High Court Ponders Network DVR Case

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Cablevision Systems' network digital video recorder, which has been in a holding pattern since 2006, was hit with another potentially months-long legal delay last week.

The U.S. Supreme Court asked the Department of Justice to submit a brief reviewing an appeal by entertainment companies of a lower court's ruling that would allow Cablevision to legally deploy a network-based DVR service.

The Supreme Court asked the DOJ's Office of the Solicitor General to file a brief expressing the views of the federal government. The office supervises and conducts litigation with the high court on behalf of the government.

It could be several months before the requested brief is filed. For one thing, the incoming Obama administration's pick for U.S. attorney general, Eric Holder, had not cleared Senate confirmation as of press time.

Cablevision declined to comment.

The high court is considering a request by broadcasters, movie studios, sports leagues and others to review a ruling by the 2nd U.S. Circuit Court of Appeals, which reversed a previous finding that the MSO's remote-storage DVR, or RS-DVR, violated copyright laws.

The case could have far-reaching implications — considering the legality of not just network DVRs, but traditional DVRs as well, according to Citigroup media analyst Jason Bazinet. Whichever way the wind blows, though, the outcomes appear to be positive for cable, he wrote in a research note last week.

“Even a ban on all DVR holds silver linings for cable as video-on-demand (once again) becomes differentiated service offering vis-à-vis DBS,” Bazinet said.

He expects the Supreme Court to “reach clarity on scope and timing” of the Cablevision DVR case by the end 2009.

Turner Broadcasting System, ABC, CBS, NBC, 20th Century Fox, Paramount Pictures and Disney Enterprises sued Cablevision in 2006, accusing the cable company of directly infringing their copyrights with the RS-DVR, which has never been offered to consumers.

Chief Justice John Roberts and Justice Samuel Alito are not taking part in considering the case, according to the Supreme Court docket. Such recusals typically happen if a justice owns shares in one of the companies involved in a case.

Cablevision, in a Supreme Court filing in December, said its network DVR service involves “lawful consumer copying” that “does not allow consumers to do anything they cannot already lawfully do with other devices.”

In November, more than a dozen media companies, sports leagues and organizations filed amicus (“friend of the court”) briefs in support of the plaintiffs in the case.

A brief filed by MGM, Major League Baseball, the National Football League, the National Collegiate Athletic Association and others argued that allowing Cablevision to deliver programming for a separate RS-DVR fee “contravenes clear congressional intent” with respect to the cable compulsory licensing plan of the 1976 Copyright Act requiring simultaneous retransmission.

In its Dec. 5 response, Cablevision argued that “nothing in the Copyright Act gives authors the right to demand royalties from every business that merely enables lawful fair use of their works.”

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