Cablevision Appeals DVR Court Ruling

Cablevision Systems Corp. said Tuesday it is filing an appeal of a recent federal district court ruling that barred the company from rolling out a network-based DVR service.

A group of Hollywood studios and broadcast networks had filed suit last May to prevent the cable operator from launching the service, claiming the offering, which would store video on servers in the cable giant’s network, violated copyright laws. The U.S. District Court of Manhattan ruled in their favor last month.

Cablevision plans to seek expedited review of its appeal, citing what it alleges is the district court’s “misapplication of modern copyright law to remote-storage DVR,” with potentially broader negative implications for technological innovation and the consumer benefits of remote-storage DVR. The company said the appeal will be heard by the 2nd U.S. Circuit Court of Appeals.

“We continue to believe strongly that remote-storage DVR is permissible under current copyright law and offers significant benefits to consumers, including lower costs and faster deployment of this popular technology to our digital cable customers,” Tom Rutledge, Cablevision’s COO, said in a statement.

The service portends to obviate the need for DVRs offered by consumer electronics companies and offered in packages by companies such as TiVo Inc. Cablevision’s efforts will be watched by cable operators that have expressed interest in network DVR service and have voiced support for the company.

“Our remote-storage DVR is the same as conventional DVRs, and merely enables consumers to exercise their well-established rights to time-shift television programming,” Rutledge said. “The technological innovation behind our remote-storage DVR makes a popular product even better. It does not alter the relationship between our customers and the programming they choose to record and simply stores programming recorded by consumers in a central location.”

A network-based approach stands as a technology that could radically change pricing metrics, advertising and content distribution on video networks, according to an ABI Research report released last fall. Once the technology is proven and content providers sign on, it will help to fuel the overall DVR market, which will grow from about 20 million subscribers in 2006 to more than 250 million in 2011, the company said.

“[The network approach] offers substantial benefits to service providers in terms of cost." said ABI Research Principal Analyst Michael Arden. "But [it] has to prove that its technology is as good as client-side DVR boxes, and it raises serious issues with some content providers, issues that they are willing to take to court."

In the meantime, telcos are looking to extend the convenience of the DVR by enabling users to control them from Web connections and mobile devices, an area that AT&T Inc. and Verizon Communications Inc. have advanced with new IPTV features.

Cablevision Systems Corp. www.cablevision.com

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