Cablevision's New Network DVR On Ice

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New York — Cablevision Systems will have to keep its planned in-network video recording system on ice — probably for many months — before it finds out whether it is deemed legal.

The judge presiding over the copyright-infringement case against the Bethpage, N.Y.-based cable operator did not issue a ruling at a summary-judgment hearing here last week. Eight television-content producers and distributors, including 20th Century Fox and CBS Broadcasting, are attempting to block the service's launch.

A decision by Judge Denny Chin of the U.S. District Court for the Southern District of New York about whether to rule in favor of the defendants or the plaintiffs, or to send the case to trial, could come within a few days or take up to several weeks. Even when a ruling is handed down, the case is likely to be appealed by the losing side, legal experts have said.

In hearings in Manhattan on Oct. 31 and Nov. 1, Chin posed detailed questions to both sides with equal skepticism.

'MORE THAN A MACHINE'

Near the end of the second day's hearing, he challenged Cablevision's claim that the service — referred to as “RS-DVR,” for “remote storage-digital video recorder” — is exactly like a conventional digital recorder that sits in a consumer's home and, for all practical purposes, is controlled directly by that individual.

“It's more than just a machine,” he countered. “You're talking about an ongoing relationship … based on a monthly fee. We're talking about a lot more than just a box on top of a television set.”

The content providers, which filed suit against Cablevision in May, allege that the operator's planned network-based DVR service misappropriates TV programming by generating a second, unauthorized stream of content that would be stored on Cablevision-controlled servers.

The plaintiffs' lawyers contended that the RS-DVR would be tantamount to a massive video-on-demand service that should be covered under separately negotiated licenses.

“Cablevision wants to double-dip,” said Bob Garrett, an attorney with law firm Arnold & Porter, representing the plaintiffs. A compulsory license, he told the court, “does not allow cable operators to deliver programming anytime they please.”

LEANING ON BETAMAX

Cablevision's lawyers argued that RS-DVR is no different than conventional set-top DVRs, which allow subscribers to automatically record and then play back any programming they receive over a cable system. That is a fair use of copyrighted material under U.S. laws, according to the MSO. Each RS-DVR subscriber would be allocated a separate, 160-Gigabyte physical disk to store programs to be viewed later.

“All we're doing is facilitating the customer's fair use,” said John C. Englander of law firm Goodwin Proctor, representing Cablevision.

Englander also noted that programmers haven't challenged the legality of conventional DVRs. No specific legal precedent has established whether DVRs facilitate copyright infringement. Cablevision cited the 1984 Sony Betamax case, in which the U.S. Supreme Court found the consumer-electronics maker not liable for creating a device that enabled copyright infringement.

The planned Cablevision RS-DVR system is based on video-on-demand systems from Arroyo Video Solutions (now part of Cisco Systems). Cablevision has not rolled out RS-DVR commercially. Earlier this year, it initiated a technical trial of the service in Woodbury, N.Y., with two Arroyo servers, each of which is capable of serving 96 subscribers.

One of the programmers' key points was that components of the RS-DVR system start processing the aggregated programming stream, the collection of 170 linear channels Cablevision normally sends over its network, before a subscriber requests anything. Therefore, according to the plaintiffs, Cablevision — not its customers — is actively copying material without authorization.

Cablevision countered that no program is recorded to disk unless a subscriber says so, and any programming content buffered by the RS-DVR system is stored briefly, for no more than 1.2 seconds. Such “transitory” storage is specifically exempt from claims of copyright infringement under federal copyright code.

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