Copyright, Content Distribution And Technological Innovation: The Need To Re-Think The Compulsory Licensing System

Signs point to tensions between the laws of the past and the technology of the present and future

Not to go all chicken little on you, but the world may be coming to an end – the world of copyright and compulsory licensing as we have known it for the past several decades, that is. I’ve been following the evolution of content delivery across all platforms (including the legal systems which underlie content delivery), and have in recent months noted a recurring theme: the legal rules governing delivery of content – and audiovisual programming, especially – are falling farther and farther behind the state of the technological art. Traffic rules developed during the horse-and-buggy days don’t really help anybody in an age of superhighways and high-performance cars. So maybe it’s time for legislators and regulators to roll up their sleeves and get to work developing a copyright licensing system for the 21st Century.

Examples? How about online streaming providers ivi, Inc. and Filmon.com, who have been trying to cram the square peg notion of an “on-line cable system” into the round hole system of traditional compulsory licensing. They’re clearly outliers making long shot attempts to revolutionize television viewing. From a legal standpoint they’re still on the outside looking in, as both have been told by federal courts that they are not acting within the boundaries of the Copyright Act. Yet, as we reported on these cases, we prophesied that ivi.Inc and Filmon.com may simply be ahead of their time.

Our predictions weren’t far off the mark.

As we have since reported, at Congress’s direction the Copyright Office has instituted a proceeding that could dramatically alter the copyright compulsory licenses applicable to cable television and satellite television.  In particular, the Copyright Office is looking at the possible elimination of such licenses (which are currently found in Sections 111, 119 and 122 of the Copyright Act). 

Our call for legal reform – or at least a very thorough review of this area of law – is further buttressed by two separate, but related, developments involving one of the more popular content delivery systems going today: the Apple iPad. 

In one instance, News Corporation (let’s call them Fox for short) has told Time Warner Cable (TWC) to stop streaming the various Fox channels to the iPads of TWC subscribers. (Scripps Network Services Interactive (Scripps) has reportedly joined Fox in this effort.) TWC is apparently the first cable company to create an “app” that allows its subscribers to view programming via an iPad (Cablevision has since released a similar app with similar pushback). Seems pretty simple right? You’re a TWC subscriber, you pay TWC to provide you access to programming in your home, you would like to use your iPad to watch TV in and around your home, TWC can make that happen – where’s the problem? After all, you’re already paying to get those channels, and TWC is also paying for the right to get you those channels – so why should it matter whether you’re watching on a full TV screen or an iPad?   (This would be especially true if TWC’s app happens to include some form of geographic restriction to prevent video viewing “out of market”. Note that I don’t know whether the app does feature such a restriction.)  

But that’s not how Fox and Scripps see it – and I suspect that they’re not alone.

And there’s another instance involving an iPad App – this time the Zite news reader, which describes itself as “a personalized iPad magazine that gets smarter as you use it”. The Washington Post, AP, Gannett, Getty Images, Time, Dow Jones and many other media organizations have sent Zite a cease-and-desist letter telling it to stop providing their content.  This is admittedly different from the Fox/TWC situation, as you’re now talking about aggregation of news content regardless of subscription, which is a big problem for news entities. But, again, if there is some way to ensure that subscribers have greater access to the content they’ve paid for, you’d think that the actual manner of delivery is a minor concern, right? 

And that’s the common thread here: new, highly popular content delivery systems that don’t fit comfortably into any existing licensing scheme. And that lack of fit is not because the folks who designed the existing licensing schemes considered but rejected inclusion of the new delivery systems. Au contraire, the folks who drafted the existing copyright laws had no idea that such delivery systems would ever exist.

Now let’s be clear: I am not against – in fact I’m very much in favor of – protection of the rights of copyright owners. But I think that these cases demonstrate that the current compulsory licensing system is failing to keep up with the times. The result is resistance, induced by out-dated laws, to innovation of new products, services and technology. The results of such innovation  can deliver content from a copyright owner to the consumer and – in theory at least –  the concept of compulsory licenses is designed to facilitate the legal delivery of that content to the consuming public.  But the existing legal scheme was not designed to, and thus cannot easily accommodate, this fastest growing area of content delivery. As a result, whenever a good product is created, the content owners move quickly to restrict its easy implementation. It’s not just the iPad, but other popular products as well: think, for example, of Apple TV, GoogleTV and Roku, all of which have been hamstrung in terms of available content. 

One might, wonder, of course whether content owners fully appreciate the long-term effects of their heavy-handedness.   But I won’t go there. I recognize that they have to do everything they can to protect their most valuable asset. 

Instead, I think the finger should be pointed elsewhere – at the legislators and regulators who need to take notice of these developments and figure out a way to bring all parties together to discuss this . . . especially before the tension between antiquated laws and unstoppable technological innovation throws everything so far out of whack that it can’t be righted.  (Though I and my colleagues represent many different media entities on all sides of the equation, we are particularly concerned for broadcast television stations, since they don’t create much of their content, relying instead on networks or syndicated programming producers; I strongly believe that broadcasters would be the most likely to be cut out of any individual side deals.) 

I don’t know what the future holds for television delivery. But I am increasingly sure that TV delivery will – and should – look vastly different tomorrow than it did yesterday or than it does today. It’s in everybody’s interest – the content creators’, the content distributors’ and the content consumers’ – that the copyright laws that underlie and provide structure to the delivery process be designed to accommodate and facilitate technological innovation.

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