Mark it as a victory for broadcast TV. On February 22, 2011, U.S. District Judge Naomi Buchwald of New York’s Southern District granted a preliminary injunction against ivi, Inc., blocking its online TV-streaming. The Seattle-based company started drawing attention last September when it began selling live streaming of TV broadcasts over the internet for $4.99 per month. After receiving several cease-and-desist letters from broadcasters, ivi filed a lawsuit in Washington District Court, asking for a declaration that its actions did not constitute infringement of network copyrights. The lawsuit was dismissed, and shortly thereafter the current suit was filed by a number of plaintiffs, including NBC, ABC, CBS, Fox, and, yes, even PBS. They claim that ivi is stealing the networks’ copyrighted material and siphoning viewers away from TV sets (and the associated commercials). On the other side, some public interest groups, including the Electronic Frontier Foundation, have spoken in support of competition created by ivi.
In granting the injunction, Judge Buchwald indicated that the plaintiffs had demonstrated the likelihood of both the success of their claims and the irreparable harm to them that can only be avoided by shutting ivi down. She rejected the claim by ivi that the company qualifies as a cable system under the Copyright Act. Cable companies that pay approximately $100 each year to the U.S. Copyright Office are allowed to rebroadcast TV signals without acquiring permission from the networks.
Judge Buchwald’s main problem with this argument seemed to be ivi’s contention that while it is a cable system under the Copyright Act, entitling it to rebroadcast, it is not a cable system in regard to possible regulation by the FCC. When stated like that, ivi’s position does appear tenuous. Ivi Chief Executive Todd Weaver responded, saying that the judge mistakenly confused copyright and communication law (update at the bottom of this article). ivi’s website has acknowledged the injunction and suspended services, but also indicates that the company will appeal the ruling.
Although I can’t claim to be familiar with the TV rebroadcasting laws, it does seem like an exception allowing cable companies to show network programming is designed for local cable providers and not national (or international) streaming on the internet. Otherwise, as the judge has suggested, anyone with an internet connection can call themselves a cable operator and rebroadcast TV at will. At the same time, nobody likes having to go through the stupid cable companies to get programming, and more options are almost always a good thing, right? But Hulu is able to do a pretty good job of offering alternatives without being shut down by court order. I’m just not convinced that taking someone else’s signal without permission is a practice that we want to endorse.
On a final note, as Dave Taylor points out, the ivi End User License Agreement includes a clause that customers agree to let ivi access users’ computers and bandwidth to transmit to other customers. Specifically, the EULA authorizes ivi to “utilize the processor, bandwidth and hard drive (or other memory or storage hardware) and/or cache of your computer (or other applicable device) for the limited purpose of facilitating the communication between, and the transmittal of data, content, programming, services or features to, you and other Service users, and to facilitate the operation of the network of computers running instances of the Service.” Thus, each customer who uses the service is offering their own system to facilitate further transmission of copyrighted material, which is worrisome to say the least. Even if ivi is eventually found to have infringed the network copyrights, I don’t think it’s likely that anyone is coming after individual ivi customers, but that doesn’t mean I want to unknowingly participate in illegal activity. If nothing else, this serves as a good example of “user beware,” and a reminder that EULAs should not be ignored.
