Dueling spins on the Cablevision ruling
The Supreme Court left intact the U.S. 2nd Circuit Court of Appeals' ruling in favor of Cablevision's network DVR service, a move that almost certainly will lead more cable operators to offer TiVo-like services without putting recorders in their subscribers' homes. Advocates on both sides raced to put their own spin on the court's decision, which the justices issued sans comment. Here are two typical ones: Gary Shapiro, head of the Consumer Electronics Assn., said the decision was important to innovation in remote computing and data storage, such as Google's online applications and Apple's .Mac (now called MobileMe) service. Patrick Ross, executive director of the Copyright Alliance, countered that the decision "is unfortunate and potentially harmful to creators and creative enterprises across the spectrum of copyright industries."
But as the Justice Department noted in its brief, which urged the justices not to take up the case, the 2nd Circuit's ruling may not have much bearing on other companies' services.
That's because the appeals panel took pains to wrap its decision as tightly as it could around the specifics of Cablevision's offering. In essence, the court said that, on the sole issue of direct copyright infringement, there was no difference legally between a digitized VCR in the home and a TV recording service that replicated those features at the cable operator's central office. In either case, the appeals panel said, Cablevision isn't making the recordings -- its customers are, through the commands they send with their remote controls. Nor does its technology, which makes a recording available only to the subscriber who set it up, turn the kind of time-shifting that the Supreme Court blessed in the 1984 Betamax decision into an infringing "public performance." The court didn't address any claims of contributory or vicarious infringement against Cablevision, or any fair-use defenses, because the parties agreed not to raise them.
That's not to say the ruling isn't important. Had the Supreme Court established the principle that a recording service has less protection against copyright lawsuits than a recording device, it would have been a clear blow to the Web 2.0 model for entertainment. But Cablevision's approach, which involves making a separate copy for each viewer who wants to record a program, is hardly the most efficient way to deliver TV programming. Nor is it a good substitute for a true on-demand TV service, given that its customers have to set up a recording ahead of time if they want to be able to watch a program after it airs. So I don't see how the ruling poses any greater threat to the entertainment industry than TiVo and its ilk already do. On the contrary, a network-based system might reduce commercial skipping by making it easier for cable operators to insert timely, targeted ads that viewers actually want to watch.
I can conjure up some online music services that might look at the 2nd Circuit's ruling as a license to evade some of the limits imposed by the Digital Millennium Copyright Act or to avoid paying royalties. One might be a service that let users record webcasts to online music lockers, then play songs from that locker on demand for free -- on the theory that people can record and time-shift webcasts on their home PCs, therefore they should be able to do the same through the Web without running afoul of the songs' public-performance copyrights or the playlist limits in the DMCA. But such an offering would almost certainly raise issues not addressed in the Cablevision case. Besides, the entertainment industry seems eager for another crack at the topic of network-based services. As Ross put it, "We will monitor the ramifications of this decision and continue pushing for policy and legal outcomes that maintain creators’ incentives.” In the meantime, Hollywood might actually try to work with Cablevision on ways to make TV advertising less of an intrusion and more of a welcome visitor.
-- Jon Healey