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Court Says No to Network DVR

Cablevision's campaign to use large servers at its headends to provide digital video recording (DVR) functionality to customers, instead of installing expensive DVR set-tops, suffered a serious blow Thursday when a U.S. District Court judge in New York ruled against Cablevision in a copyright suit regarding the proposed service.

The idea of so-called "network DVR" functionality has been batted around for years by video server vendors and cable operators as a way to provide time-shifting features to consumers without incurring the significant capital expense of installing disk-drive-equipped set-tops in subscribers' homes. The basis premise is that a large centralized server, sitting at a cable headend, could act like a giant DVR to hundreds, even thousands, of customers who could each record and access programming via their cable remotes. While the network DVR concept has technical and financial appeal, it has been slow to take off due to concerns that cable operators would be guilty of copyright infringement by directly controlling equipment on their premises that could record and timeshift programming.

In March 2006, Cablevision became the first operator to test the copyright waters by announcing it would launch a "Remote-Storage DVR System" in its suburban New York systems. The cable operator's announcement was quickly followed by a lawsuit against Cablevision filed by various content providers and networks including Cartoon Network, CNN, TNT, Twentieth Century Fox, Universal Studios, Paramount Pictures, Disney, CBS and NBC claiming that such a service would constitute copyright infringement. Cablevision filed a counterclaim, asserting that such a network DVR service would be no different from a traditional video-cassette recorder or DVR in its functionality and citing the original Betamax ruling from "Sony Corp. v. Universal Studios" in 1984.

In his ruling, Judge Denny Chin of the United States District Court, Southern District of New York, agreed with the programmers' position, ruling in favor of the plaintiffs, dismissing Cablevision's counterclaim with prejudice, and enjoining Cablevision from launching any type of network DVR service. He will also award legal costs to the plaintiffs.

"I hold, as a matter of law, that Cablevision would engage in public performance of plaintiffs' copyrighted works in operating its proposed RS-DVR service, thereby infringing plaintiffs' exclusive rights under the Copyright Act," Chin declared in his ruling. "Summary judgment is granted in favor of plaintiffs in this respect as well. Absent the appropriate licenses, Cablevision is hereby enjoined from engaging in such public performance."

For its part, Cablevision said that it was still weighing its options and would continue to deploy conventional DVR set-tops, adding that it has rolled out some 500,000 of the devices to date.

"We are disappointed by the judge's decision, and continue to believe that remote-storage DVRs are consistent with copyright law and offer compelling benefits for consumers - including lower costs and broader availability of this popular technology," said the company in a statement. "We are currently reviewing the opinion and assessing all of our options, including an appeal, while we continue to deploy conventional set-top box DVRs."