Federal court rules that Alki David's FilmOn should be treated as MVPD

A federal judge said that streaming company FilmOn X LLC should be treated as a cable company and have the right to negotiate licensing agreements with broadcasters.

Judge George W. Wu of the U.S. District Court for the Central District of California ruled that FilmOn is an MVPD and entitled to a compulsory license under Section 111 of the Copyright Act. Acknowledging the potential commercial impact of his decision, Wu also kept in place an injunction won by plaintiffs ABC, CBS, NBC and Fox against FilmOn, pending immediate appeal to the 9th U.S. Circuit Court of Appeals.

"The broadcasters have been trying to keep their foot on the throat of innovation," said FilmOn X's lawyer, Ryan Baker, in an interview with Reuters. "The court's decision today is a win for technology and for the American public."

In a statement, Fox Networks said it would appeal, and that Wu's opinion "contravenes all legal precedent."

Run by Alki David, the colorful Internet entrepreneur--and former actor and Coca-Cola lab analyst--FilmOn has a model similar to the legally vanquished Aereo. It streams broadcast TV to the IP devices of subscribers.

Aereo, of course, was handed a paralyzing decision by the U.S. Supreme Court in June 2014. The streaming company then tried to reclassify itself as an MVPD, and pay broadcasters for the rights to their signals. But a Manhattan federal court ruled in favor of broadcasters, ending that quest. Backed by media baron Barry Diller, Aereo has since been liquidated, with TiVo buying the bulk of its technology patents. 

In 2012, CBS Corp., Comcast's NBCUniversal, the Walt Disney Company's ABC and 21st Century Fox's Fox Networks filed two suits against FilmOn in the California federal court, arguing FilmOn was illegally obtaining their content.

They soon won an injunction against FilmOn. However, in his ruling, Wu wrote that "no matter how strong the policy arguments for treating traditional cable services and [FilmOn's] service differently" the law "simply does not draw the distinction plaintiffs urge."

The ruling comes as the FCC is weighing rule changes that would expand MVPD status to cover streaming media companies. 

For more:
read this Reuters story
read this Deadline Hollywood story
read this Hollywood Reporter story

Related articles:
Aereo gets OK from bankruptcy court to auction technology assets
Aereo, FilmOn hopes rise again as FCC moves to redefine MVPDs
FilmOn, Aereo laud FCC vote to explore MVPD reclassification

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