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First Aereo, Now FilmOn: Another Fight for Innovation and Competition in TV Technology

DEEPLINKS BLOG
July 29, 2016

First Aereo, Now FilmOn: Another Fight for Innovation and Competition in TV Technology

Why is it so hard to see our local TV stations these days? Even as more and more people watch TV via the Internet, streaming local TV stations to our Internet-enabled devices is next to impossible in most places. Companies that try to bring local TV to the Internet have faced relentless legal challenges from major media companies and the broadcast stations they own. The latest is FilmOn (formerly called Aereokiller), which is fighting in multiple lawsuits around the U.S. for the right to capture local TV broadcasts and stream them to paying subscribers, much as a traditional cable company does. This week, EFF and Public Knowledge filed a brief at the Court of Appeals for the District of Columbia Circuit to explain why copyright law doesn’t favor big pay-TV players over newer, Internet-based services like FilmOn.

For over four years, major TV producers like Comcast, Viacom, Fox, Time Warner, and Disney, along with TV station owners like Comcast, Fox, Disney, and Sinclair, and cable companies like--well, Comcast--have fought in court to shut down new services that deliver local broadcast TV via the Internet. In 2014, the Supreme Court ruled that one of those services, Aereo, performed a function that was so similar to a traditional cable system that, like a cable system, it needed permission from copyright holders for the TV programs it transmitted.

After the Supreme Court ruled, the titans of television pressed to tip the playing field of competition in their favor. Cable and satellite TV companies don’t have to ask permission from the thousands of copyright holders whose works they transmit to paying subscribers every day. Using a “statutory license” built into the Copyright Act, today’s major pay-TV services can simply file some paperwork, pay a fee set by the government, and transmit TV shows to their hearts’ content. (Under Federal Communications Commission rules, pay-TV services have to get permission from broadcast TV stations to retransmit their signals, but this is more feasible, since there are far fewer broadcast stations than there are copyright holders.)

Neither cable companies, nor satellite TV companies, nor phone companies like AT&T and Verizon who sell pay-TV, have ever had to negotiate licenses with every copyright holder for every TV show on every channel they carry.

Unfortunately, several courts have now ruled that new pay-TV services who use the Internet, like FilmOn and the now-defunct ivi and Aereo, can’t use the statutory license and pay the government-set fee. In order to stream local broadcast TV at all, say these courts, Internet-based services must perform the nearly impossible task of getting permission from every copyright holder whose TV shows are broadcast on the local channels.

As we explained this week in our brief to the appeals court, those rulings give established pay-TV companies an unfair advantage over newer competitors like FilmOn. When it passed the current Copyright Act back in 1976, Congress intended the rules to be technology-neutral, applying equally to pay-TV systems whether they used copper wires, microwaves, or other technologies to reach customers’ homes. Though the established players may not like it, that includes the Internet.

We also explained to the court that it doesn’t need to defer to the opinions of the Copyright Office on this issue. The Copyright Office has written several reports in which it said that Internet-based pay-TV services shouldn’t be able to use the statutory license for cable companies. But while the Copyright Office acts as an advisor to the government on copyright issues, it has no legal authority to decide how to interpret Congress’s rules on most issues, including this one. That means that courts should use their own judgment.

Finally, we explained why copyright provisions in trade agreements negotiated in secret shouldn’t control the outcome of a U.S. case. The lower federal court in D.C. pointed out that several recent trade agreements between the U.S. and other countries contained language that seems to bar the signing countries from creating statutory licenses for Internet streaming of broadcast TV. But, as we said in our brief, trade agreements don’t change U.S. law unless Congress explicitly makes a change. And when Congress ratified the recent trade agreements, it said explicitly that existing U.S. law would not change. That means the statutory licenses for pay-TV, which have existed since 1978, still apply to Internet-based services within the U.S., in spite of the trade agreements. Allowing secretive trade negotiations to affect the outcome of lawsuits in U.S. courts, between U.S. companies, would be undemocratic. That’s not the way the law works.

This battle is likely to continue for a while yet. Major media companies are pressing their lawsuits against FilmOn in three appeals courts. Whether or not FilmOn is allowed to keep streaming broadcast TV in different areas of the country, we’ll continue to push for copyright law that’s friendly to innovation and competition.

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