December 2, 1999 12:25 PM PST

Online TV service may spark new Net battle

A cross-border fight is shaping up over the legality of broadcasting live television content over the Internet.

Launched this week, Canadian Internet start-up iCraveTV.com offers live television programming from 17 Canadian and American television stations over the Internet. This appears to be the first time in North America that TV programming has been broadcast online, live and uncut.

This type of service is exactly what American cable companies, broadcasters and television studios feared when they went to Congress to prevent firms from transmitting TV signals online, citing copyright and other business concerns.

Net firms like America Online, Yahoo and others have yet to say whether they have such TV programming plans in the works, but they have fought to make sure the option isn't legally denied them prematurely.

The Canadian service arrives at a time when Net and television companies are increasingly trying to merge their services while still trying to maintain a line between Internet and TV content. Firms like Broadcast.com, Atom Films and others are offering original video content online, while television companies are creating online tie-ins to their shows.

But at least in the United States, copyright provisions and political pressure have prevented live TV programming from being piped over the Net. iCraveTV's service, however, may fuel a new fight over copyright issues and country-specific laws that are hard to enforce when it comes to the borderless Internet.

With a Net connection, a Web browser and RealNetworks' streaming media software, users can watch live broadcasts of sports events, shows like "Seinfeld" or "South Park," or news. The signals come largely from Canadian TV stations, but also include several network television channels from Buffalo, N.Y.

"I think this has caught [television stations] by surprise," iCraveTV chief executive William Craig said. "But that's what the Net is all about, catching people by surprise."

The service is meant solely for Canadian viewers, however. To log on, users have to type in a Canadian area code and click a button indicating that their computer is in Canada. But there is no technological bar that stops U.S. viewers--or viewers anywhere in the world--from offering any Canadian area code and logging on to the TV service.

This issue concerns U.S. broadcast companies, which have fought to keep their copyrighted TV programming off the public Internet.

Broadcasters, TV studios, cable companies and other copyright holders backed a provision in a recent congressional satellite TV bill that would have barred Net companies from getting licenses needed to retransmit local programming, like news and sports.

"This is fundamentally a copyright issue," National Association of Broadcasters (NAB) spokesman Jeff Bobeck said. "What's at stake here is the right and ability of programmers to control the use of their content."

America Online, Yahoo and a coalition of other Net and telephone companies fought the provision, and were successful in having it removed. But the U.S. Copyright Office has said that ISPs shouldn't be given licenses under existing copyright law. The companies plan to revisit the issue again next year.

"Congressional interest was piqued in this issue by the debate," Yahoo Washington, D.C., counsel John Scheibel said. "It will not be surprising if Congress wanted to open new fact-finding hearings soon."

But iCraveTV's service--and the ability of any other Canadian company to set up shop doing the same thing--will likely put the issue of TV over the Internet on the front burner.

"We think this is a copyright infringement here, at least as it relates to USA citizens and businesses," said Bill Ransom, president of Buffalo, N.Y., ABC affiliate WKBW, one of the stations broadcast over iCraveTV's service. The station is exploring its legal options, he said.

It's a tricky legal question. Under Canadian law, any company is allowed to retransmit public television signals, as long as it is a live stream and the signal is not changed in any way. iCraveTV fulfills both of these conditions, transmitting commercials and programs without cutting or adding any new content.

The company's CEO said he doesn't intend to compete with broadcasters or cable TV stations. His service is designed for viewers who want to keep tabs on a show while they're doing something else on their computer, like email or homework, he said.

"If you sat there and looked at this full frame, I think you ought to be put in an asylum," Craig said, noting that the picture quality is nowhere near a regular TV signal. "But if you sit and look at it at a small size, then it's very watchable."

Craig said he's trusting to the honesty of viewers to ensure that only Canadians watch his service--though this strategy will likely be as successful as asking minors not to log on to adult Web sites.

But he says the cross-border issues will have to be worked out somehow, although believes he's operating completely within the bounds of his country's law.

"The border is getting awfully thin between these two countries," Craig said. "And the Internet is making it a lot thinner."

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