Court Not Impressed With ivi's Legal Loopholes, Shoots Online TV Broadcaster Down

from the playing-games-with-the-law dept

Tue, Feb 22nd 2011 4:03pm — Mike Masnick

A few months back, we wrote about a company called ivi, which was trying to use some legal loopholes to stream broadcast TV online. It was basically trying to use a part of the law (Section 111 for those playing along with the home game) that was designed to make it easier for cable stations to rebroadcast network TV. However, the court is not buying it and has issued a preliminary injunction ordering the site to shut down its service. The court points out that ivi isn't just playing a single loophole game, but it's really trying to thread the needle through two separate loopholes. For the strategy to work, not only does Section 111 have to apply to the internet provider, but at the same time, it has to exempt itself from the Communications Act. The court suggests this tapdance is too much to take:

In other words, defendants argue that ivi is a cable system for purposes of the Copyright Act, and thus may take advantage of the compulsory license, but that it is not a cable system for purposes of the Communications Act, and thus it need not comply with the requirements of that Act and the rules of the FCC promulgated thereunder.

The thing is, the more I read the details, the more I actually think that ivi's legal argument makes sense, even if the court disagrees. The problem here is the way the laws are written. A strict reading of Section 111 certainly suggests that ivi probably qualifies and can rebroadcast network TV with a nominal payment to the Copyright Office. At the same time, it's true that the Communications Act almost certainly doesn't apply to ivi, because it doesn't cover the internet. In other words, ivi's careful loophole threading seems to make sense. The more reasonable response from the court wouldn't have been to shut it down, but to allow it to go forward -- and for Congress to determine if that loophole should or should not exist (meaning the TV industry lobbyists step in and Congress shuts the loophole).

All that said, this whole fight seems pretty silly. I still don't understand why the TV networks are that upset by ivi, and I still don't see how ivi has a business model that's particularly compelling or sustainable. The networks might have been better served by just letting ivi flop on its own. I can't see too many people willing to pay up just to get broadcast TV...

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Filed Under: broadcast, cable, copyright, loopholes
Companies: ivi

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cc (profile), 22 Feb 2011 @ 4:28pm

"I still don't understand why the TV networks are that upset by ivi"

It would have been a way around licensing restrictions, I suppose, as users in e.g. Europe could watch US TV without paying money to the European license-holders of the content. This means there was probably a push from foreign broadcasters to shut it down, combined of course with pressure from the IP holders, who always love more restrictions just in case.

The broadcasters themselves probably wanted to get rid of this as well, because the extra viewers watching through this service would not show up on their ratings. In their book that probably counts as a "lost sale", because their air-time has less value for advertisers than if those users were being counted.

tl;dr, a bunch of stupid business models could have been disrupted in case this sort of thing caught on, so the big boys are making sure we stay in the 20th century.
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Anonymous Coward, 22 Feb 2011 @ 4:31pm

I understand it
All that said, this whole fight seems pretty silly. I still don't understand why the TV networks are that upset by ivi, and I still don't see how ivi has a business model that's particularly compelling or sustainable. The networks might have been better served by just letting ivi flop on its own. I can't see too many people willing to pay up just to get broadcast TV...

thats easy. If ivi can do it, so can hulu.
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Jay (profile), 22 Feb 2011 @ 4:33pm

Mike, a head's up
*Insert comment about piracy destroying the product*

*Insert comment about how the networks are great for all because they are protecting their media*

*Insert comment about "The Masnick Effect"*

*Insert freetard comment here*

*Insert "Your mom" joke here*

*Insert War is Peace comment here*

*Insert ??? ---> Profit joke here*

*Insert amazing rebuttal to ivi's destruction with an expensive lawsuit here*

I think that's all of the comments so far...
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coldbrew, 22 Feb 2011 @ 4:37pm

I've given up on using logic within these guidlines. It seems more like a madlib. These people are clearly senile and they need help to figure out their issues.

"I'll be god-damned if they take my license away." We should call the AARP, immediately. We can't just ridicule our old people, we have to teach them. They need help.
'
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tvgal, 22 Feb 2011 @ 4:51pm

Re:
ivi had a closed system, very tightly closed, where it could not be broadcast outside the US. They read the law closely and made sure to follow it from the start.
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tvgal, 22 Feb 2011 @ 4:53pm

Re: Mike, a head's up
Clever little Jay.
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Jay (profile), 22 Feb 2011 @ 4:57pm

Re:
It may have something to do with our law system and how it's emotionally based.

IIRC, a judge can know a law is wrong, but they can't change it. Think of how slashing the Tenenbaum "reward" for the RIAA (aka MAFIAA) was met with an immediate appeal even though it was rather excessive to try to make Tenenbaum pay so much.

Supposedly, it's a balance for law. As it stands, it may be a great impedence on justice. If it's not in the lawbooks, a judge can't really help you.
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Anonymous Coward, 22 Feb 2011 @ 5:20pm

People "Payup" all the time for broadcast TV, ivi might have a better service model.
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Anonymous Coward, 22 Feb 2011 @ 5:20pm

seems like this is icravetv all over again

http://en.wikipedia.org/wiki/ICraveTV
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Anonymous, 22 Feb 2011 @ 5:21pm

Re: I understand it
If ivi was giving away the network TV content instead of charging for it, Masnick would call them "revolutionary, gamechanging, new, exciting, forward thinking," etc.

Mike has no problem with piracy when it is free of charge. But the second ANYONE tries to make money off it (except maybe Google, since Google is tech messiah), it's no longer worth supporting.

We've seen this song and dance before. And we know the word most correct to describe it. I'll give you a hint - it starts with F.
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monkyyy, 22 Feb 2011 @ 5:41pm

Re: Mike, a head's up
u missed me-to-ism
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Atkray (profile), 22 Feb 2011 @ 5:41pm

Re: Mike, a head's up
Are you going to patent this process?
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Jon Healey, 22 Feb 2011 @ 5:47pm

Having it both ways?
From the Communications Act:
(b)(1) Following the date that is one year after the date of enactment of the Cable Television Consumer Protection and Competition Act of 1992, no cable system or other multichannel video programming distributor shall retransmit the signal of a broadcasting station, or any part thereof, except--
(A) with the express authority of the originating station; or
(B) pursuant to section 614, in the case of a station electing, in accordance with this subsection, to assert the right to carriage under such section.
...
(13) the term ''multichannel video programming distributor'' means a person such as, but not limited to, a cable operator, a multichannel multipoint distribution service, a direct broadcast satellite service, or a television receive-only satellite program distributor, who makes available for purchase, by subscribers or customers, multiple channels of video programming

So how again does ivi avoid the requirements of the Communications Act? It's not a Title I information service, it's a Title III multichannel video programming distributor, no?
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JEDIDIAH, 22 Feb 2011 @ 6:03pm

Re: Re: I understand it
This is "broadcast TV".

It's already free. It's already free because of all of those COMMERCIALS. Really, all it is is just a conduit for those commercials.

So why should anyone care if their audience for those commercials is grown?

This goes equally well for "real cable" BTW.

This isn't something that was printing in a finite number of copies. It was already streamed into the ether for anyone with a sufficiently powerful antenna to see.
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Anonymous Coward, 22 Feb 2011 @ 6:05pm

zddsewdarftqagtqtqq
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ChurchHatesTucker (profile), 22 Feb 2011 @ 6:15pm

Re:
The broadcasters themselves probably wanted to get rid of this as well, because the extra viewers watching through this service would not show up on their ratings. In their book that probably counts as a "lost sale", because their air-time has less value for advertisers than if those users were being counted.

So they should have pushed to get Nielson to count them.
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ChurchHatesTucker (profile), 22 Feb 2011 @ 6:15pm

Re:
The broadcasters themselves probably wanted to get rid of this as well, because the extra viewers watching through this service would not show up on their ratings. In their book that probably counts as a "lost sale", because their air-time has less value for advertisers than if those users were being counted.

So they should have pushed to get Nielson to count them.
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Anonymous Coward, 22 Feb 2011 @ 7:30pm

Re: Re: Re: I understand it
Anything transmitted over (monopolized) broadcasting spectra should be required to be released under a permissive license that allows free copying, storing, and redistribution. The government/corporate complex has no business getting a free monopoly on public spectra, spectra that rightfully belongs to the public, spectra that I have as much a right to broadcast to as they do. If they are going to deny me of my right to transmit signals on that spectra then they at the very least have no business denying me of my right to record, store, copy, and redistribute the information transmitted on that spectra to others. If you don't like it, keep your broadcasting signals off public property and keep them off of other people's private property.

If there were no broadcasters, I can freely record, copy, store, and redistribute whatever background noise I get on whatever frequency. It's my right. Just because some out of control tyrant government decides that they can tell me that I can't broadcast whatever I want on that spectra and that only big corporations could doesn't mean that they can also control my ability to record, copy, store, and redistribute whatever comes out of such public spectra to others. That spectra rightfully belongs to the public, not the overly controlling big corporations.
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Beavis, 22 Feb 2011 @ 7:51pm

Re: Mike, a head's up
heh heh heh you said "insert"
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testcore (profile), 22 Feb 2011 @ 8:08pm

Re: Re:
I've always wondered why ad-based TV doesn't just charge it back to the advertisers (their real customers; consider it analogous to retail shrinkage surcharges). Places like JTV even publicly publish viewer totals. If the networks/producers can't count (or estimate i.e. Nielsen) then tough sh*t. You're lazy.
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Anonymous Coward, 22 Feb 2011 @ 8:31pm

Re:
Shit. SOMEONE GET A MOP AND A BUCKET, HIS GRAIN MUSHED OUT OF HIS EARS AGAIN.
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Paul`, 22 Feb 2011 @ 11:40pm

Re:
Really, I don't recall getting my credit card out to watch free to air tv...
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The eejit (profile), 23 Feb 2011 @ 1:38am

Re: Re: I understand it
You've obviously not looked, as usual. There's a story about Crytek's response to the leak of their new game. ivi is worth supporting, as they made sure that they were legal in what they were doing, and someone didn't like it.

The broadcasts are already free. What ivi is doing is:

1) making a stream of these shows for a nominal fee;
2) making sure it's not trying to deliberately step on anyone's toes;
3) trying to stay within the confines of law.

The reason why the comcos are pissed is that they're obsessed with Windows 7 and pissing off customer by not offering a service.
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Anonymous Coward, 23 Feb 2011 @ 4:09am

let me see if i understnad this US law
NBC shows V.2009 lets say on monday

I stream (broad cast) it over cable and thus i would be able to do this ?

NOW can i add commercials before and after and during ( which is modifying the show )
Would the networks be more ok if you put a spot light of say in front saying originally aired on NBC at such n such a time?
COuld i then also have NON americans buy such a service that might not get NBC's tv offerings.

YA see if network tv were smart they'd jump at this and instead a suing like music and movies did and are imploding ( look at the real quality of films and music )
they will not only get less pirating , htey just might if this is done in fair pricing MORE revenue rather then less.
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JEDIDIAH, 23 Feb 2011 @ 7:04am

Not the same is not the same.
If you alter the broadcast, the full weight of copyright law should come down on you because you aren't merely repeating the same signal being broadcast by your local network affiliate anymore.

You aren't just making up for poor quality broadcast signal in the suburbs anymore. You are creating a derivative work and interfering with framework under which the broadcaster is operating.
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Anonymous Coward, 23 Feb 2011 @ 7:18am

Re: Not the same is not the same.
You are assuming that the broadcaster is operating under an honest framework. It is not. The framework that the broadcaster is operating under is one where they, and the govt complex, get to steal my right to broadcast on that spectra in return for absolutely nothing.

If there was nothing broadcasted on that spectra I have a right to take whatever background noise comes out of that spectra, modify it how I please, and redistribute my modifications. Just because some out of control tyrant government wrongfully takes my right to broadcast whatever I please on that spectra is no excuse for them to also wrongfully modify what I record on that spectra however I please and to redistribute the modification. Again, if you don't like it, keep your signals off of public property and keep them off of other people's private property.

(So long as I don't intentionally tell others that the network broadcasted X when they didn't because that would be a lie and telling lies is wrong and even fraudulent if it's for the purpose of making money).
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Anonymous Coward, 23 Feb 2011 @ 11:13am

and PUBLIC BROADCASTING SERVICE
Hmmm. Our tax dollars at work, sharing a bed with Disney and ABC et al. Strange indeed.
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Anonymous Coward, 23 Feb 2011 @ 1:48pm

I think the problem for ivi is that they didn't want to claim to be any one thing. Trying to be one thing in one place and then claim the exact opposite on the other side is always a fail.
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Bill, 23 Feb 2011 @ 2:24pm

Re: Re: Not the same is not the same.
I think your confusing the work "right" with the word "ability". We may have the ability to do something but that doesn't give us the right to do it.
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Scott Owens, 24 Feb 2011 @ 1:40am

ivi serves a growing niche
I stopped subscribing to cable ages ago and I don't own a tv. I use netflix and watch whatever I can online.

However, when it comes to certain live events like the olympics, the world cup, the super bowl. I want nothing more than to see these events live. I am willing to pay to see them for the duration of the event. But I am not willing to pay a huge fee for a cable subscription.

ivi offered a way to spend a few dollars and get access to the content I want to see. Something the cable & broadcast networks are not willing to let me do. And because the dept of homeland security is cracking down on other options.. I am left with no alternatives.

I wanted to subscribe to ivi during the superbowl but they were inundated with requests and had to limit subscriptions. This shows that there is a real demand for their service and it probably is a threat to the networks.

Not only is it cheap. (I think $6 a month) But they even support Linux and Mac. I hope ivi is around during the next live event I want to see because I am totally willing to pay the reasonable price to watch tv the way I want to.
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