Tuesday, 11 November 2014

Obama pushes the FCC to most sensible position on net neutrality: treat the internet as a utility (because that's what it is)

Today President Barack Obama proposed that the FCC bring the internet into Title II of the Telecommunications Act; thereby allowing the government to set standards on content preferences: effectively treating the internet as a utility.  Given the FCC, its regulated industry counterparts and the public at large have recently been at odds over internet regulation, this recent move by Obama represents the most sensible approach to net neutrality. 

Here it is:

  • If considered part of Title II of the Telecommunications Act, internet service providers could be subject to greater regulatory oversight from the FCC;
  • Under Obama's plan, such oversight would take the form of a requirement not to preference any traffic over any other. This would mean that, like other utilities such as electricity or water, the source and destination of the traffic over the networks that they own would be immaterial to the quality of service;
  • This would mean that Comcast, for example, could not slow the speed of Netflix in order to compel it to pay a concession for faster speeds.  Similarly, new entrants to a market who couldn't afford to pay would not be required to do so, and as a result, their services would be able to compete on a (more) equal footing to incumbents; and
  • Perhaps most importantly, Obama has insisted that the proposed regime apply to both fixed and mobile broadband providers.  Mobile telcos have previously professed that the scarce nature of spectrum is justification for them to be treated differently, but considering the increasing number of people relying on mobile broadband as their primary connection interface, this is a key inclusion.
It's not as easy as that however.  The FCC does not have to respond to Obama's plan (in fact, it didn't request it in the first place).  However, FCC Chairman, Tom Wheeler, was appointed by Democrats and the majority of other commissioners were appointed by Democrats.  So, Obama's suggestions may gain some traction despite them coming late into his presidency as well as after several failed courtroom battles.

As Barbara van Schewick stated on the blog of the Stanford CIS, the classification of broadband under Title II is "sound policy based on a strong legal foundation"[1] This has long been the case but it has not effectively been implemented.  Earlier this year, the FCC lost their battle to Verizon because in drafting the Open Internet Order (the regulation which was the subject of the Court's examination), the FCC relied on section 706 of the Telecommunications Act, and not Title II. Section 706 enables the FCC to "encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans" [2]  The FCC would have had a better chance at success had they classified carriers under Title II to begin with. Here's hoping that, with nothing to lose, Obama can lead them towards this rational policy goal.

Obama explaining his net neutrality approach



Senator Ted Cruz (R-TX) responds

To attempt to impose a full-blown Title II regime now, when the classification of cable broadband has always been as an information service, would reverse nearly a decade of precedent, including findings by the Supreme Court that this classification was proper.
Comcast responds 

[1] http://cyberlaw.stanford.edu/blog/2014/11/sound-policy-based-strong-legal-foundation-my-response-president-obamas-net-neutrality
[2] Telecommunications Act 1996 (United States), s706 (http://transition.fcc.gov/Reports/tcom1996.txt) 


Wednesday, 29 October 2014

FCC Chair proposes a huge blow to vested cable interests in the US

FCC Chairman, Tom Wheeler, has recently proposed a change in the law that would have the effect of requiring cable television providers to on sell their programming to anyone who also wanted to deliver such content into the homes of viewers. This would include operators like Netflix and Apple (if they ever built an Apple TV ecosystem).

In a blog post, Wheeler outlined the history of mandated selling of content to third parties in the satellite industry:
"In 1992 Congress realized that the then-nascent satellite industry would have a hard time competing because much cable programming was owned by cable companies who frequently kept it from competitors.  Congress mandated access to cable channels for satellite services, and competition flourished.  Today I am proposing to extend the same concept to the providers of linear, Internet-based services; to encourage new video alternatives by opening up access to content previously locked on cable channels."
The change in law operates by broadening the definition of 'multichannel video programming distributor' (MVDP) to include those who use the internet to deliver content (or any other method; the proposed change is technology neutral). This would allow over the top providers to negotiate with the cable companies to acquire the rights to stream/broadcast content on their own systems, thereby navigating around the exclusive and vested content interests that have historically plagued any new entrant to this entrenched market.

Nilay Patel, from the Verge, wrote this morning that:
"This proposal is also in part a reaction to the ongoing struggle of Aereo, which was effectively ruled to be a cable company by the Supreme Court but hasn't actually been able to negotiate for content like cable companies, thus leading to what may well be the company's end. Aereo actually filed a letter with the commission earlier this month urging it to take these very steps.:
Aereo (and our recent writings on the topic) aside, if the proposed rule change passes, it would reduce the barriers to entry in a marketplace that has, in many ways, failed to provide innovative solutions to consumers who have shown they are willing to find the content they want, by whatever means, legal or not.

Cablevsphone2

[Image] the Verge, the Internet is Fucked (but we can fix it)

Thursday, 26 June 2014

Aereo is dead. In its place: judicially-sanctioned innovation.

In a recent ruling, the Supreme Court of the United States found that Aereo, Inc. (Aereo), a cloud-based receiver, recorder and re-transmitter of free-to-air television, had through its operations breached the copyright that subsists in a broadcast; that is, the exclusive rights held by the free-to-air television broadcasters.

By way of background, Aereo launched in New York in early 2012 (see our coverage from then) and has been the subject of several court battles  Around the same time, a collection of broadcasters filed for injunctive relief prior to its launch and lost. In April 2013, the US Second Circuit Court of Appeals held that Aereo was operating within the bounds of the legislation. The action was brought by Fox, PBS, Universal and others. In a 2-1 decision in favour of Aereo, Judge Droney's commented that:
"It is beyond dispute that the transmission of a broadcast TV program received by an individual’s rooftop antenna to the TV in his living room is private, because only that individual can receive the transmission from that antenna, ensuring that the potential audience of that transmission is only one person. Plaintiffs have presented no reason why the result should be any different when that rooftop antenna is rented from Aereo and its signals transmitted over the internet: it remains the case that only one person can receive that antenna’s transmissions."[1]
In the months that followed the decision, Aereo sought to aggressively expand into new markets by announcing pending launches in Atlanta, Boston, Miami, Houston and Dallas.  Finally, in October 2013, the television broadcasters petitioned the US Supreme Court to hear the decision which it agreed to in January 2014. The broadcasters were eventually joined by the White House who submitted that Aereo was breaching federal law by operating its service.

On 25 June 2014, in a 6-3 ruling (Justice Scalia dissenting - joined by Thomas and Alito JJ), the Supreme Court found against Aereo. At the hear of the decision was whether or not Aereo, in operating its service, was communicating a broadcast to the public, in violation of the exclusive rights held by the broadcasters. In referencing past decisions of a similar nature, the Court stated that:
"...a user’s involvement in the operation of the provider’s equipment and selection of the content transmitted may well bear on whether the provider performs within the meaning of the Act. But given Aereo’s overwhelming likeness to the cable companies targeted by the 1976 amendments, this sole technological difference between Aereo and traditional cable companies does not make a critical difference here." [2]
Despite this finding, Aereo (to which Scalia J et al agreed) that:
"one particular difference between Aereo’s system and the cable systems at issue in Fortnightly and Teleprompter. The systems in those cases transmitted constantly; they sent continuous programming to each subscriber’s television set. In contrast, Aereo’s system remains inert until a subscriber indicates that she wants to watch a program.Only at that moment, in automatic response to the subscriber’s request, does Aereo’s system activate an antenna and begin to transmit the requested program.This is a critical difference, says the dissent. It means that Aereo’s subscribers, not Aereo, “selec[t] the copyrighted content” that is “perform[ed],” post, at 4 (opinion of Scalia, J.), and for that reason they, not Aereo, “transmit”the performance. Aereo is thus like “a copy shop that provides its patrons with a library card.” [3]
The response of the majority to this point raises serious concern about technological innovation and it's ability to resist the disconnected logic of the courts as evidenced in this case:. Speaking for the majority:


"We do not see how this single difference, invisible to subscriber and broadcaster alike, could transform a system that is for all practical purposes a traditional cable system into “a copy shop that provides its patrons with a library card.” [4]
The continuing evolution of technological innovation is beautiful in it's ability to utilise new methods or mechanisms to achieve the same outcome by different means.  For example, the overland copper cable and the cellular telephone both facilitate communication between individual, but by vastly different means.  The end users arguably place a greater emphasis on the underlying value of the communication than the means by which it is communicated.  How then, should a 'single difference, invisible to the subscriber' serve to poison the ability of technological innovation, in the case of Aereo, to provide a similar outcome via an improved delivery mechanism.

The minority accpeted that Aereo's architecture meant that performance occurred with the only outstanding question being whether "those performances are a result of Aereo's volitional conduct."[5]


Guilt by resemblance
"The Court’s conclusion that Aereo performs boils down to the following syllogism: (1) Congress amended the Act to overrule our decisions holding that cable systems do not perform when they retransmit over-the-air broadcasts;4 (2) Aereo looks a lot like a cable system; therefore (3) Aereo performs. That reasoning suffers from a trio of defects." [6]
 This post represents, with substantial accuracy, the decision of the majority.  Scalia J makes no qualms about calling his colleagues out in their misapplication of the Copyright Act to Aereo:
"I conclude, as the Court concluded in Sony: “It may well be that Congress will take a fresh look at this new technology, just as it so often has examined other innovations in the past. But it is not our job to apply laws that have not yet been written. Applying the copyright statute, as it now reads, to the facts as they have been developed in this case, the judgement of the Court of Appeals must be [affirmed].” [7]
You can hardly blame the broadcasters for bringing the action.  Where Aereo represented a potential litmus test for the validity of their retransmission fee collections, to commence proceedings against a start-up (notwithstanding the relatively well financed backers of Aereo) is fear manifested. Those broadcasters could have seen the wider distribution of their content by other means as an opportunity to expand their reach, find new eyes for advertising and even enter into agreements with Aereo for the rich data that would have inevitably arisen out of a new delivery mechanism.  Instead, the victory today represents the captured opportunity of those broadcasters who have exploited the latency gap between progress and policy.  Scalia J was right in finding that Congress is charged with the responsibility of drafting legislation to bridge this gap.  The majority, in stretching the queen-sized law onto a king-sized bed have only made the course for judicially sanctions innovation less clear for the rest of us.

[1] Judge Christopher Droney, Second Circuit Court of Appeals, Docket Nos. 12-2786-cv, 12-2807-cv 
[2] http://www.supremecourt.gov/opinions/13pdf/13-461_l537.pdf page 14
[3] http://www.supremecourt.gov/opinions/13pdf/13-461_l537.pdf page 14
[4] http://www.supremecourt.gov/opinions/13pdf/13-461_l537.pdf page 14
[5] http://www.supremecourt.gov/opinions/13pdf/13-461_l537.pdf  page 28
[6] http://www.supremecourt.gov/opinions/13pdf/13-461_l537.pdf  page 29
[7] http://www.supremecourt.gov/opinions/13pdf/13-461_l537.pdf  page 35

Tuesday, 4 March 2014

Telstra's David Thodey and the preferential treatment of internet content

The Sydney Morning Herald recently reported on Telstra's regional infrastructure engagements with Optus and the ACCC.  Perhaps of greater importance was the reference to net neutrality (or lack thereof) in Australia:
(Thodey) also called on the ACCC to allow Telstra and other telcos to strike deals that allow preferential broadband speeds for over-the-top players such as Skype and WhatsApp, who are willing to pay a premium.  US telecommunications providers AT&T, Verizon and Comcast have all made similar agreements in recent months, and Optus is set to trial such services later this year.  But the ACCC has previously been wary of any agreement that allows telecommunications networks to favour one type of content over another. 
"If I want to do a special arrangement with Google, then that's a commercial decision I make," Mr Thodey said. "As long as you, the consumer, know that, it should be fine. "I think it'd be fair [if Telstra had a deal with Google that gave its users better mobile network quality than Facebook's] ... because that's a commercial decision."
Telecommunications infrastructure has long been regarded as a public utility - especially in Australia with its distributed population that the tempts telcos to only roll out infrastructure in densely populated areas.  In the same way that the public are often guaranteed a uniform standard of service regardless of their geography, so too should the public be confident in their choice of content.  The internet is, and should be, the level playing field upon which David can slay Goliath.  It represents the space where an immature upstart can unseat the incumbent industry champion by simply offering a better, cheaper and/or simpler service. 

The ACCC would discourage innovation by allowing Thodey (and in turn, Australian industry) to place commercial considerations above these founding principles.  It may be a commercial decision to be made by the owners of infrastructure, but its the same founding principles that allow citizens to drive any make of car down a privately owned toll-road.

Wednesday, 26 February 2014

Read: The Internet is Fucked

Insightful and considered piece from Nilay Patel at The Verge on the nature of the internet as a utility and how the FCC has failed to protect consumer interests, including this gem:
"The Federal Communications Commission is ostensibly in charge of managing broadband deployment and regulating companies like AT&T and Comcast, but it’s shown no actual ability to do so in a focused and effective way — and when it tries, it does so in such a half-assed way that it gets smacked around in court and loses."[1]
[1] http://www.theverge.com/2014/2/25/5431382/the-internet-is-fucked 

Thursday, 20 February 2014

FCC to have a second attempt at net neutrality laws

In the wake of the US Court of Appeal's recent ruling against the FCC and its net neutrality regulations, the federal communications regulator has expressed a desire to have a second go.   FCC Chairman, Tom Wheeler, has stated:
In its Verizon v. FCC decision, the (Court) invited the Commission to act to preserve a free and open Internet. I intend to accept that invitation by proposing rules that will meet the court’s test for preventing improper blocking of and discrimination among Internet traffic, ensuring genuine transparency in how Internet Service Providers manage traffic, and enhancing competition. Preserving the Internet as an open platform for innovation and expression while providing certainty and predictability in the marketplace is an important responsibility of this agency.[1]
Jean-Baptiste-Siméon Chardin, The House of Cards, 1736-3
Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such.[3]  Hopefully, in drafting the new regulations, the FCC won't make the same mistake of classifying broadband providers as information services instead of common carriers, like traditional telephony service providers.  

In drafting the Open Internet Order (the regulation which was the subject of the Court's examination), the FCC relied on section 706 of the Telecommunications Act which provides that the FCC shall "encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans" [2]  In response to this reliance, the Court stated that:
That said, even though the Commission has general authority to regulate in this arena, it may not impose requirements that contravene express statutory mandates. Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such.
Reuters is reporting that the new rules will probably be finished in May or June this year.[4]

[1] http://www.fcc.gov/document/statement-fcc-chairman-tom-wheeler-fccs-open-internet-rules
[2] Telecommunications Act 1996 (United States), s706 (http://transition.fcc.gov/Reports/tcom1996.txt) 
[3] http://www.cadc.uscourts.gov/internet/opinions.nsf/3AF8B4D938CDEEA685257C6000532062/$file/11-1355-1474943.pdf (see page 4)
[4] http://www.reuters.com/article/2014/02/19/us-usa-fcc-internet-idUSBREA1I1H820140219
[Image]: Jean-Baptiste-Siméon Chardin, The House of Cards, 1736-3, public domain, reproduced from Wikimedia Commons



Saturday, 11 January 2014

US Supreme Court agrees to hear broadcasters in their final fight against Aereo

Today the United States Supreme Court granted a writ of certiorari (agreeing to hear a decision from a lower court) in respect of several broadcasters and their ongoing claim against Aereo, Inc. for copyright infringement of their television broadcasts.

As we've previously covered, Aereo operates a content delivery mechanism whereby a single antenna is allocated to each user in an attempt to circumvent (or operate wholly within - depending on your point of view) US copyright law with respect to television broadcasts.

No date has been set for the hearing.  

[Image] public domain image by Daderot

Wednesday, 27 November 2013

Creative Commons hits 4.0

Creative Commons, the copyright licensing regime originally designed to allow smaller content creators to more effectively license their work, has hit its fourth iteration. With the newest advancement, the Creative Commons regime accounts for database rights in the European Union and attempts to deal with the automatic revocation mechanism of earlier iterations.  For example, we've used it to reproduce this photograph taken by Stijn Hosdez.

In brief, Creative Commons is a legal framework that creates predefined content licenses and was established in 2001 by Hal Abselson, Lawrence Lessig and Eric Eldred.  The problem that Creative Commons attempted to fix was the potentially burdensome and expensive process of content licensing by individual agreement.  Instead of executing a licence agreement with individuals licensees, content owners could specify the terms of use for each article of content.

So, what's changed?

Sui generis database rights

The EU recognises that database compilations can be protected by sui generis property rights (but in contrast to other forms of copyright protection, databases are only protected for 15 years), where in other parts of the world a compiled database is essentially viewed as a compilation of facts; which on their own and in compiled form, cannot attract protection under law.  

The new Creative Commons 4.0 includes in the definition of copyright sui generis database rights (as set out in Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 and in related texts in other parts of the world).  In the Australian context, the creativity test in IceTV v Nine Network still stands as the defining characteristic of copyright.  There are no such sui generis property rights for database compilations in Australia.

Mechanisms for the reclaiming of rights lost automatically

Under 3.0, a breach of a term of a Creative Commons licence meant that the original grant was automatically revoked in respect of that end user.  Under 4.0, inadvertent breaches that are rectified within a timely manner may result in the resumption of rights granted to the end user.

The full press release is available at the Creative Commons website.

[Image] Creative Commons BY-NC-ND 2.0/Stijn Hosdez/Flickr (how timely...)

Friday, 5 July 2013

The evolution of live streaming

This article originally appeared in Vol 32, Issue 2 of the Communications Law Bulletin and has been re-republished here with permission from the CLB.   The article may be cited as: Matthew Tracey, 'The evolution of live streaming' (2013) 32(2) Communications Law Bulletin 11

The views are solely those of the author, Matthew Tracey.

1.                 Introduction

Free to air television has traditionally generated revenue for the broadcasters through advertising and retransmission by subscription television.  This model has been reliably protected through the copyright that subsists in a broadcast and the exclusive rights allocated to the broadcaster that allow them to charge third parties for access. 

The market for online content has risen exponentially in recent years as the proliferation of bandwidth and portable devices can provide high-quality transmission for more people in more places.  The precise boundaries of the copyright that subsists in a television broadcast have been tested recently in three different countries.  Accordingly, the owners of those exclusive rights have had their future profitability challenged by new technological models.  The article will examine the extent to which system architecture has defined the legality of three online free-to-air television streaming services: Optus' TVNow in Australia, TVCatchup in the United Kingdom and Aereo in the United States.

2.                 Optus

Optus, the number two telecommunications provider in Australia, launched 'TVNow' in late 2011. TVNow allowed Optus customers to instruct Optus servers to record live free-to-air television and store the contents in the cloud.  TV Now operated as a personal video recorder in a closed IP environment.  At the time of its launch, Optus made it clear that playback of the recorded content is on a one-to-one basis and is not 'broadcasting.'  The TVNow service could be used to view broadcast television including sports that were available on the free-to-air channels.

The National Rugby League (NRL) and the Australian Football League (AFL), as the rights holders in their respective sporting codes, granted an exclusive licence to Telstra for the right to stream iive NRL and AFL matches on its BigPond service.  The NRL, AFL and Telstra subsequently brought proceedings against Optus in the Federal Court of Australia for breach of copyright in a broadcast.  Rares J, at first instance, found that the recordings were made by the subscriber not Optus and fell within an exception to time-shift recording under section 111 of the Copyright Act 1968 (Cth) (the Australian Copyright Act) which allows a person to make a recording of a broadcast for private and domestic use by watching it at a more convenient time; also known as time-shifting. 

On appeal to the Full Federal Court, the Rares J's decision was overturned as the Court found that the recording was made jointly by Optus and the subscriber and the s111 exception was not applicable.  In a joint judgment of the Full Federal Court, Finn, Emmett and Bennett JJ found that:
"we consider that Optus’ role in the making of a copy – ie in capturing the broadcast and then in embodying its images and sounds in the hard disk – is so pervasive that, even though entirely automated, it cannot be disregarded when the “person” who does the act of copying is to be identified."[1]
The High Court of Australia refused Optus' leave for an appeal.
In the wake of the Full Federal Court's decision, Optus has urged the Australian Law Reform Commission to amend the Australian Copyright Act so as to facilitate the sharing of copyright material amongst different technology devices and platforms:
'It is important to ensure third parties that merely provide the essential connectivity between creators and users are not inadvertently caught on the wrong side of the law by virtue of activities that should not be properly considered as infringing upon right holders' interests.''[2]
The Optus decision in the Full Federal Court is focussed more on the recording of the broadcasting by Optus (or Optus and the subscriber jointly) than on the communication of that recorded broadcast to the public.  This is in part due to the defence available under s111 of the Australian Copyright Act that Optus submitted should apply to the service.  The trial judge, Rares J, concluded with some brevity that the TVNow service did not constitute a communication to the public where the recording was requested by an individual and viewed by that individual for their private purposes.  Despite this, the Full Federal Court's focus on the recording (as opposed to the subsequent communication) of the broadcast meant that this issue wasn't explored fully on appeal.

3.                 TV Catchup

TVCatchup, a service offering live steaming of free-to-air television to UK residents, was found to have breached copyright in a broadcast.  TVCatchup encoded separate streams for each of its users and only provides those streams to people in the UK who hold a valid TV licence - that is, those people who would otherwise be able to view the free-to-air broadcast. 

The claim was initially commenced in the UK High Court of Justice (HCJ) by ITV, Channel 4 and Channel 5.  The HCJ considered the nature of the TVCatchup service in light of EU and UK law.  Specifically, the Copyright, Designs and Patents Act 1988 (UK) (the UK Copyright Act) and recital 23 in the preamble to Directive 2001/29 of the European Parliament and of the Council (the EU Directive):
This Directive should harmonise further the author’s right of communication to the public. This right should be understood in a broad sense covering all communication to the public not present at the place where the communication originates. This right should cover any such transmission or retransmission of a work to the public by wire or wireless means, including broadcasting. This right should not cover any other acts.[3]
The High Court of Justice found that while copyright subsists in a television broadcast, it was unclear whether the right of communication to the public was breached in a case where a person would otherwise lawfully be able to view the broadcast and the effect of the one-to-one nature of TVCatchup's service on existing law.  In light of this uncertainty, the HCJ referred the matter to the Court of Justice of the European Union (CJEU).

Not unlike Optus' TVNow service, TVCatchup relied on their technical architecture to the extent that they claimed they were not communicating to the public a broadcast in which the copyright was owned by the broadcaster.  The CJEU ultimately found that, despite their system design, TVCatchup was communicating the broadcast to the public in breach of the broadcaster's exclusive rights.

In their defence, TVCatchup relied on two distinct points: one for the broadcast of public service channels and one for the broadcast of digital channels.  In respect of the public service channels, TVCatchup successfully argued that re-transmission of Channel 3, Channel 4 and ITV was a cable service under s73 of the UK Copyright Act which allows cable operators to re-transmit those channels without a licence.  In respect of the digital channels, TVCatchup contended that their service 'is merely a technical means to ensure or improve reception of the terrestrial television broadcast in its catchment area.'[4]  The CJEU acknowledged that a technical intervention that was restricted only to the improvement of reception was not a communication within the meaning of the EU Directive.[5]  Ultimately, the CJEU rejected this defence in stating that 
'the intervention of such a technical means must be limited to maintaining or improving the quality of the reception of a pre-existing transmission and cannot be used for any other transmission.'[6]
The technical architecture of the service was designed in order to avoid a communication to the public at large by implementing a one-to-one transmission mode.  However, the CJEU focused more closely on the service as a whole (and not the individual transmissions) in finding that the service was communication to the public.  In doing so, they highlighted the general nature of the term 'public':
In the second place, in order to be categorised as a ‘communication to the public’ within the meaning of Article 3(1) of Directive 2001/29, the protected works must also in fact be communicated to a ‘public’.  In that connection, it follows from the case-law of the Court that the term ‘public’ in Article 3(1) of Directive 2001/29 refers to an indeterminate number of potential recipients and implies, moreover, a fairly large number of persons.  As regards that last criterion specifically, the cumulative effect of making the works available to potential recipients should be taken into account. In that connection, it is in particular relevant to ascertain the number of persons who have access to the same work at the same time and successively.  In that context, it is irrelevant whether the potential recipients access the communicated works through a one-to-one connection. That technique does not prevent a large number of persons having access to the same work at the same time. (emphasis added )[7]
The CJEU decision is an interpretation of EU law as requested by the HCJ.  The answers will now inform the HCJ in reaching its final decision.  However, as the HCJ did not refer the question of whether TVCatchup's operations fell within the s73 re-transmission exception of the UK Copyright Act, it appears that TVCatchup will be free to continue to re-transmit those channels to its subscribers despite the CJEU ruling.

4.                 Aereo

Aereo extends the TVCatchup and Optus technical model further by allocating each subscriber their own individual antenna.  Aereo operates out of a warehouse in Brooklyn, New York where they house thousands of small antennas with a diameter of a few centimetres.  Each Aereo subscriber rents an individual antenna that receives free to air television which is streamed live to the subscriber from an individual PVR.  Aereo has maintained that the nature of the legal relationship with its subscribers is in the form of a licence to use the antenna and DVR services and not the underlying content.  In practical terms, the Aereo model operates as a regular television except with a very long cable between the antenna that receives the broadcast and the screen that displays the content. 

Aereo streams broadcast television captured by its antennas which means only local content is included.  Aereo restricts its subscribers to those with a New York address but has recently announced plans to expand to New Jersey, Connecticut and Pennsylvania.  Earlier this year, after the completion of a US$38m funding round, Aereo announced that it would later expand its service to 22 more cities including Miami, Boston, Washington DC and Salt Lake City.

In July 2012, several networks including Fox, NBC and PBS sought an injunction from the United States District Court for the Southern District of New York to stop Aereo from streaming broadcasts to its subscribers.  Nathan J denied the application of the broadcasters who then appealed the decision to the Second Circuit Court of Appeal.  In April 2013, the Second Circuit affirmed the decision of Judge Alison Nathan in a 2-1 decision (Judge Denny Chin dissenting) thereby allowing Aereo to continue operation.  The Second Circuit Court of Appeal relied on an earlier 2008 decision involving subscription television provider Cablevision[8] where public broadcast was considered by the Court.  In following the precedent, the Second Circuit has further entrenched Aereo's legal foundation to work within the bounds of the US Copyright Act within the geographic boundaries of the Second Circuit.

Judge Christopher Droney's comments below highlight the importance of Aereo's multiple antenna model:
"It is beyond dispute that the transmission of a broadcast TV program received by an individual’s rooftop antenna to the TV in his living room is private, because only that individual can receive the transmission from that antenna, ensuring that the potential audience of that transmission is only one person. Plaintiffs have presented no reason why the result should be any different when that rooftop antenna is rented from Aereo and its signals transmitted over the internet: it remains the case that only one person can receive that antenna’s transmissions."[9]
A competitor to Aereo, aptly named Aereokiller, has been the subject of a similar claim by television broadcasters.  However, the application has been made in the Ninth Circuit of California where the court was not bound by the Second Circuit ruling in respect of Aereo.  Judge George Wu, in awarding the injunction, stated that:
"Second Circuit law has not been adopted in the Ninth Circuit, and this Court would find that the Ninth Circuit’s precedents do not support adopting the Second Circuit’s position on the issue. Instead, the Court would find that Defendants’ transmissions are public performances, and therefore infringe Plaintiffs’ exclusive right of public performance."[10]
Aereo has publically stated they are using a 'phased' approach to expansion so the Ninth Circuit ruling may not affect their expansion plans yet.  However, a negative ruling in the Ninth Circuit could restrict revenue opportunities for any live streaming entity given the large territory of that jurisdiction.

In April 2013, Fox and CBS have publically stated that they would consider withdrawing their broadcast from public airways and switch to a subscription only model.[11]  It appears that the broadcasters would be wary of subscription television providers, who currently pay large fees for retransmission rights, implanting a similar technical model to Aereo in order to retransmit for free the content they previously were paying for. 

In May 2013, the CEO of Time Warner Cable, Glenn Britt, told the Washington Post that: "what Aereo is doing to bring broadcast signals to its customers is interesting" and "if it is found legal, we could conceivably use similar technology."[12]  Also in May 2013, ABC announced that they would be making their broadcasts available on mobile devices free-of-charge to individuals that already subscribe to a pay television service.  This appears to serve two ends: first, it provides a competitive service to Aereo and for free (provided the user is a subscriber to a pay television service already) and second:  it aims to familiarise end users with mobile streaming of free-to-air television ahead of any attempt by pay television operators to offering the same free-to-air television broadcast content via an 'Aereo-type' model.

5.                 Conclusion

In reviewing the judgments of the various courts around the world, the key point of difference lies in their interpretation of what it means to communicate to the public.  The CJEU found that the architecture of the TVCatchup service was largely immaterial and noted that "it is irrelevant whether the potential recipients access the communicated works through a one-to-one connection.  That technique does not prevent a large number of persons having access to the same work at the same time."[13]  Conversely, the US Second Circuit Court of Appeals found that despite many people having access to the same transmission at the same time, "it remains the case that only one person can receive that antenna’s transmissions."[14]  While the Full Federal Court of Australia didn't directly opine on whether TVNow constituted a communication to the public, the decision at first instance appears to align more close with Aereo than TVCatchup.

It is clear that the courts are limited in their power to provide a solution to this problem.  The problem, in this author's opinion, is that the justification used by the courts to allow or restrict live streaming is based upon legislation that did not contemplate providing television over a delivery mechanism that differs from traditional broadcasting.  In each case, the solution lies with legislative change to give certainty to all interested parties.  As the High Court drew out in Australian Education Union v Department of Education and Children’s Services, a court must not adopt 
"a judicially constructed policy at the expense of the requisite consideration of the statutory text and its relatively clear purpose. In construing a statute it is not for a court to construct its own idea of a desirable policy, impute it to the legislature, and then characterise it as a statutory purpose."[15]
The spread of information, culture and entertainment, in whatever form, should not rest upon such a fragmented and fragile foundation.  There remains some hope that the ALRC's report on the inquiry into Copyright and the Digital Economy, due out in November 2013, will guide the legislature in solving these problems.



[1] National Rugby League Investments Pty Limited v Singtel Optus Pty Ltd [2012] FCAFC 59 at paragraph 67.
[2] Optus submission to the Copyright and Digital Economy Issues Paper, Australian Law Reform Commission, November 2012, http://www.alrc.gov.au/sites/default/files/subs/183._org_optus.pdf.
[3] ITV Broadcasting and ors v TVCatchup Ltd (2013) European Court of Justice C607/11, para 3.
[4] Ibid 27.
[5] see to that effect, Football Association Premier League and Others v QC Leisure and Others (C-403/08) paragraph 194 and Airfield and Canal Digitaal v Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (Sabam) (C-431/09) paragraphs 74 and 79.
[6] ITV Broadcasting and ors v TVCatchup Ltd (2013) European Court of Justice C607/11, para 29.
[7] Ibid 31.
[8] Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2nd Cir. 2008).
[9] WNET, Thirteen v. Aereo, Inc.; Am. Broad. Cos., Inc. v. Aereo, Inc. (2nd Cir. 2013) 12-2786 p29.
[10] NBC Universal Media, LLC, et al. v. Barry Driller, Inc., et al. (9th Cir. 2012) 12-6950 p3.
[11] New York Times, Aereo has TV Networks Circling the Wagons, 10 April 2013.
[12] The Washington Post, Time Warner Cable CEO wants to slim cable bundles, eyes Aereo’s technology, 3 May 2013.
[13] ITV Broadcasting and ors v TVCatchup Ltd (2013) European Court of Justice C607/11, para 31.
[14] WNET, Thirteen v. Aereo, Inc.; Am. Broad. Cos., Inc. v. Aereo, Inc. (2nd Cir. 2013) 12-2786 p29.
[15] Australian Education Union v Department of Education and Children’s Services [2012] HCA 3 at [28].




Tuesday, 2 April 2013

US Second Circuit Court of Appeals: Aereo is A-okay

Rabbits, being the providers of chocolate and television antennas, continue to remain popular this Easter in the wake of a recent decision by the United States Second Circuit Court of Appeals.

In our last post, we examined a recent decision of the European Court of Justice that declared TVCatchup Ltd breached copyright in a broadcast by streaming online free to air television to UK residents.  Not unlike Optus' TVNow service, TVCatchup relied on their technical architecture to the extent that they thought they were not communicating to the public a broadcast in which the copyright was owned by the broadcaster.  The ECJ ultimately found that, despite their system design, TVCatchup was communicating the broadcast to the public in breach of the broadcaster's exclusive rights.

Enter Aereo...  We first examined this plucky start-up in November 2012.  In essence, Aereo takes the TVCatchup model and extends its one-to-one model further up the technical design.  With Aereo, each subscriber rents an individual antenna that receives free to air television which is streamed live to the subscriber.  Aereo has maintained that the nature of the legal relationship with its subscribers is in the form of a licence to use the aerial and DVR services and not the underlying content.  

The action was brought by Fox, PBS, Universal and others.


The decision was 2-1 in favour of Aereo, with Judge Droney's comments highlighted below:

It is beyond dispute that the transmission of a broadcast TV program received by an individual’s rooftop antenna to the TV in his living room is private, because only that individual can receive the transmission from that antenna, ensuring that the potential audience of that transmission is only one person. Plaintiffs have presented no reason why the result should be any different when that rooftop antenna is rented from Aereo and its signals transmitted over the internet: it remains the case that only one person can receive that antenna’s transmissions.[1]
The judgment in full can be found here.

[1] Judge Christopher Droney, Second Circuit Court of Appeals, Docket Nos. 12-2786-cv, 12-2807-cv
[Image] hillman54 via Creative Commons licence

Friday, 8 March 2013

First Optus, now TVCatchup: EU outlaws FTA streaming service

The retransmission of live television continues to fall foul of courts this week as TVCatchup, a UK service offering live steaming of free-to-air television to UK residents, was found to have breached copyright in a broadcast.  English law provides that copyright subsists in a broadcast.  TVCatchup encodes separate streams for each of its users and only provides those streams to people in the UK who hold a valid TV licence - that is, those people who would otherwise be able to view the free-to-air broadcast.  

The claim was initially commenced in the UK High Court of Justice (HCJ) by ITV and others.  The Court considered the nature of the TVCatchup service in light of EU and UK law.  Specifically, the Copyright, Designs and Patents Act 1988 (UK) and recital 23 in the preamble to Directive 2001/29:

This Directive should harmonise further the author’s right of communication to the public. This right should be understood in a broad sense covering all communication to the public not present at the place where the communication originates. This right should cover any such transmission or retransmission of a work to the public by wire or wireless means, including broadcasting. This right should not cover any other acts. [1]
The High Court of Justice found that while copyright subsists in a television broadcast, it was unclear whether the right of communication to the public was breached in a case where a person would otherwise lawfully be able to view the broadcast and the effect of the one-to-one nature of TVCatchup's service on existing law.  In light of this uncertainty, the HCJ referred the matter to the The European Court of Justice (ECJ).

The ECJ ruled that that TVCatchup was in breach of copyright in a broadcast because the service involved a communication to the public.  The technical architecture of the service was designed in order to avoid a communication to the public at large by implementing a one-to-one transmission mode.  However, the ECJ focused more closely on the service as a whole (and not the individual transmissions) in finding that the service was communication to the public.  In doing so, they highlighted the general nature of the term public:
In the second place, in order to be categorised as a ‘communication to the public’ within the meaning of Article 3(1) of Directive 2001/29, the protected works must also in fact be communicated to a ‘public’.  In that connection, it follows from the case-law of the Court that the term ‘public’ in Article 3(1) of Directive 2001/29 refers to an indeterminate number of potential recipients and implies, moreover, a fairly large number of persons.  As regards that last criterion specifically, the cumulative effect of making the works available to potential recipients should be taken into account. In that connection, it is in particular relevant to ascertain the number of persons who have access to the same work at the same time and successively.  In that context, it is irrelevant whether the potential recipients access the communicated works through a one-to-one connection. That technique does not prevent a large number of persons having access to the same work at the same time. (emphasis added) [2]

The TVCatchup decision is a further blow to the retransmission of live television.  In the wake of the Optus decision in Australia and TVCatchup in Europe, we turn our heads to Aereo in the United States who has implemeted a live streaming model whereby end-users rent a single antenna on the roof of Aereo HQ.  Will this model stand up to the DCMA?

[1]:  European Court of Justice, ITV Broadcasting and ors v TVCatchup Ltd (2013) C‑607/11, para 3.
[2]: European Court of Justice, ITV Broadcasting and ors v TVCatchup Ltd (2013) C‑607/11, para 31.

Thursday, 21 February 2013

Can the legislature please tune in: PPCA v CRA in the Federal Court of Australia

The recent decision of the Full Federal Court of Australia in Phonographic Performance Company of Australia Limited v Commercial Radio Australia Limited [2013] FCAFC 11 (13 February 2013)  is a victory for statutory interpretation at the expense of further muddying the lens through which content owners and delivery agents interact in the online world.

The decision is an appeal from a single judge of the FCA that considers, essentially, whether an internet stream of a radio program falls within the definition of a broadcast service under a licence agreement between the Phonographic Performance Company of Australia (PPCA) and Commercial Radio Australia (CRA).  

In coming to their conclusions, their Honours examined and then dispensed with extrinsic material (such as parliamentary reports) and instead relied on the definition of broadcast service in light of the purpose of the Broadcasting Services Act 1992 (Cth).  The definition is somewhat complex as it allows for the Minister, by determination, to exclude certain services from the definition of a broadcast service.  Further, a determination issued in September 2002 contains an exemption to the exclusion.

In short, the definition of a broadcast service is:
  • (BSA definition) a service that delivers radio programs to persons have equipment appropriate for receiving that service whether the delivery uses the radiofrequency spectrum, cable, optical fibre, satellite or any other means or a combination of those means, but does not include:
    • a service (including a teletext service) that provides no more than data, or no more than text (with or without associated still images); or
    • a service that makes programs available on demand on a point-to-point basis, including a dial-up service; or
    • (BSA exception) a service that the Minister determines not to fall within the definition:
      • (2002 determination) a service that makes available television programs or radio programs using the Internet, other than:
        • a service that delivers television programs or radio programs using the broadcasting services bands.
By taking the above steps into account, the Court found that a broadcasting service could:
  • be delivered by the use of any means, including the broadcasting services bands;
  • be delivered or made available using the Internet; or
  • be delivered or made available using the Internet and the broadcasting services bands.
Ultimately the Court found that only the first and third bullet points above can be considered a broadcasting service within the definition of the BSA.  The licence agreement between CRA and PPCA utilises the BSA (via s10 of the Copyright Act 1968 (Cth)) for the definition of a broadcasting service.  As a result, an internet stream of a radio program does not fall within the definition of a broadcasting service and is therefore outside the scope of the licence granted to CRA.

The decision could be viewed as a victory for purposive statutory interpretation (as the Court made out that it was).  However, we are left in the unenviable position where radio programs could be delivered through the broadcasting services bands if the internet service over which it is delivered is a datacasting service [1] - albeit a small possibility.  Above all, it is an example of where the judicature is ill-equipped to address emerging technical issues that are better resolved through the contracting party.  This is by no means an attack of the courts (at first instance, on appeal or generally) or their ability to deal with and decide on technological issues.  The judicature has no business in re-drafting commercial agreements.  Rather, it applies the law as it is written to the issues before it.  

The legislature should tune into the discord that has arisen as a result of this decision:  that the regulation of content is more concerned with the method of its delivery than the nature of its content.  The CRA unsuccessfully argued that a broadcast service should not be concerned with how content reaches the listener but rather that the broadcasting service is the radio program itself.  

The CRA and the PPCA executed their licence agreement in June 2000: a period where internet streaming would not have been a major concern of either party.  In the thirteen years since the ink has dried, internet streaming has become a popular way for listeners to access radio programs.  Presumably, the rationale of the PPCA for commencing proceedings against the PPCA was the increasing popularity of radio streaming on the internet and the potential to extract additional licence fees from the CRA (especially where previous attempts have been somewhat successful).

So where are we left?  I would expect the CRA to consider an appeal to the High Court.  However, I doubt that they would be successful.  Even if the CRA loses an appeal, the consideration of the case by the High Court may place additional pressure on the legislature to consider how the definition of a broadcasting service is equipped to handle a converged media and technological environment.


[1] See Karl Schaffarczyk's helpful analysis at The Conversation