It rocked broadcasters’ world several weeks ago when a court sided with Barry Diller and Aereo in their fight over what constitutes retransmission of a TV station signal.
Last week, the stars appeared to be aligning more in broadcasters’ favor with another court decision. The 2nd Circuit Court of Appeals—the same court that came to the defense of broadcasters on indecency in throwing out the fine against ABC’s NYPD Blue and ruling that the FCC’s policy was unconstitutional—backed broadcasters on the content-protection front last week. In a lengthy opinion, it upheld a lower court injunction against Ivi, which had launched a service in 2010 to stream TV station signals without negotiating for the privilege, as must cable and satellite operators.
In explaining why broadcasters would be harmed if Ivi were allowed to continue to distribute their programming without permission, the court gave a shout-out for the medium that the National Association of Broadcasters should have cross-stitched on samplers suitable for framing to hang on the walls of FCC regulators preparing to determine their fate—the FCC is expected next month to propose rules of the road for auctions of reclaimed broadcast spectrum.
The plaintiff’s television programming “provides a valuable service to the public, including [among other things] educational, historic and cultural programming; entertainment; an important source of local news critical for an informed electorate; and exposure to the arts,” the court said in its ruling.
The court was very clear about whether Ivi should be allowed to retransmit under the compulsory license, which Congress recognized is a narrow exception to copyright protections of content. “Congress did not…intend for [the] compulsory license to extend to Internet transmission,” the court said in upholding the injunction.
Ivi has asserted that it is covered by the compulsory license when it comes to retransmission but is not subject to FCC must-carry retrans rules because it is an Internet-delivered service.
The court did not address the retrans issue—it does not need to decide that Ivi lacks the compulsory license. But the proliferation of over-the-top services and their efforts to transmit/retransmit/facilitate TV signal distribution cries out for some clarification from the FCC.
The commission has tentatively concluded that without a transmission path—copper, fiber, satellite signals—an OTT provider is not analogous to a cable or satellite company and thus is not subject to the same rights—access to programming, primarily— or obligations, like carriage rules, must-carry/retrans regs and PEG channels. The FCC did some spadework in that direction when it put online access conditions in the NBCU merger. But before it decides a program-access complaint filed by OTT provider Sky Angel, the agency wants input on whether that preliminary call is the right one or, with the rise of broadband video, it needs to rethink that definition.
It is a tough call that has serious implications whichever way the FCC goes, but it is one the FCC needs to make, though more appropriately in a separate proceeding. One thing needs no more clarification: Broadcasters should be compensated for any retransmission of the valuable programming they continue to provide to an audience of millions.
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