Supreme Court declines to hear cable DVR case

Correction: An earlier version of this story misidentified a service called Mystro TV. That service was tested by Time Warner Cable.

The Supreme Court has declined to hear what could be a watershed copyright case that has the potential to make it easier for people to record and watch their favorite movies and TV shows at home.

On Monday, the Supreme Court asked the U.S. Department of Justice to look at a case involving a new service proposed by Cablevision that allows people to record broadcast TV shows and movies on a digital video recorder that sits in Cablevision's network instead of in their living rooms.

The TV networks and Hollywood film studios sued the cable operator in New York, seeking to block the service. The networks and studios have argued that recording programming in this way violates copyrights. (Disclosure: The film studios and television networks that brought the suit against Cablevision include Time Warner, News Corp., Walt Disney, and CBS, which owns CBS Interactive, publisher of CNET News.)

The case has been winding its way through the court system for three years. In 2007, a U.S. District Court in New York barred Cablevision from launching the service after the cable operator lost its initial suit. Cablevision appealed the decision. And in August 2008, a U.S. appeals court overturned the lower court's ruling, siding with Cablevision.

The TV networks and movie studios appealed to the Supreme Court in October, arguing that Cablevision was violating the law because it did not plan to pay a licensing fee to make copies of their TV shows.

But Cablevision has argued that it is the cable subscriber who is determining what is copied. The networked DVR only sits in the Cablevision network where the content is stored and accessed. The company wants to keep this technology in its network because it is more efficient and cost effective to deliver the service than providing every home with multiple DVR set-top boxes.

Cablevision, which services over 3 million customers in the New York metropolitan area, claims each set-top box costs about $100. This cost is passed on to consumers who must pay a rental fee for their DVR set-top-boxes. The cable operator also incurs costs for installing and maintaining this equipment. Eliminating the need for one of these boxes in the home could reduce Cablevision's capital costs, and it could also help reduce the cost of the service for consumers.

It could also allow consumers to get rid of their set-top boxes altogether or at least get smaller devices that don't take up as much room as the bulky DVR boxes of today. And because the DVR function is housed in Cablevision's network instead of at home, consumers also won't have to deal with the hassle that often comes along with housing a relatively complex piece of networking equipment in their homes.

Experts agree that how the legal questions surrounding the case are ultimately decided will likely have a huge effect on the TV industry. Some believe it could even be as important a decision as the 1984 Supreme Court decision to allow consumers to record TV shows and movies on home videocassette recorders. That decision paved the way for the VCR, and it also cleared the way for DVR services that were first offered by Tivo and are now a mainstay of every cable, satellite, and phone company offering paid TV services.

It's been reported that Comcast and Time Warner Cable are also planning to introduce a networked DVR service if Cablevision wins its legal battles. And Verizon, which offers TV service through its Fios service, has also said it would consider offering a similar service.

For now the Supreme Court has sent the case to the Justice Department to consider. But the solicitor general at the Justice Department still has the option to toss the case back to the Supreme Court. If that happens, it wouldn't be heard until fall.

[rmva]

Just exactly what was the reason the Supreme Court "tossed" the case to the Justice Department? A question of law? A question of fact? This tossing stuff is a little vague.

[unknown unknown]

The Supreme Court can decline a case for any reason. They only hear a small minority of the cases that petition them. As LawyerPerson below says, they haven't really declined or tossed the case, only ask for input from the justice department.

[LawyerPerson]

The headline of this story and some of the text is misleading. The court did not decline to hear the case yet, nor did it kick the case to the Justice Department for decision. The petition for certiorari is still pending before the court. The court has asked the U.S. government to weigh in on the case, to aid the court in determining whether it should grant the petition. Those requests go to the Solicitor General of the U.S. who is a functionary of the U.S. Justice Department whose responsibility it is to represent the United States in the Supreme Court, among other things. This is not particularly unusual, although it does indicate a level of interest in the case on the part of the justices. Once the Solicitor General has responded the court will make its decision on whether or not to grant the petition.

[ballssalty]

Beat me to it! I was about to say this was a very misleading headline. It should read Supreme Court ask DOJ to review Cable DVR case.

If the headline was accurate it would mean the Appeals Court ruling stands and would pave the way for the service.

[zizzybaloobah]

Doesn't Verizon FiOS offer anyroom DVR? - isn't it the same idea/technology as described here for Cablevision? At least that's the impression I get from the commercials.

Of course greedy Comcast has to come along and confuse the issue with their on-Demand that can be started in one room and finished from another. Sorry fellas - that aint the same nor nearly as cool as any room DVR.

[gefitz]

Thanks Lawyer person! Muuuuuuuch clearer!

[Captseadog]

The head line is deceiving because cnet is now owned by CBS. CBS is notorious for slanting stories to make them seem bigger then they are.

[groink_hi]

Legally, I don't see the difference between, for example, a Californian recording HBO on a DVR in his home vs a DVR in New York City. The content is exactly the same, and the subscriber is paying for HBO hence fair use.

I think what the problem here is regional programming. I deal with this style of programming on a daily basis. For example, a Japanese TV company licenses a show to a TV station in New York City. Usually, the license covers only the region the TV station covers. What the license won't allow is for a Californian to obtain a copy of the show, since he does not reside in New York City in any form (owning a home in NYC, for example.)

In Japan, it has a law called HOBANKYO, which basically states that a TV program broadcast in Japan cannot be sent outside of its borders - in any form, whether it is via VHS tape, disc, Internet streaming, etc. A company in Japan tried to pull the exact same business model as Cablevision. And, HOBANKYO basically put a stop to the business model.

I'm wondering if the U.S. has a law similar to HOBANKYO. I would assume one does exist because, for example, SlingMedia does not allow streaming via its products like SlingBox, to multiple points on the Internet. The SlingBox also doesn't support recordings. And, the pain-in-the-*ss CableCard 2.0 is so limited and so very little supported. Try finding a TiVO that supports CableCard 2.0's two-way protocol.

I can see why the Supreme Court sent this back to the DOJ. The Court probably doesn't want to sent a precedence while many other lawsuits are currently pending, such as Comcast vs the FCC over the use of non-CableCard based set-top boxes, and so on.

[tvhawaii]

>>The SlingBox also doesn't support recordings. <<

What about something like this?

http://ces.cnet.com/8301-19167_1-10137052-100.html

[tvhawaii]

So is Cablevision saying that the 'consumer' will pay the licensing fee when they -view- the programming?
I know Hollywood likes to maintain the status quo, but as long as they get their money, isn't this "Cable DVR" fair?

[bruceslog]

But, Cablevision has ALREADY paid the licensing fee when Cablevision originally licensed and aired the program that may or may not be recorded by consumers...
This would be double taxing.
NOT Fair !!