The broadcasters again have won--or at least made their point: The Second Circuit Court of Appeals has said that a preliminary injunction against upstart streaming service ivi is correct and that "retransmission of copyrighted television programming over the Internet without (broadcaster) consent would...threaten to destabilize the whole (broadcast) industry."
For IPTV operators, that means that broadcasters will continue to wield a sometimes heavy hammer to demand retransmission consent fees or shut down their transmissions.
The crux of the litigation--and the appeal--was whether ivi was a "cable service" and whether Internet transmissions can be construed as cable transmissions. In this instance, the appeals court agreed with a decision from the U.S. District Court for the Southern District of New York that ivi is not a cable service and that "the district court did not abuse its discretion in granting a preliminary injunction to plaintiffs and the judgment of the district court is affirmed."
The decision was, of course, hailed by Dennis Wharton, a spokesman for the NAB, who issued a statement saying: "This confirms that Congress never intended to allow Internet providers to retransmit broadcast programming without the consent of copyright owners."
Also expressing pleasure were ABC, NBC, CBS and Fox which issued a statement saying that they were "very pleased that the court recognized that ivi's unauthorized streaming of our copyrighted content would substantially diminish the value of television programming," a story in Broadcasting & Cable reported.
Much of the court's argument revolved around how much damage live retransmission of broadcast signals over the Internet--versus delayed retransmission such as Hulu, which waits a specified period of time after the programming has been shown over-the-air and on cable, satellite and IPTV platforms--would do to broadcasters' advertising base.
"Plaintiffs argue--persuasively--that advertisers pay substantial fees to target specific audiences; such fees are often determined by the number of viewers and their demographic profiles. ivi's retransmission … over the Internet increases the number of Internet views, 'fragments,' and diverts the number of 'local viewers,'" the ruling held.
Also at stake in the ruling was the rights of broadcasters to demand compensation for service providers to carry content that they claim is copyrighted, even though that content is available "free" via over-the-air transmissions and antennas.
Retransmission fees have become a bigger piece of broadcaster revenue as multiple channels of programming have spread advertising dollars ever thinner.
"Retransmission consent is a substantial and growing revenue source for the television programming industry," the ruling maintained. "Plaintiffs obtain retransmission revenue by licensing the right to retransmit their copyrighted television programming to cable, satellite and telecommunications providers."
And therein, the court said, was the nugget of the case and the reason to uphold the injunction against ivi.
"It is simply not clear whether a service that retransmits television programming live and over the Internet constitutes a cable system," it ruled.
ivi has not updated its Web site's coverage of the issue since June and provided no immediate response to the ruling.
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