TV over the internet may be regulated as cable TV after all

July 29, 2015

Cable TV on InternetOn July 16th, a federal judge in the Central District of California, Los Angeles issued a tentative ruling in Fox Television Stations, Inc v. FilmOn X, LLCNo. 2:12-CV-06921 that online television service FilmOn should be treated similarly to a traditional cable system when streaming re-transmissions of broadcast television over the Internet to consumers (sometimes known as over-the-top video or OTT).

Under the Copyright Act, this would entitle FilmOn to a compulsory license to retransmit television programs if it meets the law’s requirements.

Judge Wu of the U.S. District Court, Central District of California, allowed an immediate appeal to the 9th U.S. Circuit Court of Appeals (Docket, No 13-55156 )  in light of the significant commercial implications of his ruling. He also left standing an injunction from 2012 prohibiting FilmOn from streaming the content, until the appeals court rules.

Fox, Walt Disney Co’s ABC network, CBS Corp, Comcast Corp’s NBC Universal and several others filed suit together against FilmOn in 2012 and there is wide news coverage of the litigation (see this search).

The ruling is especially noteworthy after widely followed earlier litigation involving Aereo, a similar and more widely-known service. Both companies use an interesting technical/legal business model involving individual antennas capturing over-the-air television transmissions that are then forwarded to individual subscribers via the Internet. Earlier in 2014, the television broadcast networks succeeded in shuttering Aereo, when the U.S. Supreme Court said that company violated the broadcasters’ copyrights in retransmitting their programs over the Internet. Am. Broad. Companies, Inc. v. Aereo, Inc., 134 S. Ct. 2498 (2014)‌.

Aereo then attempted to be classified as a cable operator (in order to be eligible for a compulsory license) but a NY federal court ruled that the service would not be considered a cable provider under existing law. Am. Broad. Companies, Inc. v. Aereo, Inc., 2014 WL 5393867 (S.D.N.Y. Oct. 23, 2014).

Aereo has since declared bankruptcy in the Southern District of New York, Docket No. 1:14-BK-13200 .

The legal future of over-the-top video providers is uncertain but consumer demand has been growing. Federal Communications Commission officials have discussed allowing OTT companies to attain status as “multichannel video programming distributors” (MVPDs). During a recent speech, FCC Chairman Tom Wheeler referenced plans to give OTT providers access to the same content rights as traditional pay-TV companies and the FCC has already released a Notice of Proposed Rulemaking (NPRM) on the topic in December of 2014. 29 F.C.C.R. 15995.