MDS.”  (47 C.F.R. §§ 21.2, 21.900–21.908 (1982).)   MDS stations are considered “communications common carriers,” and as such, may transmit paid television programming, as well as other kinds of audio and visual signals.  (47 C.F.R. §§ 21.900–21.908 (1982).)   The FCC also authorizes licensed commercial television stations to transmit subscription television.  (47 C.F.R. §§ 73.641–73.644 (1982).)

On December 10, 1980, investigators from the district attorney's office went to defendant Babylon's place of business, Babylon Electronics in Sacramento, and purchased from him the equipment necessary to receive HBO.   On December 15, 1980, investigators bought similar equipment from defendant Hyatt of Hijack TV.   Both defendants stipulated they “knew at the time of the sale that the equipment was capable of receiving ‘HBO program material’ transmitted by [Microband], that it was going to be used for that purpose and that [they] did not have the consent of CALSAT to sell the equipment to [their] customer[s] for profit.”

I

Defendants maintain section 593e is inapplicable to them because “there is no over the air transmission by a subsctiption [sic ] television service in the Sacramento area.”   Defendants do not deny that CALSAT offers a subscription television service, but contend the transmissions here are unprotected because the delivery system utilized by CALSAT is designated under federal law as a multipoint distribution service.  (47 C.F.R. § 21.2 (1982).)

Over-the-air subscription television services 4 may be provided by commercial television broadcast stations or, as in this case, an MDS in conjunction with a service provider.   The major difference between the two systems is that in the former instance the transmissions are provided by the television station itself over UHF and VHF frequencies, whereas in MDS systems the pay television service contracts with a common carrier to provide the transmissions over a microwave frequency.   Different equipment is needed under each system in order to obtain reception adequate for viewing.   But the difference in delivery systems, and the technical appellations given to them, cannot alter the fundamental fact that each has as its central purpose, the transmission of subscription or pay television signals.

We are obviously presented with an anomalous situation, one which the Legislature did not anticipate.   The television signal, intended to be intercepted by the equipment sold by defendants, was a paid-for subscribed transmission sold by CALSAT to its subscribers.   The defendants argue that since the signals to be intercepted are not distributed by an over-the-air encoded transmission by a “subscription television service” authorized by FCC, the statute does not apply.   If we were to apply section 593e in that literal manner, an obviously absurd result would obtain.   To interpret section 593e as defendants urge, we would of necessity be applying a rule of strict penal statute construction.  “There is no such rule in California;  penal statutes ‘are to be construed according to the fair import of their terms, ․ to effect [their] objects and to promote justice’ (Pen.Code, § 4;  1 Witkin, Cal.Crimes, § 10, pp. 12–13).”  (People v. Upchurch (1978) 76 Cal.App.3d 721, 723, 143 Cal.Rptr. 113;  see also People v. Malcolm (1975) 47 Cal.App.3d 217, 222–223, 120 Cal.Rptr. 667;  People v. Van Alstyne (1975) 46 Cal.App.3d 900, 913, 121 Cal.Rptr. 363.)

 It is axiomatic that the construction of a statute which appears to be reasonable is to be preferred.   Moreover we are constrained to construe statutes as to avoid absurd results.  (Interinsurance Exchange v. Ohio Cas. Ins. Co. (1962) 58 Cal.2d 142, 153, 23 Cal.Rptr. 592, 373 P.2d 640.)

 In our view the legislative intent was to protect all such services no matter what delivery system and frequency is utilized.

The legislative history of section 593e does not speak directly to the question of whether a distinction should be drawn between the two methods of transmitting subscription television and the issue has apparently not previously been addressed in the courts;  however, a statement of purpose in the urgency clause of the bill appears to indicate that no such distinction was intended.   It speaks of the “need for legislative protection from piracy and other unauthorized reception of subscription television ․ to protect the subscription television industry.”  (Stats. 1980, ch. 1332, § 3, p. 4671.)   We fail to perceive any reason in law or policy why the Legislature might intend extending protection to part of the industry only.   In the absence of any legislative indication to do so, we decline the invitation to interpret the statute as requested.

Our conclusion finds support in the wording of the statute, which prohibits devices which are intended for “interception or decoding of any over-the-air transmission by a subscription television service made pursuant to authority granted by the Federal Communications Commission ․”  (Emphasis ours.)   It is syntactically improper to say that subscription television services are made pursuant to FCC authority;  more correctly, it is the over-the-air transmissions which are made pursuant to FCC authority.   In addition, the words “decoding” and “interception” in the statute obviously refer to the two major means of pirating the respective commercial television and MDS delivery systems utilized by pay or subscription television service.   Commercial television stations providing subscription television transmit a scrambled or encoded visual signal which is received by every television set in the area;  there is nothing to “intercept.”   Reception is obtained only by those sets equipped with special decoding devices.   In contrast, subscription television services using MDS stations protect against signal interception, by use of high frequency transmission.   The equipment sold by defendants reduces the frequency to the standard utilized by usual television sets.   Subscription television as defined and encompassed by federal regulations deals with signals which are decoded for viewing by devices sold and installed by the particular subscription television service, and as they are regulated by FCC.  (See 47 C.F.R. §§ 73.644(a)(8) and 73.644(b) (1982).)

An examination of the federal regulations and section 593e makes clear the legislative intent not to limit the proscription of the statute to encoded subscription television services only.   The purview of the section obviously applies to multipoint distribution system (MDS) subscription television services, as well, since piracy of those signals involves interception as prohibited by the statute rather than decoding as prohibited by the statute.

We conclude that section 593e's prohibition against the manufacture, distribution or sale of devices for decoding or intercepting over-the-air transmissions by subscription television services was intended to encompass transmissions from MDS stations.

II

Defendants argue that because there are three methods of delivering pay television (cable television, commercial television broadcasting, and multipoint distribution service stations), use of the term subscription television service in its generic sense, to include all three methods, renders section 593e unconstitutionally vague.

First, section 593e refers to “over-the-air” transmissions, thus clearly removing cable television from its purview.   The question is whether because of recognized differences in the other two methods of delivery the term subscription television is unconstitutionally vague.

Federal regulations expressly state that commercial television broadcasting stations may provide subscription television service “upon specific [FCC] authorization ․”  (47 C.F.R. §§ 73.64–73.642 (1982).)   However, the regulations do not restrict the definition of a subscription television service to the delivery of pay television by commercial television stations.   Although the regulations setting forth the purposes for which MDS stations may be put make no specific mention of subscription television service, they do provide that these stations “may render any kind of communications service consistent with [FCC] Rules ․”  (47 C.F.R. § 21.903(b) (1982).)   It is not asserted that Microband's transmission of HBO programming is not authorized.

“It is an established principle of constitutional law that ‘․ a statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application, violates the first essential of due process of law.’   [Citations.]  [¶]  ‘․ Void for vagueness simply means that criminal responsibility should not attach where one could not reasonably understand that his contemplated conduct is proscribed.’  [Citations.]”  (Bowland v. Municipal Court (1976) 18 Cal.3d 479, 491–492 [134 Cal.Rptr. 630, 556 P.2d 1081].)   A criminal provision is vague “ ‘not in the sense that it requires a person to conform his conduct to an imprecise but comprehensible normative standard, but rather in the sense that no standard of conduct is specified at all.’  [Citation.]”  (Parker v. Levy (1974) 417 U.S. 733, 755, 94 S.Ct. 2547, 2561, 41 L.Ed.2d 439, 457.)

 Due process requires that an individual be given fair warning that his contemplated conduct is prohibited by law.  Section 593e, reasonably construed, gives legislative warning of the criminal nature of the prohibited conduct.  “Common sense supplies the same.”  (People v. Wilkins (1972) 27 Cal.App.3d 763, 773, 104 Cal.Rptr. 89.)   In Bouie v. Columbia (1964) 378 U.S. 347, 84 S.Ct. 1697, 12 L.Ed.2d 894, the court applied a lack of due process rule to the prosecution of individuals involved in a sit-in not prohibited by ordinance or statute.   The state court interpretation of a statute to encompass such conduct was felt to be an unconstitutional enlargement of a criminal statute applied retroactively.   Such is not the case in this instance where not only is the interpretation of section 593e reasonable, but defendants must have known their conduct was immoral and that they were “facilitating interception” of a pay television service.  “This is not a case ․ where criminal responsibility should not attach because the actor could not reasonably understand that his contemplated conduct was proscribed.”  (United States v. Rundle (E.D.Pa.1966) 255 F.Supp. 936, 947 (affd. in [3d Cir.1967] 383 F.2d 421, cert. den. 393 U.S. 863, 89 S.Ct. 144, 21 L.Ed.2d 131).)

 Measured against these standards we conclude section 593e does not violate constitutional requirements.   The statute is plainly intended to prohibit the unauthorized interception and use of subscription television transmissions.   The subtle distinctions defendants identify do not detract from section 593e's clear message:  intercepting pay television transmissions is a criminal offense.   Only in the most hypertechnical sense can it be said that a man of common intelligence would have to guess at whether his unauthorized selling of decoding or interception devices for pay television is prohibited.

“ ‘The criterion in such cases is to examine whether common social duty would, under the circumstances, have suggested a more circumspect conduct.’ ”   (Nash v. United States (1913) 229 U.S. 373, 377, 33 S.Ct. 780, 781, 57 L.Ed. 1233, 1235.)

 Here, common social duty would have forewarned defendants that circumspect conduct prohibited sale of equipment capable of intercepting pay television signals.   In our view differences in the morality of selling the several kinds of interception devices cannot be legitimately drawn based on the source of the transmission to be intercepted.

III

 Defendants next contend the statute is overbroad because the equipment sold by defendants can be used to receive transmissions other than the signals from an MDS station.   They contend that “A holding that § 593(e) reaches these MDS transmissions could significantly chill the purchase and sale of such equipment.”   However, in order to be convicted under section 593e, the People must prove more than just a sale of equipment.   It must also be shown that the defendants acted “knowingly and willfully” for profit and with the “purpose or intention” of intercepting and decoding over-the-air transmissions.   These elements effectively eliminate any possibility that the statute will chill constitutionally protected conduct.  (Bowland v. Municipal Court, supra, 18 Cal.3d at p. 493, 134 Cal.Rptr. 630, 556 P.2d 1081.)

IV

Finally, the argument is made that the federal Communications Act (the Act) was intended to preempt the subject matter embodied in section 593e.

“Absent explicit preemptive language, Congress' intent to supercede state law altogether may be found from a ‘scheme of federal regulation so pervasive as to make reasonable the inference that Congress left no room to supplement it,’ ․ Even where Congress has not entirely displaced state regulation in a specific area, state law is preempted to the extent that it actually conflicts with federal law.   Such a conflict arises when ‘compliance with both federal and state regulations is a physical impossibility,’ [citation], or where state law ‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.’  [Citation.]”  (Pacific Gas & Elec. v. Energy Res. Comm'n (1983) ––– U.S. ––––, ––––, 103 S.Ct. 1713, 1722, 75 L.Ed.2d 752, 765.)

 “The fundamental rationale for the Communications Act of 1934 ․ is based on the fact that the number of available radio frequencies is finite, and therefore, Congress must exercise its power over interstate commerce to allocate available frequencies and control their use.  [Citation.]  [There can be little doubt] federal legislation has preempted local regulation of radio transmission, including assignment of frequencies, interference phenomena, and the content of broadcast material.”  (Schroeder v. Municipal Court (1977) 73 Cal.App.3d 841, 846, 141 Cal.Rptr. 85.)   However, it is not made clear that Congress intended to reserve all criminal jurisdiction in the communications field to the federal government.

 Defendants first argue section 593e is preempted because there exists a conflict between it and federal law that is fatal to the state law.   They direct our attention to section 605 of the Act (47 U.S.C. § 605), which prohibits any person not entitled to intercept or receive radio communications from doing so and from using “such communication (or any information therein contained) for his own benefit or for the benefit of another not entitled thereto.”   The statute has been held to prohibit the unauthorized interception of subscription television signals similar to those transmitted by the Microband company here.  (See American Television, Etc. v. Western Techtronics (D.Colo.1982) 529 F.Supp. 617, 620, fn. 4;  Home Box Office, Inc. v. Pay TV of Greater N.Y. (E.D.N.Y.1979) 467 F.Supp. 525, 528.)   We do not perceive any conflict with section 593e;  that section also prohibits unauthorized interception of subscription television signals.   This raises the question of whether Congress intended to occupy the entire field and exclude state regulation even though the federal and state laws are not in conflict with each other.

 Our inquiry is governed by the well-settled principle that a state statute enacted in the exercise of the historic police powers of the state is not deemed displaced by federal law unless that “ ‘was the clear and manifest purpose of Congress.’ ”  (Florida Avocado Growers v. Paul (1963) 373 U.S. 132, 146, 83 S.Ct. 1210, 1219, 10 L.Ed.2d 248, 259;  see also People v. Conklin (1974) 12 Cal.3d 259, 114 Cal.Rptr. 241, 522 P.2d 1049.)   There is nothing in the language of the Communications Act which indicates an intent to occupy the entire field of criminal enforcement.   One commentator has suggested it “goes so far as to make express provision for the exercise of the state's police powers.”  (Note (1958) 44 Cornell L.Q. 94, 103.) 5  In the absence of explicit expression of a congressional intent to preempt, the United States Supreme Court has repeatedly held that states may enact laws which aid in the enforcement of national legislation or penalize conduct also prohibited by the federal government.  (See Annot., 16 Am.Jur.2d, Constitutional Law, §§ 291, 292, pp. 793–799.)   As we fail to find evidence in this case that Congress has “unmistakably ․ ordained” an intent to preempt (Florida Avocado Growers v. Paul, supra, 373 U.S. at p. 142, 83 S.Ct. at p. 1217, 10 L.Ed.2d at p. 257), we conclude the state could properly exercise its police power by making criminal the interception and decoding of subscription television transmissions.

The judgments of the municipal court are affirmed.

FOOTNOTES

1.   Unless otherwise noted, all further code references will be to the Penal Code.

2.   The “earth station” is Satellite Networks, Incorporated, an FCC licensed common carrier.

3.   The primary equipment consists of:  (1) a specially designed microwave antenna, (2) a down converter, and (3) a power supply unit to alter the household voltage so it will operate the down converter.

4.   We are not concerned with cable television, which delivers its signal via a coaxial cable and is therefore not an “over-the-air transmission.”   Unauthorized interception of cable television is prohibited under section 593d.

5.   Section 606(f) of the Act provides, “Nothing in subsection (c) or (d) of this section shall be construed to amend, repeal, impair, or affect existing laws or powers of the States in relation to taxation or the lawful police regulations of the several States, except wherein such laws, powers, or regulations may affect the transmission of Government communications, ․”

EVANS, Acting Presiding Justice.

SPARKS and SIMS, JJ., concur.

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