Court Not Impressed With ivi's Legal Loopholes, Shoots Online TV Broadcaster Down

from the playing-games-with-the-law dept

A few months back, we wrote about a company called ivi, which was trying to use some legal loopholes to stream broadcast TV online. It was basically trying to use a part of the law (Section 111 for those playing along with the home game) that was designed to make it easier for cable stations to rebroadcast network TV. However, the court is not buying it and has issued a preliminary injunction ordering the site to shut down its service. The court points out that ivi isn't just playing a single loophole game, but it's really trying to thread the needle through two separate loopholes. For the strategy to work, not only does Section 111 have to apply to the internet provider, but at the same time, it has to exempt itself from the Communications Act. The court suggests this tapdance is too much to take:
In other words, defendants argue that ivi is a cable system for purposes of the Copyright Act, and thus may take advantage of the compulsory license, but that it is not a cable system for purposes of the Communications Act, and thus it need not comply with the requirements of that Act and the rules of the FCC promulgated thereunder.
The thing is, the more I read the details, the more I actually think that ivi's legal argument makes sense, even if the court disagrees. The problem here is the way the laws are written. A strict reading of Section 111 certainly suggests that ivi probably qualifies and can rebroadcast network TV with a nominal payment to the Copyright Office. At the same time, it's true that the Communications Act almost certainly doesn't apply to ivi, because it doesn't cover the internet. In other words, ivi's careful loophole threading seems to make sense. The more reasonable response from the court wouldn't have been to shut it down, but to allow it to go forward -- and for Congress to determine if that loophole should or should not exist (meaning the TV industry lobbyists step in and Congress shuts the loophole).

All that said, this whole fight seems pretty silly. I still don't understand why the TV networks are that upset by ivi, and I still don't see how ivi has a business model that's particularly compelling or sustainable. The networks might have been better served by just letting ivi flop on its own. I can't see too many people willing to pay up just to get broadcast TV...

Filed Under: broadcast, cable, copyright, loopholes
Companies: ivi

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  1. identicon
    Scott Owens, 24 Feb 2011 @ 1:40am

    ivi serves a growing niche

    I stopped subscribing to cable ages ago and I don't own a tv. I use netflix and watch whatever I can online.

    However, when it comes to certain live events like the olympics, the world cup, the super bowl. I want nothing more than to see these events live. I am willing to pay to see them for the duration of the event. But I am not willing to pay a huge fee for a cable subscription.

    ivi offered a way to spend a few dollars and get access to the content I want to see. Something the cable & broadcast networks are not willing to let me do. And because the dept of homeland security is cracking down on other options.. I am left with no alternatives.

    I wanted to subscribe to ivi during the superbowl but they were inundated with requests and had to limit subscriptions. This shows that there is a real demand for their service and it probably is a threat to the networks.

    Not only is it cheap. (I think $6 a month) But they even support Linux and Mac. I hope ivi is around during the next live event I want to see because I am totally willing to pay the reasonable price to watch tv the way I want to.

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