Public Knowledge has frequently taken aim at cable operators over network management issues. But the group is squarely in Cablevision's corner when it comes to legal wrangling over the operator's plans to roll out a headend-based digital video recorder service. The U.S. Supreme Court is awaiting advice from the solicitor general on whether or not to hear content creators' - studios and programmers - appeal of an earlier ruling that found Cablevision's plan to provide DVR functionality in centralized servers does not violate copying and performance restrictions in copyright law. The studios say that fundamentally distorts copyright law. Cablevision, meanwhile, has yet to roll out the service. Public Knowledge president Gigi Sohn wants the last decision to stand, enabling Cablevision to roll out the "cool, consumer-friendly technology" and reinforcing fair-use rights established in the Sony Betamax case over video cassette recording. She spoke with Multichannel News senior Washington editor John Eggerton about the issue.
MCN: Could you briefly explain the case?
Gigi Sohn: Cablevision has a remote storage digital video recorder service which is just like a TiVo or any other DVR except there is no hard drive. The copies of the shows are stored on Cablevision servers. But for all intents and purposes it operates like a TiVo. You use your remote controls to pick what programs you want to record, you record those programs and you play them back But you don't have a box with an expensive hard drive.
The studios and some cable networks sued for copyright infringement based on three theories. They said the little, temporary buffer copy that it made before digital transmission violated the right of reproduction. The fact that the copy of the show resided on the server was also a violation of reproduction rights, they argued. And third, they said that when Cablevision provides the recorded show violates the right of public performance.
MCN: So why wouldn't that violate the public performance restrictions. A cable operators has to get a separate right for VOD, doesn't it?
GS: Yes, but the court differentiated between VOD and this because for video on demand, the cable operator makes certain movies available. The consumer isn't the one doing the choosing. In that situation it is the cable operator who chooses what library of shows will be available to the consumer. With the DVR, the only choosing the cable system does is what networks to put on its system. It doesn't choose the programming available for the DVR. You choose that. That is the big differentiation.
MCN: But in the original lower court decision, which went against Cablevision, the judge saw it differently?
GS: Yes, he basically looked under the hood of these technologies and said they were more like video on demand and less like the TiVo. It is really Cablevision that is making the copy. But the Second Circuit [U.S. Court of Appeals] reversed on all grounds, finding that the buffer copy is temporary and that in order to violate the copyright it had to be more than transitory duration. The Second Circuit determined that the customer is doing the copying and, on public performance, that Cablevision was only providing the show to one person. The studios had said you had to look at the potential audience for the work. So if it went to more than one person, it was a public performance.
MCN: Where does the case stand now?
GS: The studios sought Supreme Court review, but we don't think this is a case that is worthy of the Supreme Court taking for a variety of reasons. Number one, there is no conflict in the circuit. It is also a very narrow decision. It is only about one cable remote DVR technology. Conversely, if the case were reversed there could be some serious damage done to technology.
The Second Circuit crafted a narrow decision and left a lot of doors open. For instance, they left the door open if companies wanted to assert contributory liability, saying that maybe Cablevision was inducing infringement. I don't think they would win, but the point is they didn't decide that. They frankly took pains, maybe in a way I might not have done if I was one of the judges, to make this as narrowly construed as possible.
MCN: What serious damage would result if the Supreme Court reversed the appeal decision and found for the studios?
GS:Every time you make a digital copy of anything, an audio stream, a video stream, you have to make a buffer copy first. Can you imagine what that would do to the cost of digital transmission or to the consumer if you had to pay a licensing fee? Think about cloud computing. If all remote storage is a copy and the host is liable, cloud computing is dead.
MCN: So how did the Solicitor General become involved?
GS: The court asked the Solicitor General to give his opinion about the case. She is planning on filing at the end of this month with an opinion on whether this case should be taken or not.
MCN: So what has been going on for the past few months is both sides have been trying to convince the Solicitor General by enlisting various and sundry agencies to weigh in on their behalf. Lobbying is the wrong word, but there has been a lot of advocacy in the relevant agencies. Who is on the side of Cablevision and Public Knowledge?
GS: Let's not put it that way. I'll tell you who is on the side so far of the Solicitor General telling the court not to take the case. The White House and the FCC.
On the other side so far [are] the Patent and Trademark Office and the Copyright Office. The civil division of the Justice Department has not weighed in yet. I don't know whether one agency has more weight than another. Both the parties, Cablevision and the studios/cable networks, if they haven't already met with the Solicitor General or assistant Solicitor general, will be doing so.
MCN: You have historically been concerned about concentration of control with cable operators. Is there no concern about Cablevision controlling content on its centralized servers?
GS: I'm more concerned about the concentration of control of copyrights and that a handful of powerful copyright holders are trying to sue a cool, consumer-friendly technology out of existence. If I want to try to convince the antitrust department of the Justice Department is that the competition concern is more than copyright.
MCN: But if it is easier or cheaper for Cablevision to provide this service, aren't they getting an extra, commercial, benefit from using copyrighted material in this way? The studios argue the technology is "fundamentally distorting" copyright laws?
GS: I would say it is the exact opposite. The Sony case is now 25 years old. And the Sony case says it is fair use to record a program for later viewing. Tell me how this is any different from a VCR.
MCN: Cablevision doesn't get a benefit if I buy a VCR and record, but if they provide me a service that is faster and cheaper, that is a value added for me?
GS: You have to look at my rights as a viewer. It doesn't matter whether Cablevision is getting some money out of it. The argument that the studios made in the Sony case is that Sony is making money off of my copyright. Here, instead of the hardware company making money you have the software company making money. It is my right to record that is really being affected here.
MCN: Cablevision won't pin the delay in its rollout of the service on this case. What do you think?
GS: Of course it is about this case. If, God forbid, this case is reversed, they are liable for what could be millions if not billions of dollars. Every single work under the copyright law you can be liable for damages of up to $150,000 in infringement. If they willingly continued to run this service and were found to be in violation of copyright laws it would bankrupt Cablevision. It would probably bankrupt Time Warner and Comcast. You would be insane to take that risk.
Copyright is a strict liability law. There is no such thing as a person who thought they were acting legally. If you violate copyright laws, it doesn't matter what your intentions were, you will be punished with very large damages.