Court Says No to ivi’s Broadband TV Service

Ivi’s $4.99 broadband-delivered pay TV service for local stations must stay off, an appeals court has ruled. The ivi service captured over-the-air TV broadcast signals in Seattle, New York, Chicago and Los Angeles and delivered them via a broadband connection to connected PCs. The court ruled that ivi is not protected just because it was paying a fee to the US Copyright Office.

A New York court originally ruled against ivi in February 2011, saying that ivi did not qualify as a “cable system.”

Pay TV companies do not want ivi to succeed because it delivers local stations’ broadcasts for a low monthly fee. Consumers are surprised when they see how many local channels they can get. Each local station broadcasts two to three channels and with a roof top antenna, consumers can get stations they could not have back in the days of analog broadcasts.

Pay TV companies pay local stations lucrative retransmission fees from for the rights to distribute their content. Broadcasters don’t want to lose those feeds and pay TV companies don’t want to lose local stations and their national networks — ABC, Fox, NBC and CBS — although consumers could get them for free with an antenna.

Ivi CEO Todd Weaver’s argument is that ivi could operate without paying those fees and that ivi was not violating copyright rules because it was paying $100 per year to the Copyright Office for a compulsory license.

In its ruling, the US Court of Appeals for the Second District confirmed the lower court’s ruling that compulsory licenses were intended for localized redistribution and that ivi’s Internet distribution is too broad for that copy protection.

A similar service called Aereo tries to get around the restriction by using one thumb-sized antenna assigned to each subscriber. Operating so far only in New York City, it’s like a long antenna cable. In fact, Aereo says it’s charging for the infrastructure, not the content. Aereo keeps its service local by selling only to people that live in an area where an antenna at the subscriber’s residence could, without interference from buildings, receive the local stations’ broadcasts for free.

Recently Aereo said that it’s acting in the public interest by allowing people in New York City to access its platform for free for an hour per day.

Despite all of that, the local stations are suing. They do not want to lose their retransmission fees and the pay TV services are doing the cheerleading because they do not want to lose exclusive rights to the broadcasts.

The one issue that no one has seemed to address is that its US citizens, operating through the US government, have given local stations free spectrum to make billions. If they want the pay TV companies to pay them retransmission fees, they should be made to pay taxpayers via the government fees for the spectrum they have been using for free.

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