Cablevision: No Response Yet to Network-DVR Ruling

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New York -- Cablevision Systems chief operating officer Tom Rutledge said Wednesday that he had not had yet evaluated whether to appeal the ruling last week of a federal judge that is blocking his company from deploying technology that would record television shows inside a cable network at the request of individual subscribers.

Rutledge said he had not yet delved into the ruling and had not had a chance to determine what Cablevision’s next step might be. He added that he had just returned from a vacation in time to speak at the 2007 Bank of America Media, Telecommunications and Entertainment Conference at the New York Palace Hotel here Wednesday morning.

His comments about the preparation of Cablevision’s response to the ruling came after his remarks to investors at the conference.

During his on-stage comments, he noted that a service that records shows on servers inside a network, instead of hard drives in set-top boxes inside a customer’s home, would reduce the company’s capital expenditures over time.

Giving customers blocks of space on remote-storage servers means simpler set-top boxes can be deployed in households that control digital content and services sent through the network and managed centrally.

Conventional set-top boxes that include digital-video-recording drives can cost about $300 each. Storing programming on a remote server could cost the cable company less than $100 per customer, according to Envisioneering Group director Richard Doherty.

Rutledge’s comments came almost exactly one year after he first discussed Cablevision’s plans to deploy a network-based DVR system to replace home DVRs at the 2006 edition of this investor conference. And they came six days after U.S. District Judge Denny Chin ruled in favor of TV programmers, who had argued that the cable operator’s system would be in violation of licensing agreements governing their works.

Chin ruled that a remote-storage DVR would allow Cablevision and its customers to engage “in unauthorized reproductions and transmissions of plaintiffs’ copyrighted programs.”

“The RS-DVR is not a stand-alone machine that sits on top of a television,” Chin wrote. “Rather, it is a complex system that involves an ongoing relationship between Cablevision and its customers, payment of monthly fees by the customers to Cablevision, ownership of the equipment remaining with Cablevision, the use of numerous computers and other equipment located in Cablevision’s private facilities and the ongoing maintenance of the system by Cablevision personnel.”

Programmers including 20th Century Fox Film, Universal City Studios, Paramount Pictures, Disney Enterprises, CBS, ABC, NBC Studios and Turner Broadcasting System’s Cartoon Network and CNN filed suit last year in U.S. District Court for the Southern District of New York to block the service.

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