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

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

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...

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

Company Claims Legal Right To Stream Broadcast TV Online; Broadcasters Disagree

from the ah,-copyright-loopholes dept

Here's a fun one. Just as Hollywood is getting especially freaked out about TV shows being available online, and is pushing for this new censorship law to block any site that points people to such video content, a Seattle company named ivi is brashly declaring a legal right to stream broadcast TV online. After the company launched a few weeks ago, it almost immediately received cease & desist letters from NBC, CBS, Fox, Disney, MLB and others. So, it's decided to step up and file a lawsuit to get a declaratory judgment of non-infringement: The company is clearly trying to milk this for the publicity (they sent us the press release about the lawsuit trying to drum up attention). What's interesting, of course, is the legal "theory" behind this. Basically, they point to Section 111 of the Copyright Act, which allows for "secondary transmission" of certain over-the-air broadcasts for a nominal fee to the Copyright Office. The intention behind Section 111 was to let cable providers rebroadcast local network television to cable customers, without having to negotiate with every local TV station. Whether or not that also applies to a company like ivi broadcasting online... is an open question that the court will have to settle.

That said, this does seem like a lot of hype over not very much. While the company has suggested in interviews that it intends to offer cable channels like ESPN at some point in the future, right now it only offers retransmission of broadcast network TV -- as that's all that Section 111 is designed to cover. If it wants to offer any other channel, it's either going to have to work out some sort of deal (highly unlikely) or come up with some other legal loophole (which probably won't work). The company's business model is to charge users a monthly fee to get this content -- which seems like a pretty big request, considering most people can get network broadcast TV for free. Perhaps it's appealing to Americans abroad who want to watch their local news back home, but that seems like a limited market.

Of course, the company does make the quite reasonable argument that the content it's retransmitting is available for free, they are showing all of the commercials, and they are reporting their viewers to Nielsen, so it is difficult to argue what these networks are actually losing by allowing ivi to go forward. I'm sure the TV companies' response is that it's somehow "taking" their right to try to charge for programs online via sites like Hulu, but that's not that compelling an argument. If something like a Slingbox is allowed -- where I can set up a system to retransmit the TV service I receive in my home to my internet connected device, perhaps there is an argument that a network-connected Slingbox is equally legal. To some extent, you could see a second version of the famed Cablevision lawsuit, which questioned whether or not you could set up a remote DVR. If that's legal, perhaps a remote Slingbox would also be legal... There have been a few companies that have simply set up remotely hosted Slingboxes, which resulted in some public griping, but I'm not aware of any actual lawsuits. Thus, it could be interesting to see where ivi goes with this...

Filed Under: cable, copyright, secondary transmission, web
Companies: ivi