Jubilant in the wake of a U.S. District Court ruling which found that FilmOn X can be considered a cable company, CEO Alki David took time to gloat about the OTT provider's victory, taking a jab at both broadcasters and defunct over-the-air streaming service Aereo.
"In the FCC's proposed rule changes, FilmOn is cited as falling within both the Video On Demand sector, with YouTube and Netflix, and the Live Streaming sector alongside Sky Angel and that defunct bit of roadkill, Aereo," David said in a statement released to the media. "It is the only company with both designations and we were the only company to lobby for that. It is important to stress that FilmOn worked hard with the FCC to insure that the reform it enacts is truly meaningful. No other company was fighting to quantify online operations as true cable offerings."
In the decision for FilmOn, Judge George Wu of the U.S. District Court for the Central District of California ruled that the OTT service, which streams linear broadcast channels in an over-the-top manner similar to Aereo, should be considered an MVPD (multichannel video programming distributor). That entitles FilmOn, like any cable operator, to a compulsory license to retransmit broadcasters' signals under Section 111 of the Copyright Act.
The service won't be seeing any license agreements immediately, though. An injunction won earlier against FilmOn X by broadcasters including ABC, CBS, NBC and Fox is still in effect, pending the outcome of an appeal.
Fox Broadcasting said it will appeal the ruling, stating that "This advisory opinion contravenes all legal precedent," and that it does not believe FilmOn X could possibly qualify for a compulsory license. Judge Wu said Fox's appeal can be filed immediately in the Ninth Circuit Court of Appeals.
David called Fox's statements "reactionary," adding, "stop polishing the brass on the decks of the Titanic. The status quo is outdated and broken. It's time to update the paradigm."
While known for his brash--some say abrasive--personality, and for thumbing his nose at broadcasters even as injunctions have been handed down, Alki David and FilmOn are hardly out of the woods at this point.
The Circuit Court win came as a result of Aereo's defense of its service to the Supreme Court. In that decision, the high court ruled that Aereo was violating broadcaster copyrights because its service was basically the same as that of a cable system, or MVPD. FilmOn was able to use that ruling in this latest case, with Wu agreeing that federal copyright law doesn't distinguish between MVPDs and linear OTT services, Variety reports.
However, as Fox pointed out, that alone is no guarantee that FilmOn X is entitled to a license to retransmit broadcasters' signals. The FCC is still studying whether services like FilmOn should be treated as MVPDs and haven't issued rules to address the issue.
Another point to keep in mind: Aereo won nearly all of its court battles against broadcasters, ultimately losing on the issue of copyright. Like that pioneering linear OTA service, FilmOn is going up against the very deep pockets of a well-funded, entrenched industry segment.
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