Customers are still wondering what happened last week when Vista Media Center boxes were unable to record some TV shows. Microsoft has provided an unsatisfactory explanation, according to the Electronic Frontier Foundation which is investigating. The issue relates to the Supreme Court’s Betamax decision which gives viewers the right to record TV shows and a D.C. Appeals Court ruling which forbids the use of the broadcast flag.

Microsoft explained to C|Net, according to the EFF’s Danny O’Brien, that Vista was simply honoring the broadcast flag in accordance with FCC rules. Whether that flag was set by NBC on purpose or an accident is still not clear.

The problem is that the use of that flag is forbidden, according to a D.C. Circuit of Appeals case brought by the EFF and others. So Microsoft is not complying with FCC rules, it’s complying with NBC’s illegal demand, according to Mr. O’Brien.

In turn, that raises the question of how Vista handles the broadcast flag. "In Microsoft’s attempt to ’fully adhere’, they have gone beyond what the FCC ever asked them to do: they have agreed to what broadcast and content owners could only dream of passing by fiat," Mr. O’Brien explained.

The EFF continues to investigate and believes that Microsoft needs to explain in more detail how Vista handles the broadcast flag. If there’s any doubt about the viewer’s right to record broadcast content, Mr. O’Brien told C|Net, "You bet. You have a fair-use right to record TV content, as specified by the Supreme Court in the now-famous Betamax case."

Users of DIRECTV did not report a similar problem when the shows in question were broadcast which sheds further light on the differences between the policies set in DIRECTV equipment versus Vista Media Centers.