Cablevision to test network digital video recorder

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Cablevision to test network digital video recorder

March 27, 2006

By Kenneth Li, Reuters

NEW YORK - Cable operator Cablevision Systems Corp. said on Monday it plans to introduce a video recording service as early as this year that aims to replace the living room digital video recorder.

Digital video recorders made by such companies as Cisco Systems Inc.'s Scientific-Atlanta and TiVo Inc. allow subscribers to pause and rewind live television programs and store programs on hard drives included on their home set-top boxes. The Cablevision service, by contrast, will store such programs on its own systems.

Cablevision said the move is designed to cut the cost of installing and fixing digital video recorders, which are prone to malfunction.

It will operate over the existing cable systems through customers' current digital set top boxes. Though the company said it had not yet priced the service it expects cost-savings to be passed on to customers.

But it is unclear how programming networks, such as Viacom Inc.'s MTV or Time Warner Inc.'s CNN, will react to the move. They have bristled in the past at earlier cable industry plans to record shows on their systems before negotiating new broadcasting rights.

Cablevision Chief Operating Officer Tom Rutledge told Reuters the company had informed the networks of its plans.

"In every way, it's exactly the same product as (subscribers would) get with a physical hard disk digital video recorder," Rutledge said in an interview, defending the new service's legality.

Rutledge said nothing will be recorded on Cablevision's network unless the viewer orders it from the remote control -- a subtle but important difference from other failed experiments.

Earlier controversies had centered on Time Warner's Maestro service, which proposed to let viewers order up just about any show that had been previously broadcasted as the shows would have been automatically stored on its network without any prompting by viewers.

Cable networks argued that the Maestro infringed on their copyrights, unless Time Warner planned to pay networks more for the privilege.

Maestro never launched. Time Warner reworked the idea and has since created a service it calls "Startover", which lets viewers who miss parts of a live program to start from the beginning if the show is still in progress.

Cablevision's new service, called RS-DVR (remote-storage digital video recorder), will be tested in its Columbia, South Carolina, market for 60 days, and will require little more than a software download directly to set top boxes.

Cablevision said it is likely to introduce the service to its estimated 2.1 million digital cable subscribers later this year.

The Bethpage, Long Island-based Cablevision's founders are no stranger to new concepts or controversy. Cablevision founder and chairman Charles Dolan created the premium channel cable industry when he co-founded the first pay cable network HBO in the 1970s.

"We think we're going to win, to the extent there is a legal fight over this," David Ellen, a Cablevision lawyer said. "We need to clarify people's misconception over this."

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Cablevision Thinks Outside the Box

March 27, 2006

By Matt Stump, Multichannel News

Cablevision Systems Corp. is launching a ground-breaking technical trial Monday in which its subscribers will record TV shows and movies on servers on its network rather than on set-top boxes in their homes.

By shifting the recording to storage devices at its equipment headends, Cablevision will not have to invest in set-tops with hard drives for customers who want to record programs. Instead, every digital set-top automatically becomes a digital recorder.

The Bethpage, N.Y.-based operator will also never have to send out installers in trucks to set up, fix or replace recording equipment in customer homes. And eventually, it will be able to insert different ads for different viewers into recorded programs each time they are played back.

The trial is taking place in Cablevision’s home base of Long Island, N.Y. Subscribers in fewer than 1,000 households will be given the chance to store 80 gigabytes of data, or about 25 hours of programming, on Cablevision servers. The service will be free-of-charge to the participants.

Customers who sign up for the remote-storage digital-video-recorder service will be sent new remote controls to activate the service. Consumers will have full pause, rewind and fast-forward capabilities, and they will be able to keep programs in their storage binds as long as they want.

Monthly fees for the network-based DVR service have not been set. Cablevision currently offers customers set-tops with either standard-definition or HD recording capabilities at $9.95 per month.

If all goes well, Cablevision -- which serves 3 million subscribers, all told -- plans a broader rollout of the service later this year. In the commercial rollout, customers will be charged a monthly fee for storing and playing back the programs they record.

Programming networks could object to what they might consider unauthorized copying by the cable companies of their copyrighted works.

A somewhat similar service called Mystro was developed earlier in this decade by Time Warner Cable, in which it planned to store one week’s worth of all programs that appeared on its systems for playback by viewers.

But Time Warner was never able to get permission from programmers to record and store their content on its servers. Programmers said the existing affiliation agreements did not allow for such recording and storage

Cablevision, the nation’s sixth-largest cable-system operator, believes its recording service is on safe legal ground since the user is initiating the copying, not the company.

Cable-programming executives said they could not comment on the Cablevision trial, citing a lack of information. But one network programming executive reserved judgment on the legality of Cablevision’s move.

“There are potential copyright issues and Cablevision could end up having to go to us programmers to license content,” the executive said.

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Time Warner cable watching Cablevision's network DVR

March 30, 2006

Market News

NEW YORK -- Time Warner Inc. cable division is keeping close tabs on Cablevision Systems Corp's network-based digital video recorder, Chief Financial Officer John Martin said Thursday.

"If it proves legal and consumers want it, we have the ability" to offer it on our network, Martin told attendees at a Bank of America investor conference here. "Stay tuned on this one."

Earlier this week, Cablevision, Bethpage, N.Y., revealed plans to test a new digital video recorder that would allow customers to store programs on the company's cable network rather than on a box at home. The practice would yield huge savings for cable companies as DVRs can cost up to $500 each and are known to break down.

Though cable companies would benefit from network based DVRs, the technology is likely to raise to ire of content providers. New York-based Time Warner's cable division tried to offer a somewhat similar service in 2003, called Mystro, but was derailed by copyright issues. That service would have made programs available to users through video on demand.

After Mystro was derailed, Time Warner Cable introduced "Start Over" instead; the service lets users start at the beginning of a program if it is still in session. Martin said Thursday that the service has been a big hit thus far. The company plans to roll out the service to more markets soon.

On other topics, Martin told attendees the company's acquisition of bankrupt cable operator Greenwood Village, Colo.-based Adelphia Communications is still on track to close before the end of the second quarter. Time Warner is in a deal with Philadelphia-based Comcast Corp. to buy Adelphia. The deal has not yet gained approvals from the Federal Communications Commission but Martin said he remains "confident" about the timeframe.

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Comcast, Time Warner Bullish on Network DVRs

March 30, 2006

By Mike Farrell, Multichannel News

New York -- Less than one week after Cablevision Systems Corp. announced plans to test a network-digital-video-recorder service, two executives from the two largest cable operators in the country hinted at an industry conference that they would follow suit if the product passes legal muster.

At the Banc of America Securities Media, Telecommunications & Entertainment conference here Thursday, Comcast Corp. chief operating officer Steve Burke applauded Cablevision for the network-DVR service.

“I think it’s a great idea, and I really applaud the things that [Cablevision COO] Tom [Rutledge] and Cablevision are doing, including network DVR,” Burke said at the conference. “Our lawyers have told us that they think Cablevision is on very firm [legal] footing.”

Cablevision announced Monday that it will test the network-DVR service -- which would be housed on Cablevision servers and would allow customers to record and play back shows -- in fewer than 1,000 homes on Long Island, N.Y., in the second quarter.

At the conference, Burke alluded that Comcast would consider a similar product if the legal issues are worked out, adding that it would be a true differentiator for cable versus satellite.

“If it happens, which I predict it will, it’s a tremendous competitive advantage versus satellite,” he said. “I’m sure the rest of the industry will follow.”

Time Warner Cable chief financial officer John Martin, speaking earlier at the conference, was a little more cautious.

Time Warner tested a similar service, called Mystro, several years ago, but it pulled the plug after failing to secure the necessary licensing agreements from programmers. But Martin said his company already has the capability to offer a network DVR.

“Our infrastructure does provide us with the capability to do this,” he added. “If over time, this proves legal, and if over time, this proves to be something that consumers want to do, we have the ability to bring that to them … So I’d say: Stay tuned on this one.”

Rutledge was obviously pleased that other operators like the network-DVR concept, but he added that offering it is simply a matter of common sense.

“Why wouldn’t you?” he said after the conference, regarding other operators rolling out their own network DVRs. He added that the service is an elegant solution that gives customers the functionality they want and operators the ability to provide it efficiently.

While there is still the specter of lawsuits from programmers that may object to the service, Rutledge said that may disappear when they realize that the service is simply another form of DVR.

“We didn’t set out to start a fight, and we’re not looking for one,” he added. “A lot of programmers say DVRs are good for business. They’re gaining viewership that didn’t occur otherwise.”

Separately, Martin said Time Warner is negotiating with programmers to extend the windows for its “Start Over” service, which allows users to watch a program already in progress from the beginning.

Asked if Time Warner was working with programmers to extend that window further -- perhaps to 24 hours, 48 hours or one week after the original broadcast -- Martin said, “Yes.”

“We are confident and expect that we are going to be able to continue to evolve our programming relationships to continue to gain incremental rights,” he added.

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Laybourne on Network-DVR ‘Issues’

April 9, 2006

By Tom Steinert-Threlkeld, Multichannel News

Atlanta -- Recording shows for television viewers on servers inside a cable network creates “gigantic copyright issues,” one of the longest-standing developers of new programming for cable-system operators said Sunday.

Geraldine Laybourne, former program manager and then president of Nickelodeon, currently cofounder of Oxygen and co-chair of this year's National Show here, said after the show's opening session that large entertainment companies are working on a legal strategy that could establish exclusive rights to determine how their works are distributed through cable networks.

“I think there are gigantic copyright issues that programmers are dealing with right now,” Laybourne said in a press conference after the session, adding, “We always expect to be paid” for the use or reuse of programs that appear on television that Oxygen, for instance, has produced.

The only cable system operator to date to announce plans to allow its customers to record programs they see on digital recorders located at an equipment headend or data center within a network is Cablevision Systems Corp., based in Bethpage, N.Y.

“We've conducted a thorough analysis. We are confident that this superior approach is on solid legal footing, and we are moving ahead,” Cablevision vice president of media relations Jim Maiella said.

The reason? Customers -- individuals -- decide what to record, not the cable-system operator. And the cable-system operator -- Cablevision, in the first case -- will store as many copies of a show as there are individuals asking for a recording. There will not be shared recording.

This may be considered safe under federal law regarding “fair use” of intellectual property that a consumer has purchased.

Coincidentally, Cablevision chief operating officer Tom Rutledge is Laybourne's co-chair for this year's cable show. He began the day's opening session on stage with Laybourne. He did not appear with her after the session, in the press conference.

Cable-system operators would like to see recording of shows take place on servers in their headends. Rutledge touted the approach because it means Cablevision won't have to install digital-video recorders or set-top boxes with DVRs in hundreds of thousands of customers' homes; the service can work with existing digital-cable boxes, and the company can maintain and upgrade services easier and avoid truck rolls.

Indeed, before Laybourne spoke, Robert Miron, CEO of Advance/Newhouse Communications, said at the same press conference that the network-based DVR was logical and desirable.

“I think technologically, it's a perfect idea, and I'd love to see it come to fruition,” he said.
Another programmer, John Hendricks, founder and chairman of Discovery Communications Inc., said he was comfortable with network-based recording “if the consumer is in control.” What worries him are outside parties that could “intervene” in uncharted ways.


“We are very concerned about a third party intervening in a fashion where they could manipulate content and create ‘virtual channels,’” Hendricks said, changing content in “a way we didn't intend.”

Laybourne would not put a time frame on when she expected to see the launch of a legal challenge to the network recorder, if it's coming.

But she said concern about the network-based DVR is widespread in the entertainment industry. “The lawyers at all of our companies,” she added, “are trying to figure out a strategy. This is a new announcement and it's a very big change.”

She said she doesn't know what the legal options are, but “the big entertainment-company lawyers are probably going to be” the ones that would get active.

“The companies that have it all,” she added. “ The Viacoms, the MTVs, the Paramounts. They have it all. They'll be the ones that figure it out.”

Will Oxygen act in concert? “We'll be listening,” she told Multichannel News.

[dkennedy]

Network-DVR Battle: Cablevision Sued

May 24, 2006

By Steve Donohue, Multichannel News

Cablevision Systems Corp.’s plan to offer subscribers a network-based digital-video-recorder service will soon be tested in federal court after several major studios and networks sued the cable distributor Wednesday afternoon.

Plaintiffs 20th Century Fox Film Corp., Universal City Studios, Paramount Pictures, Disney Enterprises, CBS Broadcasting, ABC Inc. and NBC Studios asked the U.S. District Court for the Southern District of New York for an injunction that would block Cablevision from continuing its plan to test a network DVR on Long Island, N.Y.

Comcast Corp., Time Warner Cable and other major cable operators have cheered Cablevision’s plan, saying that they would also like the ability to market network DVRs -- a service that could allow operators to quickly deploy a subscription DVR service that could run on inexpensive digital set-tops, saving the cost of rolling out $500 boxes containing DVRs.

The networks and studios complained in the suit that Cablevision hasn’t reached programming deals for the network-DVR service. But Cablevision maintained that a network DVR would operate no differently than a DVR in a customer’s home, and that it therefore doesn’t need to cut programming deals for the service.

“This lawsuit is without merit, reflects a fundamental misunderstanding of Cablevision’s remote-storage DVR and ignores the enormous benefit and well-established right of viewers to time-shift television programming,” Cablevision said in a statement issued Wednesday night.

“Cablevision’s remote-store DVR will allow many more consumers to enjoy these benefits at a lower cost, and we hope and expect that the court will allow our customer-friendly technological approach to move forward,” the MSO added.

The studios and networks argued in the complaint that Cablevision’s network DVR is actually a video-on-demand programming service -- which requires license deals with programmers -- masked as a DVR.

“While Cablevision will call its service ‘RS-DVR’, presumably to make it sound like a mere extension of digital-video-recording equipment, the proposed service is nothing of the kind,” the plaintiffs wrote in the complaint.

“Cablevision’s proposed service is an unauthorized video-on-demand service that would undermine the video-on-demand, download, mobile-device and other novel and traditional services that plaintiffs and other copyright owners have developed and are actively licensing into the marketplace,” the plaintiffs added.

Several of the plaintiffs, including NBC and Fox, have cut deals to sell programming via Apple Computer Inc.’s iTunes store. Others, including ABC and CBS, have plans to distribute programming via their own Web sites.

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Cartoon, CNN Sue Cablevision

May 30, 2006

By Steve Donohue, Multichannel News

Cartoon Network and CNN sued Cablevision Systems Corp. in an attempt to block the company from pursuing plans to roll out a network-based digital-video-recorder service.

The suit, filed last Friday, came two days after several cable networks and Hollywood studios sued Cablevision, seeking an injunction that would prevent the company from continuing with plans to launch a network-DVR service on its Long Island, N.Y., system in June.

Cartoon and CNN asked the U.S. District Court for the Southern District of New York for declaratory and injunctive relief, arguing that the network-DVR service would infringe on its copyrighted programming.

The decision by Cartoon and CNN to enter the fray is noteworthy, considering the fact that executives from its Time Warner Cable corporate sister have said they would also like to roll out a network-based DVR service, which would allow the company to reduce costs in deploying expensive set-tops containing DVR technology.

“Our infrastructure does provide us with the capability to do [network DVR],” Time Warner Cable chief financial officer John Martin said at a Banc of America Securities LLC conference in New York March 30.

Martin said Time Warner Cable would offer such a service if it proved legal.

Time Warner Cable also experimented with technology similar to Cablevision’s network-DVR service through its now-defunct Mystro TV project. The difference with Mystro TV was that Time Warner planned to obtain rights from TV networks to offer their programming on-demand, through remote servers, Time Warner Inc. spokesman Ed Adler said.

Cablevision has argued that it does not need to obtain additional rights from TV networks that it carries for the network-DVR service, since the network DVR would function like DVRs contained in cable set-tops.

The complaint filed by CNN and Cartoon last Friday included a letter that Turner Broadcasting System Inc. general counsel Louise Sams sent Cablevision senior vice president of programming Mac Budill May 10 in which she warned that Turner would “reserve all right to seek any equitable or legal remedies available” if Cablevision continued with its plan for a network-DVR service.

Plaintiffs in the original network-DVR suit filed against Cablevision last Wednesday were 20th Century Fox Film Corp., Universal City Studios, Paramount Pictures, Disney Enterprises, CBS Broadcasting, ABC Inc. and NBC Studios.

Cablevision has described the original DVR suit as “without merit,” saying that it “reflects a fundamental misunderstanding of Cablevision’s remote-storage DVR and ignores the benefits and well-established right of viewers to time-shift television programming.”

[dkennedy]

Now here's a DVR that thinks outside the box

June 5, 2006

By Andrew Wallenstein, The Hollywood Reporter

After years of faithful service, my TiVo recently broke down. It took hours of phone work and weeks of shipping the unit back and forth to repair the problem, a process that brought me to the brink of insanity.

The experience also gave me a renewed appreciation for just how revolutionary a new service proposed by cable operator Cablevision Systems Corp. is.

Scheduled for a trial run this month, the remote-storage digital video recorder tucks the traditional DVR capabilities into your existing digital cable set-top box. That means no need for the extra%@#& box or the extra costs that come with it. And Cablevision can cut cap-ex while employing another technology satellite can't replicate.

But no consumer-friendly good deed goes unpunished in the entertainment business. Last week, virtually every major media company -- the Walt Disney Co., CBS Corp., 20th Century Fox, to name a few -- joined in a lawsuit filed against Cablevision to block deployment of the new technology.

That's because what the RS-DVR basically does is make a copy of any TV show a subscriber requests and then stores it at the Cablevision's central servers instead of that cursed box. And Cablevision has no contractual right to store or transmit the copy, according to the lawsuit.

It might seem like a trivial distinction; isn't a DVR and a RS-DVR essentially the same product, only one stores the program at home instead of at the cable company?

What content owners believe is that Cablevision's new RS-DVR is not really a DVR at all but a copyright-infringing video-on-demand service. Cable operators pay royalties to content companies for the rights to offer their programs on VOD. By enabling copies to be made and stored at the cable company, isn't Cablevision creating a VOD service without paying for content and then labeling it a DVR?

But Cablevision's spine-bending walk under the limbo stick of "fair use" isn't that simple. It's not as if the RS-DVR simply shelves copies of every TV show that ever aired and allows subscribers to raid the pantry. Each subscriber gets 80 gigabytes of personal storage space, and each program requested elicits a distinct copy. Cablevision isn't technically disseminating mass copies, it's allowing each individual to make their own copies.

At an investor conference Friday, Cablevision chief operating officer Tom Rutledge urged Hollywood to embrace the technology, emphasizing its advantages in marketing and audience measurement.

This isn't just some technical disagreement among gearheads; it could have dramatic consequences for the TV business. If cable operators are allowed to embed DVR functionality in average digital set-top boxes, DVR penetration will make a quantum leap, and suddenly advertising-skipping will be a lot more pervasive.

Don't think that's lost on Madison Avenue right now in their standoff with TV networks in upfront negotiations over whether anything but live ratings data should be factored into their audience measurement.

And don't be misled into thinking that this represents an isolated case because Hollywood is ganging up on poor little Cablevision. Although the company has earned its reputation as the rogue state in the Republic of Cable, Cablevision's bigger counterparts like Comcast Corp. are waiting in the wings. Comcast chief operating officer Steve Burke said so himself at a recent investor conference: "If it happens, which I predict it will, I'm sure the rest of the industry will follow."

Time Warner Cable also would follow, which might be the strangest quirk in this situation because other Time Warner divisions -- CNN and Cartoon Network -- also filed suit against Cablevision. What's more, Time Warner once nearly started a similar service, Mystro, that never launched because of the legal implications.

So does RS-DVR=DVR/VOD? If that algebra equation isn't enough to liquefy your brain, consider this koan: what Cablevision is doing here is place-shifting time-shifting. It raises profound questions about copyright law at a time when the industry shift away from linear programming is ripping up the rulebook faster than it can be rewritten.

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Cablevision Fires Back at Networks

June 7, 2006

By Steve Donohue, Multichannel News

Arguing that its plans to roll out a network-based digital-video-recorder service this month don’t violate copyright laws, Cablevision Systems Corp. Wednesday filed a counterclaim against several major television networks and Hollywood studios that want to block it.

With the counterclaim -- filed against 20th Century Fox Film Corp., Universal City Studios, Paramount Pictures, Disney Enterprises, CBS Broadcasting, ABC and NBC Studios -- Cablevision wants a judgment that would declare that its Cablevision’s “RS-DVR” service “will not subject it to direct liability for infringing” copyrights.

The parties are scheduled to meet at the U.S. District Court for the Southern District of New York Wednesday afternoon to discuss procedural issues and establish a timetable for sharing discovery evidence before a trial. A trial date has not yet been set.

Cablevision’s counterclaim followed a suit filed May 24 against the MSO by the major networks and studios.

Turner Broadcasting System Inc.’s Cartoon Network and CNN also sued Cablevision in an attempt to block the network DVR, but Cablevision didn’t name the Turner networks in its counterclaim.

While the networks and studios argued in their complaint that Cablevision’s network DVR is actually a video-on-demand service masked as a DVR, Cablevision compared it to the Sony Betamax, VCRs and set-top-based DVRs in its counterclaim.

“The RS-DVR is no more a VOD service than traditional set-top-storage DVRs are VOD services. Plaintiffs’ new challenge to Cablevision’s product represents a misguided invocation of copyright law, which would stifle innovation and roll back the rights of consumers,” Cablevision told the court.

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Cablevision to Delay Network DVR

June 8, 2006

By Steve Donohue, Multichannel News

Cablevision Systems Corp. said it will delay the launch of a network-based digital-video-recorder service until this fall, agreeing to wait until a lawsuit brought against the company by several TV networks and studios is resolved.

Before 20th Century Fox Film Corp., CBS Broadcasting and other networks and studios sued Cablevision May 24, the cable operator had planned to begin testing its network DVR on Long Island, N.Y., this month.

Cablevision spokesman Jim Maiella said the company agreed to delay the launch of the network DVR under a deal that resulted in an expedited schedule that could bring a decision in the case as early as this fall.

The delay impacts not only Cablevision, but other cable operators that are waiting for the suit to be resolved before pursuing their own network DVRs, which could help cable to compete against direct-broadcast satellite and telephone providers.

Cablevision executives believe the product, called “RS-DVR,” would enable it to more efficiently deliver DVR service to all digital-cable households by allowing subscribers to store programming on remote servers.

While Cablevision said the network DVR would perform just like DVRs contained in set-tops from Scientific Atlanta Inc., Motorola Inc. and other vendors, the networks and studios argued that the network-DVR concept is actually a video-on-demand programming service that would require rights agreements with program producers.

The delay of the rollout of the network DVR -- pending the outcome of the lawsuit -- means that Cablevision wouldn’t be able to market the service until this fall, at the earliest.

“Defendants agree not to launch their ‘remote-storage digital-video recorder’ pending resolution by the court of the question of liability in this action,” U.S. District Court for the Southern District of New York Judge Denny Chin wrote in a scheduling order filed late Wednesday at the court.

According to the case schedule, a hearing in which Chin would rule on the case will take place Oct. 30 or 31. The parties are scheduled to complete the exchange of discovery evidence by the end of July and to file legal briefs with the court in August and September.

Comcast Corp., Time Warner Cable and other cable operators are paying close attention to the Cablevision suit, since those MSOs have said they would also like to deploy network-based DVRs, which could cut costs and accelerate the rollout of subscription-based DVR services.

20th Century Fox Film Corp., Universal City Studios, Paramount Pictures, Disney Enterprises, CBS Corp., ABC and NBC Studios filed a suit seeking an injunction that would block Cablevision from rolling out the RS-DVR May 24.

Two days later, Turner Broadcasting System Inc.’s Cartoon Network and CNN filed their own suit against Cablevision, which has been combined with the original complaint.

[dkennedy]

Cablevision Network DVR in Court’s Hands

June 12, 2006

By Steve Donohue, Multichannel News

If all goes according to its new plan, Cablevision Systems Corp. would begin marketing its disputed network-based digital video recorder service by Thanksgiving.

Faced with litigation from broadcast networks, cable outlets and Hollywood studios, the cable operator dropped plans to test the service starting this month and instead agreed last week to an expedited review of its plans in court.

If the case stays on track at the U.S. District Court for the Southern District of New York, Judge Denny Chin said last week that he'll hold a hearing in which he could rule on the case on Oct 30 or Oct. 31.

Cablevision's Fast Track U.S. District Court Judge Denny Chin's schedule for expediting a hearing on the legality of recording shows for customers on servers in a network.

June 15
Document production begins

July 19
Status conference

July 31
Discovery of relevant information complete

Aug. 14
Memoranda for summary judgement requests due

Sept. 14
Opposing memoranda due

Sept. 28
Replies due

Oct. 31
Case to be ready for hearing


But some attorneys are predicting that no matter which side wins at the initial hearing, the dispute could drag on for more than a year, eventually making its way to the U.S. Supreme Court.

"I think this will go all the way [to the Supreme Court], and even then it may not be decided until Congress steps in," said Bruce Sunstein, an attorney at Boston based firm Bromberg & Sunstein.

The debate over whether pay-TV providers should be permitted to allow customers to store programming on remote servers on their networks will force Congress to update copyright laws, he added.

Kagan Research analyst John Mansell concurred, predicting the appeals process could take at least a year.

The delay impacts not only Cablevision. Comcast Corp., Time Warner Cable and other cable operators are waiting for the suit to be resolved before pursuing their own network recording services, a feature which could help cable compete against DirecTV Inc., EchoStar Communications Corp. and telephone firms.

Cablevision is hedging its bets. The company began marketing traditional set-top-based digital video recorders just two weeks ago, shortly after the lawsuit was filed.

Cablevision executives believe the network DVR product, called "RS-DVR," would allow it to more efficiently deliver DVR service to all digital-cable households, by allowing subscribers to store programming on remote servers.

While Cablevision says that a network DVR will perform just like DVRs contained in set-tops from Scientific-Atlanta Inc., Motorola Inc. and other vendors, the networks and studios argue that the network DVR concept is actually a video-on-demand service that would require rights agreements with program producers.

In a counterclaim Cablevision filed at the court last week, the company compared its network digital recorder to the Sony Betamax, other videotape recorders and traditional set-top box DVRs.

Cablevision cites 1984's landmark Sony vs. Universal City Studios case, in which the Supreme Court ruled that allowing consumers to record TV shows and movies on VCRs was a "fair use" of copyrighted programming.

"The technology that consumers use to time-shift television programming has progressed (from the Betamax to the VCR and now the DVR), but the principle that time shifting is fair use has remained settled under Sony, and the provision of technology to allow consumers to time shift has remained unchallenged," Cablevision told the court.

Judge Chin noted in his scheduling order last Wednesday that Cablevision has "stated that it will not be asserting a 'fair use' defense against claims for direct infringement."

But Sunstein said he believes "fair use" will still be a key point of debate in the case. "It hinges on Cablevision being able to say that kind of [network DVR] usage by the consumer is fair, and they're just providing the technology for it. It's not what they [Cablevision] are doing is fair-use, per say."

The parties are scheduled to complete the exchange of discovery evidence by the end of July, and file legal briefs with the court in August and September.

Twentieth Century Fox Film Corp., Universal City Studios, Paramount Pictures, Disney Enterprises, CBS, ABC Inc. and NBC studios filed a suit seeking an injunction that would block Cablevision from rolling out the RS-DVR on May 24. Two days later, Turner Broadcasting System Inc.'s Cartoon Network and Cable News Network filed their own suit against Cablevision, which has been combined with the original complaint.

The decision for networks from Time Warner Inc.'s Turner Networks Group to join the case may generate internal debate with corporate sister Time Warner Cable.

Time Warner Cable chief technology officer Mike LaJoie last week compared Cablevision's network DVR concept to his company's "Start Over" service, which allows digital-cable subscribers that miss the beginning of a program to watch the show from the beginning. But LaJoie noted that the difference with Start Over is that Time Warner Cable secured rights deals with programmers before launching the service.

[dkennedy]

Cablevision Loses Network-DVR Case

March 22, 2007

By Steve Donohue, Multichannel News

Hopes by Cablevision Systems to deploy a network-based digital-video recorder service were set back Thursday after a federal court ruled in favor of major TV networks and Hollywood studios that had argued that the cable distributor’s network DVR would violate copyright laws.

The U.S. District Court for the Southern District of New York ruled in favor of Twentieth Century Fox Film, Universal City Studios, Paramount Pictures, Disney Enterprises, CBS, ABC , NBC Studios and Turner Broadcasting System’s Cartoon Network and CNN, which sued Cablevision in May.

“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,” Cablevision said in a prepared statement Thursday night.

The ruling is not only a setback for Cablevision, but for other major cable operators that were hoping to deploy their own network DVRs if Cablevision’s attempt proved successful.

While Comcast, Time Warner Cable and other major cable distributors didn’t follow suit with plans for their own network DVRs, some operators cheered the strategy, which could allow cable operators to market DVR services widely and more efficiently than deploying individual DVRs in households.

“I think it’s a great idea and I really applaud the things that [Cablevision chief operating officer] Tom [Rutledge] and Cablevision are doing, including the DVR,” Comcast chief operating officer Steve Burke said. “If it happens, which I predict it will, it’s a tremendous competitive advantage versus satellite ... I’m sure the rest of the industry will follow.”

Cablevision first announced plans to deploy a network DVR last March. While the networks and studios sued the company two months later, Cablevision argued that its network DVR product, called “RS-DVR,” wouldn’t violate copyright laws since it would perform similar to DVRs installed in individual homes.

In their lawsuit, Fox, NBC and other plaintiffs argued that Cablevision’s network-DVR concept was actually a video-on-demand service -- which requires license deals with programmers -- masked as a DVR.

“Cablevision's proposed service is an unauthorized video-on-demand service that would undermine the video-on-demand, download, mobile-device and other novel and traditional services that plaintiffs and other copyright owners have developed and are actively licensing into the marketplace,” the plaintiffs complained in the suit.

In its ruling Thursday, the U.S. District Court ruled that Cablevision’s RS-DVR would violate copyright law, since it would rely on technology and hardware embedded in its network.

Some industry observers have said previously that they expected the network-DVR case to eventually make its way to the U.S. Supreme Court. Cablevision said it may appeal the case.

“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,” Cablevision said in a prepared statement.

In the meantime, Cablevision continues to market Scientific Atlanta DVRs to its iO: Interactive Optimum digital-cable customers. To date, the company has installed about 500,000 DVRs in homes in its New York metropolitan-area footprint.

[dkennedy]

Public Groups Back Cablevision in Network-DVR Fight

Public Knowledge, Other Groups File Amicus Briefs

June 12, 2007

By Steve Donohue, Multichannel News

Several public-interest groups are backing Cablevision Systems in its fight to legalize network digital-video recorders.

Cablevision -- which hoped to cut costs and widely deploy DVR service by delivering programming to set-tops in subscriber homes by relying on shows stored on computers stored in neighborhoods -- was ordered to halt its plans after losing a lawsuit in March. The cable operator, which filed an appeal in June, is fighting plaintiffs 20th Century Fox Film, Universal City Studios, Paramount Pictures, Disney Enterprises, ABC, CBS, NBC and Cartoon Network.

In briefings filed recently at the Second Circuit U.S. Court of Appeals in New York, Public Knowledge and 10 other industry and public-interest groups backed Cablevision in its bid to overturn the March decision from a U.S. District Court, which ruled that Cablevision’s network-DVR plans would violate copyright law.

“Consumers would clearly be the losers if the law makes an illogical distinction between being able to record shows through a set-top box or through a cable-modem network,” Public Knowledge president Gigi Sohn said.

Joining Public Knowledge in the amicus briefs filed -- also known as “friend of the court” briefs -- were the Center for Democracy and Technology, the Electronic Frontier Foundation, NetCoalition, the Broadband Service Providers Association, USTelecom, the American Library Association, the American Association of Law Libraries, the Association of Research Libraries, the Medical Library Association and the Special Libraries Association.