[Infowarrior] - SCOTUS won't block remote storage DVR system

[Richard Forno]

High court won't block remote storage DVR system

By DEBORAH YAO – 6 hours ago

http://www.google.com/hostednews/ap/article/ALeqM5huA29y1WNNqS4rykHhxbWlvPUcUAD994I0CO0

PHILADELPHIA (AP) — Cable TV operators won a key legal battle against  
Hollywood studios and television networks on Monday as the Supreme  
Court declined to block a new digital video recording system that  
could make it even easier for viewers to bypass commercials.

The justices declined to hear arguments on whether Cablevision Systems  
Corp.'s remote-storage DVR system would violate copyright laws. That  
allows the Bethpage, N.Y.-based company to proceed with plans to start  
deploying the technology this summer.

With remote storage, TV shows are kept on the cable operator's servers  
instead of the DVR inside the customer's home, as systems offered by  
TiVo Inc. and cable operators currently do.

The distinction is important because a remote system essentially  
transforms every digital set-top box in the home into a DVR, allowing  
customers to sign up instantly, without the need to pick up a DVR from  
the nearest cable office or wait for a technician to visit.

Movie studios, TV networks and cable TV channels had argued that the  
service is more akin to video-on-demand, for which they negotiate  
licensing fees with cable providers.

They claimed a remote-storage DVR service amounts to an unauthorized  
rebroadcast of their programs.

In a statement, the Copyright Alliance, whose members include  
Hollywood studios and television broadcasters, called the Supreme  
Court action "unfortunate and potentially harmful to creators and  
creative enterprises across the spectrum of copyright industries."

Cablevision argued its service was permissible because the control of  
the recording and playback was in the hands of the consumer.

Industry experts say the new technology could put digital recording  
service in nearly half of all American homes, about twice the current  
number.

"This is a tremendous victory," said Tom Rutledge, Cablevision's chief  
operating officer, in a statement. "At the same time, we are mindful  
of the potential implications for ad skipping and the concerns this  
has raised in the programming community."

Rutledge said the technology could benefit programmers and advertisers.

Cablevision, which has 3 million subscribers in the New York metro  
area, has launched targeted, interactive advertising in half a million  
households and plans to double that number by year's end. TiVo's DVR  
users already see ads when they pause or fast-forward shows.

Less clear is whether there will be savings down the road for  
consumers. Remote-storage DVR saves cable operators money because they  
don't have to invest and deploy digital set-top boxes with hard drives  
anymore, nor would they have broken machines inside homes to fix in  
person. Sanford Bernstein analyst Craig Moffett had estimated that  
DVRs account for as much as 10 percent to 15 percent of major cable's  
capital spending.

But whether those savings will trickle down to the consumer depends on  
the level of competition, expenditures by cable to deploy the new  
system and other factors. Cable operators also have to contend with  
bandwidth capacity, as shows will be transmitted to each DVR viewer  
from their central servers, instead of individual DVRs already in the  
home.

Still, it's a win for cable even though most consumers won't see much  
of a change for years, in part because there are millions of in-home  
DVRs already in use.

"It's clearly an important chapter in the history of digital  
television," said Standard & Poor's analyst Tuna Amobi. But the new  
system will take "a few years to materialize. Right now the focus is  
on trying to get up to speed and get this technology beyond the test  
phase."

Perhaps in the next decade, remote-storage DVR would start to make set- 
top boxes obsolete, he said.

At least, cable operators won't be hampered by the limits of a DVR  
hard drive. They can choose to offer more storage capacity to  
consumers whenever they wish, as they respond to competition or try to  
retain subscribers.

Amobi said satellite TV operators also are losers in the high court's  
decision because their systems don't let them offer remote-storage  
DVR. Their subscribers still have to get DVRs with hard drives and  
satellite TV companies have to continue to invest in these boxes.

In siding with Cablevision, the 2nd U.S. Circuit Court of Appeals  
overturned a lower court ruling that Cablevision, rather than its  
customers, would be making copies of programs, thereby violating  
copyright laws.

The Screen Actors Guild, songwriters, music companies, Major League  
Baseball, the National Football League and the NCAA all sided with the  
networks and studios in asking for high court review, while the Obama  
administration urged the court not to hear the case.

The case is Cable News Network v. CSC Holdings Inc., 08-448.

Shares of Cablevision were up 43 cents, or 2.3 percent, to close  
Monday at $19.29.

Associated Press writer Jesse J. Holland in Washington contributed to  
this story.