Court Says Broadcasters Can't Use Copyright To Block Commercial Skipping

from the good-court-rulings dept

This morning there was a huge victory for common sense in the Ninth Circuit appeals court ruling in the Fox v. Dish case over Dish's AutoHopper technology. As you may recall, pretty much all the major broadcasters sued Dish a year ago, claiming that its AutoHopper technology with the PrimeTime Anytime feature -- which would record the entire primetime lineup, and allow Dish customers to watch everything (starting the next day) while automatically skipping the commercials -- was infringement (and breach of contract). As we noted at the time, the broadcasters' arguments made very little sense. The basis of the argument was that skipping commercials is a form of copyright infringement. We couldn't see how skipping commercials violated the copyright in any way at all, and while Fox pretended it won the initial ruling at the district court level, the reality was that Dish won big.

Fox immediately appealed, and Dish has won big yet again with this latest ruling, which is a huge victory for common sense. The court makes a number of important findings, nearly all of them good and sensible. To be specific, the nature of this ruling was over whether or not the broadcasters could get an injunction to block Dish from offering this technology while the case was ongoing, but the court rejected it, saying that the broadcasters "did not demonstrate a likelihood of success." This means the full trial can still go forward, but the technology can still be offered during that trial. However, the fact that both the district court and the appeals court have clearly stated that they don't see a likelihood of the broadcasters succeeding shows that the broadcasters are likely to be wasting a lot of time and money only to lose.

The key point in this case: skipping commercials is not copyright infringement. For years, Hollywood has tried to claim that skipping commercials is a form of copyright infringement. All the way back in 2002, a TV exec claimed that skipping commercials was a "theft" (even merely going to the bathroom during a commercial). A couple years later they even tried to get Congress to pass a law explicitly banning commercial skipping (sponsored by Orrin Hatch, of course). Without that, they've just been pretending that commercial skipping must be illegal. In court, the TV networks have argued that anything that hurts their business model must be illegal.

Thankfully, the court laughs at this argument, as it should. Among other things, it notes that since the broadcaster doesn't even hold the copyright on the commercial, the commercial skipping issue isn't their copyright issue at all. Furthermore, because it's already been established (thank you Betamax case) that recording a show for the purpose of time shifting is perfectly legal fair use, then removing the commercials from such a show is also fair use:

Yet, as the district court held, commercial-skipping does not implicate Fox’s copyright interest because Fox owns the copyrights to the television programs, not to the ads aired in the commercial breaks. If recording an entire copyrighted program is a fair use, the fact that viewers do not watch the ads not copyrighted by Fox cannot transform the recording into a copyright violation. Indeed, a recording made with PrimeTime Anytime still includes commercials; AutoHop simply skips those recorded commercials unless a viewer manually rewinds or fast-forwards into a commercial break. Thus, any analysis of the market harm should exclude consideration of AutoHop because ad-skipping does not implicate Fox’s copyright interests.

To get to this point, the court reinforces two other important rulings: obviously, the Sony Betamax ruling, which it cites repeatedly to remind the broadcasters that recording shows for time shifting is perfectly legal. While this ruling is well known, recent cases have been trying to chip away at that ruling, so having the court reaffirm some key aspects of that ruling is definitely very important. Perhaps more important, is that the court reaffirms the famed Cablevision case, that said a remote DVR is not infringing in part because the recording is done at the user's discretion. That ruling is from the Second Circuit, and just recently we've seen some maximalists trying to argue that pretty much every other circuit would disagree with that ruling. Except... here the Ninth Circuit seems to have no problem with it.

In this case, the district court determined that Fox had demonstrated ownership of the copyrights of some of the shows. The court then focused on who made the copies of Fox programs using PrimeTime Anytime: Dish or its customers. The district court noted that the Second Circuit had considered a similar question in Cartoon Network LP v. CSC Holdings, Inc. (“Cablevision”), 536 F.3d 121 (2d Cir. 2008). The Second Circuit concluded that Cablevision’s remote-storage DVR system did not directly infringe the plaintiffs’ copyrights. Unlike a typical DVR system, in which a customer’s remote sends signals to the set-top box in her home, users of Cablevision’s remote-storage DVR system sent signals to Cablevision’s central facility, where a copy of the program the viewer selected was created and stored on Cablevision’s central servers. Id. at 125, 130. The question was “who made this copy” – the viewer or Cablevision? Id. at 130. The Second Circuit held that much like a VCR user makes the copy, so did the Cablevision customer.

[....] The district court did not abuse its discretion in concluding that Fox had not established a likelihood of success on this claim. Infringement of the reproduction right requires “copying by the defendant,” Kelly, 336 F.3d at 817 (emphasis added), which comprises a requirement that the defendant cause the copying. See Cablevision, 536 F.3d at 130 (explaining that direct infringement claim turned on “who made” the copies). Fox argues that because Dish participates in the operation of PrimeTime Anytime on a daily basis, Dish made the copies, either alone or concurrently with its users. However, operating a system used to make copies at the user’s command does not mean that the system operator, rather than the user, caused copies to be made. Here, Dish’s program creates the copy only in response to the user’s command. Therefore, the district court did not err in concluding that the user, not Dish, makes the copy.

Looks like other courts aren't quite so down on the Cablevision ruling after all...

The appeals court also does a full fair use analysis (given the above) and finds that there's a very strong fair use argument by Dish. It basically follows the Betamax ruling, noting that home recording and time shifting are noncommercial uses and covered by fair use. On the fourth factor -- the question on the "impact of the market," the court points out that the only real "impact" would be because of the commercial skipping, and as already established, Fox has no copyright interest in the commercials.

However, the record before the district court establishes that the market harm that Fox and its amici allege results from the automatic commercial-skipping, not the recording of programs through PrimeTime Anytime. Indeed, Fox often charges no additional license fees for providers to offer Fox’s licensed video on demand, so long as providers disable fast-forwarding. This indicates that the ease of skipping commercials, rather than the on-demand availability of Fox programs, causes any market harm. And as we have discussed, the commercialskipping does not implicate any copyright interest.

There was, also, a slightly lesser issue of whether or not this whole setup violates Dish's contract with Fox, and once again, the court sides with the district court's ruling. It basically notes that part of the contract claim is really no different than the copyright claim, and they already explained why that's bogus. The other contract claims fall aside based on similar arguments.

There's also a much more narrow issue of whether or not the "quality assurance" copies that Dish makes for itself (to test if the commercial skipping is working properly) violates the contract. This was the one point where the district court sorta kinda went against Dish (and why Fox ridiculously declared victory when the original ruling came out). Here, again, the court rules very narrowly that these copies might infringe on Fox's copyright, but that there's no irreparable harm from those recordings, since they're just used for quality assurance.

Basically, this is yet another complete win for Dish, with the appeals court confirming everything the district court had to say, and highlighting the importance of both the Betamax ruling and the Cablevision ruling in ensuring that basic innovations like the VCR, DVR and the Dish AuthoHopper can continue to advance the public's enjoyment of television content.

Filed Under: autohopper, broadcasters, commercial skipping, copyright, fair use, primetime anytime, remote dvr
Companies: cablevision, dish, fox

Broadcasters To FCC: Now That Our Audience Is Gone, Can We Swear More?

from the last-ditch-shot-at-a-pyrrhic-victory dept

Broadcasters are understandably sick of the fellas at the freaking FCC. It's 2013, but shows on the public airwaves are still forced to follow a weird pastiche of morality rules seemingly cobbled together from the standards of multiple different generations and interest groups. Not only are these rules extremely questionable in a country with free speech, they are plainly obsolete: everyone has easy access to the whole perverted rainbow of obscenity, and enforcing a moral standard of media is clearly a matter of personal and family responsibility. Public TV networks no longer have the influence on culture that they used to, given competition from cable, online media, and other things over which the FCC has no control — and, surprisingly enough, the broadcasters themselves are now making that very argument:

ABC, CBS, Fox, and NBC also say that rules are archaic because the networks have lost so much cultural clout. Fox says in an FCC filing, “Americans today, including children, spend more time engaged with non-broadcast channels delivered by cable and satellite television, the Internet, video games and other media than they do with broadcast media.” In a separate filing, NBCUniversal observes that ”Broadcast TV is not a uniquely pervasive presence in the lives of 21st Century Americans.” Broadcast network affiliates’ total day share of viewing “was just 28 percent in the 2010-2011 television season – compared to the 53 percent viewing share held by ad-supported cable programming networks.” CBS also notes that “the day when a child watching television was almost certain to be watching broadcast television has long since passed.”

Looks like someone at the TV networks realized what year it is too. We may need to update the NBC business model:

Of course, what goes unmentioned is the fact that escaping FCC regulations is clearly part of a plan to regain relevance. Which is entirely fair. There are a bunch of reasons for the decline of network television, primarily technological, but the fact that so many top-level stars, producers and showrunners are flocking to the less-restrictive world of cable and the internet certainly can't be helping. Look at a huge network hit like Seinfeld: after that success, and with a virtual carte-blanche to experiment, of course Larry David would make his next show for a cable network like HBO. And as Julia Louis-Dreyfus once remarked in an episode of said show, "I want to be able to say fuck," so it's hardly a surprise that a show like Veep ends up on HBO too. Plus Veep's creator, Armando Iannucci, hails from the UK with its early watershed hour, at which point broadcast shows can do pretty much whatever they like — it's hard to imagine him wanting to work within the confines of FCC regulations either. That's a whole bunch of talent creating successful, critically-acclaimed shows — and not creating them for NBC, the network that spawned the breakout hit that got the ball rolling in the first place.

Let's hope the FCC listens. The networks have a whole lot of work to do if they want to regain real relevance, and they haven't always been good at it, but I have no desire to see them further hindered by obsolete morality rules pushed by the busybodies at the Parents Television Council (who, it will surprise nobody to learn, vociferously oppose these filings). Let's give NBC a chance to make the next Eastbound & Down or Lucky Louie. Let's let ABC scrap Dancing With The Stars in favor of Katherine Ryan's more innovative The Voice competitor, The Ass. And let's let PTC president Tim Winter squirm in the home theater throne from which he judges all that is wrong on the air, as the epidemic of pixellated nudity becomes an explosion of Game of Thrones-style sexposition. The broadcasters have enough problems already.

Filed Under: broadcasters, fcc, indecency, swearing
Companies: abc, cbs, fox, nbc

TV Broadcasters Sue Alki David's TV Streaming Service Once Again, To Establish More Bad Precedents

from the ugh dept

For many years we've pointed out that the self-promoting Alki David seems to get engaged in a variety of ridiculous lawsuits partly as a publicity stunt to build up his own brand. Nearly everything he does seems to be focused on the publicity value of it -- such as renaming his online TV streaming service from FilmOn, as it was known, to AereoKiller and BarryDriller to mock Barry Diller's Aereo. And, unfortunately, in this case those stupid publicity stunts may lead to some really bad case law. As many people know, despite David claiming that his service (whatever name you want to call it) was no different than Aereo, it is different. Aereo carefully followed various court rulings that indicated how to set up such a service that doesn't infringe -- and so far it's won the lawsuits filed against it by the TV networks.

"AereoKiller," on the other hand, has been losing badly, such that the service is currently barred in most of the western US. Now the networks figure they might as well go in for the kill and have sued David's AereoKiller yet again, this time in the DC Circuit, to try to get a similar ruling on the east coast. The networks could have sued Aereo itself -- as they've been threatening -- but it seems clear they realize that the case against David is much stronger (perhaps, in part, because David himself seems like a goofball who doesn't take any of this seriously, but also because of the company's own actions).

But, of course, bad cases make bad law, and the AereoKiller case is a bad case. There are a bunch of issues related to the whole thing, and it seems quite likely David will lose -- but that precedent will now be available to be used against Aereo itself (and a variety of other innovative services). The end result could be a disaster, and the TV broadcasters know it, because that's exactly what they want.

Filed Under: alki david, broadcasters, copyright, dc circuit, transmission rights, washington
Companies: aereo, aereokiller, allbritton, disney, filmon, fox, nbc universal, telemundo

Appeals Court Tosses FCC's Media Ownership Rules

from the does-it-really-matter? dept

You may recall that, four years ago, the Kevin Martin FCC pushed through (despite massive complaints from people) some incredibly meek media ownership rule relaxations. As you may know, there were existing rules that said the same company couldn't own a newspaper along with a local TV station. The reasoning behind this was the fear that a single operator of both the paper news and broadcast news would dominate the local news dissemination business and could influence the public too much. Of course, in the age of the internet, that seems really silly. And the FCC's rule change was incredibly minor. As we wrote at the time:

In the top 20 media markets, newspapers can merge with a single radio or TV station -- but not if that TV station is one of the top 4 stations in that market. In other words, newspapers who are struggling to get beyond just being newspapers can finally expand into other media areas. I can't understand why people are freaked out about this. At best, a newspaper can now own a tiny radio or TV station. The fear of only one point of view getting through is totally laughable for a variety of reasons. First, there are more sources of media than ever before in history -- by a long shot. To think that a single TV station or newspaper can dominate the conversation is laughable. Second, since it can't involve a top 4 TV station, it's hard to believe that this new entity will have all that much dominance in the market.

But people still went crazy about this and lawsuits were filed. Over in the Third Circuit, a court has now dumped the new rules on what appears to basically be a technicality. Apparently, the FCC ""failed to meet the notice and comment requirements of the Administrative Procedure Act" to make this change. The standard procedure requires 90 days of response time, but Kevin Martin only gave people 28 days to comment.

Again, this whole thing seems pretty silly. Even if people still rely on broadcast news, this simply isn't going to have that big of an impact.

Filed Under: broadcasters, cross ownership, fcc, limits, media ownership, newspapers

Court Sorta Kinda Allows Marginally More Media Cross Ownership

from the yawn dept

For decades, the US has had certain "media cross-ownership" limits to prevent, for example, a single company from owning both a local broadcast network and a newspaper. These rules came about back when those two were basically the only source one could go to for local news. But, of course, that's not true any more (at all). Instead, you've got local media that is struggling, and perhaps it does make sense for them to not be forced into only playing in a single medium. So, for years the FCC has tried to loosen media ownership rules, leading to complaints from people who still don't seem to recognize that the internet is a pretty big competitor these days with the old media companies. In 2007, the FCC came up with a compromise that very marginally loosened media ownership rules: basically, in just the top 20 media markets, a newspaper could merge with a single radio or TV station but not if that TV station was one of the top 4 in the market. In other words, there was no way this minor loosening of the rules was going to lead to some feared situation of one company dominating the media landscape.

But, still, lots of people protested that suddenly all our news was going to come from Rupert Murdoch, and politicians looked to invalidate the rule while lawsuits were filed. A judge eventually banned putting the rules into effect, but an appeals court has now temporarily lifted the ban. While some are still complaining about this, the impact is likely to be negligible at best. As Editor & Publisher explains:

It's safe to say that Tuesday's Third Circuit action -- which could prove only a temporary lifting of the ban -- won't set off any buying binge among newspapers.

For one thing, nobody is going to lend newspapers money to buy media these days. That lesson's been learned until the next bubble comes around. And even if a newspaper had the jack to swing a deal, there's little point in spending it on the fourth-place -- or worse -- broadcast outlet in town.

Filed Under: broadcasters, cross ownership, fcc, limits, media ownership, newspapers

How To Get Spectrum Back From TV For More Useful Purposes

from the property-rights? dept

If you look at how our radio spectrum is allocated today, you discover that TV broadcasters have a huge chunk of spectrum (that chart doesn't directly display how much spectrum is actually included -- I remember seeing another chart, which I can't find now, that shows proportionally how much more spectrum broadcasters have). This was given to them -- entirely for free -- years ago, when spectrum wasn't used for much. These days, however, spectrum is precious for so many different things, and certainly much of it could be put to better use. Of course, the broadcasters aren't thrilled with giving up any of their windfall. For years, they dragged their feet, kicking and screaming, about switching from analog to digital broadcasting, which was needed to reclaim some spectrum. More recently, they've been fighting attempts to use "white space" spectrum -- which is spectrum that's unused, but close to used spectrum. The broadcasters insist there will be interference, while technologists insist the technology is good enough to block interference.

So, it's interesting that, just as we're hearing of the first tests of white space networks, the FCC is also talking to broadcasters about other ways to reclaim some spectrum and put it to use on something more useful and productive. Apparently, the plan on the table right now would be for broadcasters to give up the spectrum in return for a cut of the revenue the government would get in auctioning off the spectrum for wireless use. Of course, some may find it distasteful that public spectrum that was given to these companies for free can then get sold off with at least some of the money going to those who never bought or truly "owned" the spectrum in the first place. But, given that the FCC set things up in a way where it basically created a de facto ownership structure of the spectrum, it's difficult to see any reasonable way to get that spectrum back without paying for it.

In the link above, Adam Thierer suggests we just give the current holders property rights in the spectrum, and assume that they'll then sell it off to those who can do something more innovative with it (or change and do something more innovative themselves). I've long been a proponent of giving up the ridiculous idea of having the government decide how each slice of spectrum must be used. Why not let the companies who control the various slices of spectrum make use of it as they see fit? It seems more likely that we'd get more efficient uses of the spectrum. So, it's good to see more thinking about ways to put some of that spectrum to better use, but it would be nice if we allowed the market, rather than the government, to figure out how to best use it.

Filed Under: broadcasters, market, spectrum, tv, wireless