Appeal from the United States District Court for the Northern District of Indiana, South Bend Division. No. 93 CR 13 Robert L. Miller, Jr., Judge.
Before POSNER, Chief Judge, and KANNE and DIANE P. WOOD, Circuit Judges.
ARGUED SEPTEMBER 29, 1995
William Norris allegedly modified and sold cable television decoder boxes, as well as sold the equipment with which customers could themselves modify decoder boxes. A federal grand jury returned a superseding indictment charging Norris with, among other things, several counts of violating the second part of 47 U.S.C. sec. 605(e)(4), which by reference to 47 U.S.C. sec. 605(a) prohibits facilitation of the unauthorized interception of radio communications. The district court dismissed these counts, holding that the cable television programming that Norris allegedly helped intercept did not constitute communications by radio, and we affirm.
The government alleges that from December 1989 to February 1993, William Norris modified and sold cable television descrambler equipment, thereby allowing his customers to receive premium cable television programming without paying the required subscription fee to their local cable companies. He allegedly modified, and then sold, cable television decoder boxes by installing chips or modules that would enable the decoder boxes to receive and descramble all premium cable channels. He also allegedly sold the chips and modules separately, with tools and instructions so that his customers could modify their own cable television decoder boxes.
On February 4, 1993, a federal grand jury returned an indictment charging Norris with mail fraud, wire fraud, and violations of the first part of 47 U.S.C. sec. 605(e)(4), which is directed at "[a]ny person who manufactures, assembles, modifies, imports, exports, sells, or distributes any electronic, mechanical, or other device or equipment, knowing or having reason to know that the device or equipment is primarily of assistance in the unauthorized decryption of satellite cable programming . . . ." On Norris's motion, the district court dismissed those counts of the indictment alleging violations of the first part of sec. 605(e)(4), holding that Norris's alleged conduct did not constitute the unauthorized decryption of "satellite cable programming," as defined in 47 U.S.C. sec. 605(d)(1). The district court opined that the appropriate prosecutorial vehicle for Norris's alleged conduct was instead 47 U.S.C. sec. 553, which provides that "[n]o person shall intercept or receive or assist in intercepting or receiving any communications service offered over a cable system, unless specifically authorized to do so by a cable operator or as may otherwise be specifically authorized by law." 47 U.S.C. sec. 553(a)(1).
Under sec. 553(b), Norris's potential criminal punishment for violations of sec. 553(a) perpetrated prior to December 4, 1992, would be up to both one year in prison and a $25,000 fine for his first offense, and up to both two years in prison and a $50,000 fine for subsequent offenses. 47 U.S.C. sec. 553(b) (1992), amended by Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, sec. 21, 106 Stat. 1460, 1498. For his subsequent violations allegedly perpetrated after December 4, 1992, Norris's potential criminal punishment would be up to both five years' imprisonment and a $100,000 fine for each violation. 47 U.S.C. sec. 553(b)(2). The government, however, does not consider these authorized punishments to constitute a sufficiently heavy sanction for Norris's alleged wrongdoing. They would prefer to prosecute Norris under sec. 605(e)(4), which authorizes criminal punishment of up to both five years in prison and a $500,000 fine for each violation (including the first). 47 U.S.C. sec. 605(e)(4).
Accordingly, after the district court's dismissal of those counts in the original indictment alleging a violation of the first part of sec. 605(e)(4), the government appealed to this court. However, the government did not challenge on appeal the district court's specific holding that Norris's alleged conduct was not facilitation of the unauthorized decryption of satellite cable programming. Instead, the government attempted to argue that Norris's alleged conduct violated the second part of sec. 605(e)(4), which criminalizes the facilitation of any conduct prohibited in sec. 605(a). The third clause of sec. 605(a), in turn, provides that "[n]o person not being entitled thereto shall receive or assist in receiving any interstate or foreign communication by radio and use such communication (or any information therein contained) for his own benefit or for the benefit of another not entitled thereto." 47 U.S.C. sec. 605(a).
In response to the government's arguments on appeal, we held that the question of whether Norris's alleged conduct violated the second part of sec. 605(e)(4) was not properly before us because the indictment specifically alleged only violations of the first part of sec. 605(e)(4). United States v. Norris, 34 F.3d 530, 532-33 (7th Cir. 1994). Thus, the government returned to the grand jury, and on October 5, 1994, the grand jury handed down a superseding indictment charging Norris with mail fraud, wire fraud, and several violations of the second part of sec. 605(e)(4). The district court then dismissed those counts of the superseding indictment charging violations of sec. 605(e)(4), holding that the modification of cable television decoder boxes does not facilitate the interception of "communication[s] by radio" and therefore is not prohibited conduct under sec. 605(a) and (e)(4).
The government filed a timely notice of appeal on February 10, 1995, and we may now properly address the question of whether the cable television programming that Norris's cable television decoder equipment allegedly helped intercept constitutes "communication by radio" as defined in 47 U.S.C. sec. 153(b), and thus whether the government's complaint properly alleges Norris's violation of sec. 605(a) and (e)(4).
Congress first ventured into significant regulation of radio traffic with an "Act to Regulate Radio Communication," enacted in 1912. Act of Aug. 13, 1912, ch. 287, 37 Stat. 302. The 1912 Act defined "radio communication" as "any system of electrical communication by telegraphy or telephony without the aid of any wire connecting the points from and at which the radiograms, signals, or other communications are sent or received." Id. sec. 6, 37 Stat. at 308. Thus, Congress established that radio and wire communications would be ...