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Court of Appeals Says Network DVRs Don’t Infringe Copyrights
Sunday, August 3rd, 2008 at 4:00 PM - by John Martellaro
A U.S. Court of appeals has ruled that Cablevision can, in fact, offer DVRs in the cloud, eliminating the hardware necessary in the viewers homes. That technology, strongly opposed by the media companies, removes a significant cost and hardware burden for the cable companies and also gives them a competitive advantage against satellite providers. The case may go to the Supreme Court.
The U.S. Court of Appeals, 2nd Circuit, said that the so-called network DVRs do not infringe the copyrights of the plaintiffs, including Hollywood studios who sued the cable operator. It can simply be viewed as a traditional DVR on a very long wire.
A network DVR essentially removes the hard disk from the users living room and supplies equivalent capability electronically in the cable companys computers. Because it requires a direct connection, satellite carriers cant provide that service.
"This is a tremendous victory for consumers, which will allow us to make DVRs available to many more people, faster and less expensively than would otherwise be possible," said Cablevision COO Tom Rutledge in the Multichannel news story. "We appreciate the Courts perspective that, from the standpoint of existing copyright law, remote-storage DVRs are the same as the traditional DVRs that are in use today,"
Craig Moffett, an analyst with Berstein Research, said in a note to investors that Cablevisons technology avoids direct liability for copyright infringement. It also makes it possible to provide a virtual DVR to every cable subscriber with much simpler hardware. That, in turn, could result in a surge in DVR use as well as more pervasive ad skipping.
Mr. Moffett noted that the plaintiffs would have been wise to agree to network DVRs, but stipulate that that those DVRs couldnt skip ads.
Even so, with the facilities of the DVR in the hands of the cable companys computers, a time could still come when the customers will lose their options and ability to skip ads they dont wish to view. Thats a tradeoff many will have to make for perhaps a cheaper monthly bill, and some customers will likely opt to keep the power of that hardware DVR in their own living room for some time to come.
If the U.S. Supreme Court sees it differently than the Appeals Court, then its back to business as usual. However, if the Supreme Court agrees, some cable customers might then be faced with the eventual need to appeal to the cable company to let them operate their own TiVo if they wish to do so, and that could lead to a whole new battle over viewers rights.
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