Hot Docs: Appeals court: Cable TV can’t be streamed live over the Internet

August 30, 2012

Cable TV on InternetHave you ever wondered why you can’t watch cable TV over the Internet?

The Second Circuit Court of Appeals just ruled on a case that answers that very question.

The case is WPIX, Inc. v. ivi, Inc.

ivi is (or, I should say, ”was”) a service that provided live streaming TV over the Internet for a flat monthly fee.

WPIX, a TV station in New York City, is only one of the many, many plaintiffs (with some of the others being broadcasters and media companies such as ABC, CBS, NBC, Disney, Universal, the Office of the Commissioner of Baseball, Cox Media, and Twentieth Century Fox).

Those plaintiffs sued ivi for streaming their copyrighted TV programming over the Internet live and without their consent, and moved for a preliminary injunction, which was granted by the district court.

This appeals court ruling is the result of ivi’s appeal of that injunction.

And this brings us to the reasons why you can’t watch cable TV over the Internet.

The first has to do with the legal framework currently in place.

Under § 111 of the Copyright Act of 1976, “cable systems” are permitted to rebroadcast “primary transmissions” sent by broadcast stations licensed by the Federal Communications Commission (FCC) under compulsory licensing.

Compulsory licensing is a system set up by law that allows individuals and companies to obtain a license for a copyright-protected work without the consent of the work’s owner by paying a preset royalty.

Being entitled to use of the compulsory licensing scheme is very advantageous, since it provides an alternative to negotiating individual licenses with copyright owners (usually at higher prices).

ivi claims that it is a “cable system” under § 111, and thus entitled to compulsory licensing for the content that it rebroadcasts.

The plaintiffs argue otherwise, which makes the case completely determinative on the definition of “cable system” and whether it applies to a service that streams live TV programming over the Internet.

Hot Doc: WPIX Inc. v. ivi Inc.

Source: Thomson Reuters News & Insight – National Litigation

The appeals court first looked at the statutory definition of “cable system,” which is a U.S. “facility” that receives TV broadcast signals and retransmits “such signals or programs by wires, cables, microwave, or other communications channels to subscribing members of the public who pay for such service.”

Kind of seems like ivi fits the bill, doesn’t it?

However, the appeals court believes that live TV retransmissions over the Internet would “destabilize the entire industry,” so it obviously couldn’t well rule in ivi’s favor, could it?

So it went on to look at statements by the U.S. Copyright Office, which has repeatedly stated that it opposes “an Internet statutory license that would permit any website on the Internet to retransmit television programming without the consent of the copyright owner.”

Despite the fact that the Copyright Office has no authority to promulgate rules carrying the force of law, the court relied on the Office’s opinion heavily in reaching its conclusion: that the injunction against ivi must be upheld.

And the appeals court’s motivation in making this ruling brings up the second reason why you can’t watch cable TV over the Internet: the impenetrable barriers to market entry.

Consider the two sides in opposition in this case:

On one side, there’s a cartel of media industry powerhouses that are collectively worth hundreds of billions if not trillions of dollars.

On the other, a lone startup company that faced threats of legal action after it launched.

ivi is unique not only because it tried to bring live cable TV to the Internet, but because it would have virtually been the only “cable system” in the U.S. not owned by or affiliated with one of the members of the plaintiffs.

As the SOPA/PIPA debacle demonstrated, these media companies have Congress under their collective thumb.

If this ruling is of any indication, the same can be said of the courts.

It’s not 1976 and media powers are far more consolidated and organized, so it’s highly unlikely that we’ll be seeing an expansion of compulsory licensing anytime soon.

Despite the appeals court’s insistence otherwise, this situation greatly injures the public’s interest in the widespread availability of and access to broadcast media.