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Under a cloud of uncertainty: Legal
questions affecting Internet storage
and transmission of
copyright-protected video content

Fraida Fund, S. Amir Hosseini, Shivendra S. Panwar

Department of Electrical and Computer Engineering
NYU Tandon School of Engineering

The rapid growth of multimedia consumption has triggered
technical, economic, and business innovations that improve the
quality and accessibility of content. It has also opened new mar-
kets, promising large revenues for industry players. However,
new technologies also pose new questions regarding the legal
aspects of content delivery, which are often resolved through liti-
gation between copyright owners and content distributors. The
precedents set by these cases will act as a game changer in the
content delivery industry and will shape the existing offerings in
the market in terms of how new technologies can be deployed
and what kind of pricing strategies can be associated with them.
In this paper, we offer a tutorial on key copyright and communi-
cations laws and decisions related to storage and transmission of
video content over the Internet. We summarize legal limitations
on the deployment of new technologies and pricing mechanisms,
and explain the implications of recent lawsuits. Understanding
these concerns is essential for engineers engaged in designing the
technical and economic aspects of video delivery systems.

introduction

In North America, real time entertainment constitutes almost 69% of peak
period downstream traffic in fixed networks and 40% in mobile networks.
Netflix alone accounts for more than 36% of peak period downstream traffic
in fixed networks, with YouTube, Amazon Video, and Hulu also appearing
among the top ten peak period applications [1]. These services collectively

This paper is to appear in the IEEE Network Smart Data Pricing Special Issue, to be published
in March 2016.
©2015 IEEE. Personal use of this material is permitted. Permission from IEEE must be obtained
for all other uses, in any current or future media, including reprinting/republishing this
material for advertising or promotional purposes, creating new collective works, for resale or
redistribution to servers or lists, or reuse of any copyrighted component of this work in other
works

1

introduction

2

Figure 1: Delivery of multimedia content over the Internet involves financial
and other relationships between several key players. The specific
agreements between network service providers (Verizon, Comcast,
AT&T), content distributors (Netflix, Amazon), and content creators
(Disney, Sony) affect both the availability and pricing of multimedia
content and network services to consumers.

are both the greatest stress on current networks (and thus, the primary
contributor to costs of data delivery), and the greatest driver of demand for
network services (and thus, a key component of revenue strategy for network
service providers.)

Recent proposals to ease the impact of video traffic on networks include
smart data pricing schemes [2] involving shifting video traffic in time or
space [3, 4], better content delivery networks [5], proactive caching [6], and
peer to peer delivery [7, 8]. Some regulatory aspects of network pricing are
also well investigated (such as network neutrality [9].) However, because
most of the video traffic under consideration is copyright-protected, new
techniques must overcome additional legal and regulatory hurdles to be
applied in practice. These have been discussed in law, economics, and policy
forums, [10–12] but largely neglected in the engineering literature.

Key considerations for engineers designing technical protocols and pricing
strategies for Internet content delivery include: Where is content stored?
Who initiates the storage and/or transmission of content? What agreements
exist between the content creator, content distributor, and network service
provider? These questions are complicated by the diversity of the video
content delivered over the Internet, especially as the increasing population
of “cord cutters” opens a market for IPTV [13] or over-the-top delivery of
traditional television content over the Internet. The ecosystem of Internet
video is going to include third-party licensed video on demand, original
programming included in bundles that include broadband Internet and
video service, broadcast TV content on demand, and live TV content. These,
in turn, involve complex relationships between content creators (Disney,
Sony), content distributors (Netflix, Amazon), and network service providers
(Verizon, Comcast, AT&T) as pictured in Figure 1, with associated legal
challenges that affect engineering and pricing strategies.

This tutorial considers issues related to the Internet distribution of copy-
righted video content in the United States. We begin with a brief overview
of relevant copyright and communications legislation. Then, we discuss
selected legal challenges affecting technical and economic solutions to the

Creator of free (broadcast) contentCreator of non-free contentContent distributor (includes place shifting services)Network service providerProvider of bundled content and network servicesConsumerAccess network data pricingSponsored data,edge-network cachingLicense, revenue sharing agreementRetransmission consent, statutory licensecopyright and communications legislation in the united states

3

content delivery problem. We conclude with a discussion of the implications
for engineering future multimedia content delivery networks.

copyright and communications legislation in the united states

In the United States, the delivery of copyrighted video content over the
Internet is subject to copyright and communications law.

With respect to copyright, the 1909 Copyright Act (Public Law 60-349,
35 Stat. 1075) confers six exclusive rights upon the owner of copyrighted
material. These include the right to (1) reproduce the work, (2) prepare
derivative works, (3) distribute copies of the work, (4) publicly perform
the work, (5) display the work publicly, and (6) perform a digital audio
transmission publicly. The legal questions surrounding Internet storage and
transmission focus on the copyright holders’ exclusive rights of reproduction
and public performance. The definitions of these terms have been revisited
recently as new techniques are devised for sharing content.

Digital technology has complicated the concept of reproduction. A legal
“copy” is one in which the work is “fixed” in a material object, by some
method from which it can be reproduced or communicated. The advent of
computer memory raises some questions regarding the definition of “fixed”.
Is a digital copy “fixed” if it is stored in volatile memory (RAM)? What if it
is stored on a hard disk but the file descriptor is erased immediately?

Digital technology has also complicated the concept of public performance.
The original definition of “public performance” in the Copyright Act was
very narrow. In Teleprompter Corp. v. Columbia Broadcasting Systems, Inc. (415
U.S. 394 (1974)) and Fortnightly Corp. v. United Artists Television, Inc. (392 U.S.
390 (1968)), the United States Supreme Court decided that transmission of
broadcast television via cable did not constitute a “public performance” and
thus cable providers who retransmit broadcast television are not infringing.
In response to these decisions, Congress amended the Copyright Act in 1976
(Public Law 94-553), expanding the definition of a “public performance” to
include the transmission of a work to the public “by means of any device or
process, whether the members of the public capable of receiving the perfor-
mance or display receive it in the same place or in separate places and at the
same time or at different times.” This prevented businesses (including cable
providers) from selling access to broadcasters’ signals without compensation.
At the same time, Congress implemented a licensing arrangement to
minimize the burden on cable providers, while still protecting broadcasters.
By law, a service wishing to retransmit broadcast signals must negotiate a
license from copyright providers and also gain the consent of broadcasters.
However, depending on its legal classification under communications law, a
service may be eligible to participate in two regulated markets that ease the
burden of negotiation.

First, Sections 111, 119, and 122 of the Copyright Act (U.S. Code Title 17,
Chapter 1) grant cable and satellite providers meeting certain requirements
the right to retransmit broadcast television programming without negotiating
with individual copyright holders. With this “compulsory license,” the
provider either pays set (regulated, below market rate) royalty fees which
are collected by the United States Copyright Office and then distributed to
the copyright holders, or is entitled to a royalty-free license.

Another set of laws apply to negotiations between the broadcaster and the
retransmitter. The Communications Act (CFR, Title 47, Chapter I, Subchapter
C, Part 76, Subpart D, Section 76) requires businesses classified as multi-

time-shifting services, at home and in the cloud

4

Figure 2: While the courts’ interpretation of copyright and communications
law allows consumers to record video content for personal use in
their own homes (Betamax) or stream video from their home set-top
boxes to another device they own (Fox Broadcasting Co. v. Dish
Network, LLC), the courts have been divided on the status of cloud
services engaged in similar practices (Cablevision, ivi, Aereo).

channel video programming distributors (MVPDs) to get “retransmission
consent” to retransmit broadcast television signals. (This is distinct from the
license agreement with the copyright holder.) Retransmission consent may
involve compensation from the retransmitter to the broadcaster. Alternatively,
eligible television broadcast stations may elect not to require retransmission
consent, instead participating in a “must carry” arrangement which under
some conditions may require a cable operator that serves the same market to
carry its signal.

The implications of these laws for cloud services is not clear. While case
law is well established with respect to what end users or cable providers may
do with video, courts are divided on how to apply this to Internet-based
services (as in Figure 2). Some approaches to smart data pricing depend
on cloud content providers’ ability to freely shift data in time and/or space,
and negotiate on fair terms with Internet service providers that carry their
content. The courts’ interpretation of copyright and communications law
for cloud providers has a major impact on the licensing structures and costs
associated with each of these approaches.

time-shifting services, at home and in the cloud

Many solutions to the content delivery problem propose time-shifting content
delivery, in order to smooth traffic during peak periods [3]. Smart pricing
schemes may encourage users to modulate their viewing habits and make
delivery time more flexible for network service providers. However, it is
unclear under what conditions a service engaging in this practice infringes
the rights of the copyright holder (in which case, it would require a potentially
costly license that might negate the savings associated with time-shifting).

Given that the exclusive rights to reproduction and public performance
are held by the copyright owner, is a broadband service provider allowed to
store copyrighted content for users in the “cloud” and deliver it to them later,
on request? The key precedents in the United States are the 1984 Supreme
Court decision in Sony Corp. of America v. Universal City Studios, Inc. (Betamax)
(464 U.S. 417 (1984)) and the 2008 Second Circuit decision in Cartoon Network
LP v. CSC Holdings Inc. (Cablevision) (536 F.3d 121 (2d Cir. 2008)).

User may capture broadcast television signals, record a copy, and time-shift or place-shift that copy for private, non-commercial viewing.Courts disagree on the licensing requirements for a third party to offer a service allowing users to do the same thing, but with equipment located outside their homes, in the cloud.time-shifting services, at home and in the cloud

5

Sony Corp. of America v. Universal City Studios, Inc. (Betamax)

In 1979, Sony was sued by members of the film industry for its role in
developing the Betamax VCR. The plaintiffs claimed that because Sony was
manufacturing a device that could be used for copyright infringement, they
were liable for infringement committed by its customers. The Supreme Court
decision found Sony not liable because the Betamax VCR had non-infringing
uses, and concluded that “private, noncommercial time-shifting in the home”
is fair use and does not infringe on the reproduction right.

Betamax addresses two key questions with implications for future cloud

services:

• Can a company be held liable for infringement if the service it provides has both
infringing and non-infringing uses? The court decided that the Betamax
VCR had significant non-infringing uses, for example making copies
of televised content with permission of the copyright holder, and that
Sony was therefore not liable for potential infringement.

• May a viewer time-shift video content without the authorization of the copy-
right holder? The court further decided that time-shifting television for
private, non-commercial use in the home is permitted even without the
authorization of the copyright holder, as it “merely enables a viewer to
see such a work which he had been invited to witness in its entirety
free of charge.”

Later legislation (notably the Digital Millenium Copyright Act) and case
law modified the Sony decision in several ways. In A&M Records, Inc. v.
Napster, Inc. (239 F.3d 1004 (9th Cir. 2001)), an appeals court found that
Napster could be held liable for contributory infringement because it was
able to monitor and control users’ activities. Similarly, in MGM Studios,
Inc. v. Grokster, Ltd. (545 U.S. 913 (2005)), the Supreme Court decided that
Grokster could be liable for inducing copyright infringement (despite having
non-infringing uses) because Grokster advertised and instructed users on
engaging in infringement.

Cartoon Network LP v. CSC Holdings Inc. (Cablevision)

In 2008, a consortium of copyright holders sued Cablevision for its Remote
Storage DVR (RS-DVR) service. Cablevision routed the multimedia data
stream going to subscribers through a Broadband Media Router (BMR),
where it was buffered for at most 1.2 seconds while the system checked if any
customers had requested a copy. If a subscriber had requested a particular
program, it would be stored on a portion of a hard disk allocated to that
subscriber in Cablevision’s cloud data center, from which the subscriber
could later view it.

The lawsuit alleged direct copyright infringement, excluding the topic
of contributory copyright infringement. In turn, Cablevision waived any
defense based on fair use. Thus, the precedent set by Betamax is largely
orthogonal to Cablevision.

The court sided with Cablevision, setting key precedents in three areas:

• A copy of “transitory” duration does not infringe on the reproduction right.
Because Cablevision held content in its BMR buffer for no more than
1.2 seconds at any time, its buffer copy did not infringe. This is in
contrast to the earlier MAI Systems Corp. v. Peak Computer, Inc. (991 F.2d

“x with a long cord:” place-shifting services

6

511 (9th Cir. 1993)), where the Ninth Circuit found that a copy held in
volatile memory did infringe.

• If a customer issues the command to copy directly to a copying service, then
the customer (not the service) is liable for the copy. Although the copy
stored on the hard disk was a reproduction in the legal sense, the court
agreed that the customer, not Cablevision, was responsible for making
the copy. This decision establishes volitional action as a key element
shielding cloud providers from liability for their users’ actions.

• A system that transmits to a single subscriber using a single unique copy
produced by that subscriber does not constitute a “public” performance. The
court made the determination of whether a performance is “public”
based on the audience of the particular copy of the work.

This decision is important for establishing copyright liability protection for
cloud providers, but the precedent it sets is limited. The protection against
liability established by Cablevision is based on the grounds that the user
directly initiates the copy; this protection would not necessarily apply to
systems that proactively fetch content without an explicit request from the
user. Similarly, based on Cablevision, a network service provider that caches
popular content at the edge of a network might need to store one copy per
user, or else negotiate a license for public performance of the content.

Impact of time-shifting on data pricing

The case law established by Cablevision and Betamax mostly affects smart data
pricing techniques that involve time-dependent pricing [3]. These may be
more or less problematic depending on their implementation:

• Pricing strategies that encourage users to change their viewing habits by
deferring consumption to off-peak times are not likely to be problematic.

• Pricing strategies that encourage users to pre-fetch content in off-peak
times may be problematic in some cases. Betamax established that
pre-fetching is permitted for private, non-commercial use in the home,
but not necessarily for other uses. Furthermore, if the service provider
creates a non-transitory copy that is not user-initiated in order to
facilitate the technical process of pre-fetching, the precedent set by
Cablevision protecting the service provider from liability may not apply.

• Pricing strategies in which content is proactively pre-fetched (e.g. based
on predictions of content that is likely to be of interest to the consumer)
during off-peak times without the user initiating the download can
be problematic, as the precedent set by Cablevision requires volitional
action on the part of the user to protect the service provider from
liability.

“x with a long cord:” place-shifting services

While Betamax and Cablevision addressed the issue of time-shifting, Warner
Bros. Entertainment Inc. v. WTV Systems, Inc. (824 F.Supp.2d 1003 (2011))
and Fox Broadcasting Co. v. Dish Network, LLC (723 F.3d (9th Cir. 2013))
concern the copyright implications of place-shifting. Place-shifting allows
viewers to watch video content at a place of their choosing. Typically, these
services present themselves as “X with a long cord”: a DVD and DVD player

“x with a long cord:” place-shifting services

7

rental attached to a long cord (Zediva in Warner Bros. Entertainment Inc. v.
WTV Systems, Inc.), a television set-top box with a long cord (Slingbox in Fox
Broadcasting Co. v. Dish Network, LLC), or a television antenna with a long
cord (ivi, Aereo), for example.

Warner Bros. Entertainment Inc. v. WTV Systems, Inc.

Zediva was a service offered in 2011 that allowed customers to watch movies
online by streaming a signal over the Internet from physical DVD players
located in California. Customers who “rented” a DVD had exclusive access
to that disk and a DVD player for up to four hours. Each disk could only be
viewed by one customer at a time.

Because they did not negotiate streaming licenses, Zediva was able to
offer new releases as soon as they were available on DVD, before they
were licensed to streaming services such as Netflix. Also, Zediva was able
to undercut competitors; customers could rent a physical disk and DVD
player for $1.99, while licensed streaming video services at the time charged
between $3.99 and $5.99 for new releases.

Zediva’s defense argued that they were identical to a brick-and-mortar
rental store, which is not required to negotiate licenses from copyright owners
for post-purchase rentals (under the first sale doctrine). Because the first
sale doctrine is a defense only for reproduction and distribution, not public
performance, the case rested on whether or not Zediva infringed on the
public performance right.

The district court decided against Zediva, rejecting their first sale doctrine-
based defense and noting that they were clearly operating a streaming service,
not a DVD rental service. Noteworthy conclusions of the court were:

• Zediva’s streaming signals were a “public performance” even though
customers were using the DVDs at different times, implying that suc-
cessive transmissions of a single copy to multiple viewers can be con-
sidered public performance. (In Cablevision, each copy was only ever
viewed by one user.)

• The “length of the cable” may be determinative in deciding whether
copyright infringement occurred. Zediva considered itself analogous
to “playing back a movie from a DVD with a very long cable attached,”
but the court held them liable for transmission because the videos were
received “beyond the place from which they are sent.”

Fox Broadcasting Co. v. Dish Network, LLC

In 2013, Dish implemented a service allowing subscribers to view content
from their home set top boxes over the Internet, using a streaming server
installed in the home (Slingbox). This allows subscribers to view live, on-
demand, or recorded content that they have access to at home, from any
location.

Fox argued that Dish infringed on the public performance right. However,
the district court found that because the service could only be used by
subscribers to get access to their own recordings (which were considered fair
use, according to Betamax), and because the reproduction and transmission
actions were initiated by volitional action on the part of subscribers (as
in Cablevision), there was no direct infringement. Furthermore, a user’s
transmission of programming from one place to another is not a public

schrödinger’s cable duck: internet delivery of broadcast television

8

performance because the content is already in the subscriber’s possession, as
is the equipment. Thus, Dish does not engage in contributory infringement
by enabling this behavior.

This decision is significant, because while at face value, the Slingbox seems
like just another “X with a long cord,” here, the long cord carries content
between equipment already in the user’s possession. Thus, a long cord
connecting a user’s device to the cloud is not equivalent to a long cord
connecting two devices belonging to the same user across the Internet.

Impact of place-shifting on data pricing

Place-shifting affects smart data pricing strategies by changing the dynamics
of cost and demand in the ecosystem of Figure 1. The agreements between a
place-shifting service and content creators (e.g. license agreements, revenue
sharing contracts) affect the cost, value, and availability of the service. This
in turn influences the prices of data services, as the network service provider
acts as a platform for delivery of the content.

Place-shifting services in which content is stored in the cloud can po-
tentially reduce the acquisition and storage costs of the content distributor.
These savings can trickle down and generate consumer surplus that may
influence data purchasing decisions. However, the legality of services that
do not specifically negotiate licenses for cloud streaming (as in Zediva) is
uncertain, especially when a single copy of the content is transmitted to
multiple users (i.e., when the savings to the content distributor are greatest.)
Content distributors that negotiate a license in the face of this uncertainty
pass on higher licensing costs to consumers.

Place-shifting services that allow mobile users to access content that they
previously could only view at home (like Slingbox) may shift demand from
inexpensive home broadband networks to relatively expensive cellular net-
works, partially negating smart data pricing strategies that rely on the ability
to shift demand in the opposite direction. Again, the affordability of these
services (and thus, their impact on data pricing) varies depending on whether
or not place-shifting services must negotiate licenses, since those licensing
costs are typically passed on to consumers.

Finally, place-shifting also includes time-shifting, so considerations related

to time-shifting and data pricing also apply.

schrödinger’s cable duck: internet delivery of broadcast tele-
vision

Even more than other forms of time-shifting and place-shifting, the appli-
cation of copyright law to cloud-based services that retransmit broadcast
television over the Internet has been confusing and contradictory. The key
point of debate is the classification of these services under communications
law. This has been the subject of recent litigation involving two services, ivi
and Aereo, which we briefly describe here. A related service called “FilmOn”
is still enmeshed in active litigation.

WPIX, Inc. v. ivi, Inc.

ivi, Inc. was a cloud service that allowed subscribers to watch local broadcast
TV from several U.S. cities for a monthly fee of $4.99 (with an option to
also purchase a recording service for additional $0.99).
It was sued by
a group of copyright holders and broadcasters one week after beginning

schrödinger’s cable duck: internet delivery of broadcast television

9

retransmissions. A district court (765 F. Supp. 2d 594 (S.D.N.Y. 2011)) and an
appeals court (No. 11-788 (2d Cir. 2012)) decided against ivi, forcing them to
cease operations.

ivi argued that they should be classified as a cable system, making them
eligible for the compulsory license under §111 and freeing them from the
requirement to negotiate with copyright holders. The court indicated that it
is unclear based solely on the text of the Copyright Act whether ivi should
be considered a cable system. Thus, in ruling against ivi, the court based its
decision on the following considerations:

• The intent of Congress in enacting §111 was to improve access for
communities that were underserved by broadcast signals. Because
Internet-based retransmission is not localized and is not intended
mainly to support remote areas, the court found that Congress did not
intend for Internet retransmission services to be eligible for compulsory
licenses under §111.

• The United States Copyright Office has not interpreted §111’s compul-
sory licenses to include Internet retransmission, which they have said
they consider to be “vastly different” from other retransmitters who
are eligible.

American Broadcasting Companies v. Aereo

Aereo allowed subscribers to stream broadcast television over the Internet for
$8/month. The creators of Aereo designed the service specifically to avoid
infringing on reproduction or public performance rights, using the precedent
set by Cablevision. Aereo set up an “antenna farm” in a warehouse in New
York. Users of the service “rented” an individual antenna and were also
offered a VCR service, allowing them to store copies of television programs
for later streaming.

As in Cablevision, the users engaged in volitional conduct to create a copy,
no non-transitory copies except for the users’ were created, and an individual
copy (an individual antenna) was dedicated to each user. Aereo allowed
users to access content they were already permitted to view for free over
public airwaves. Both the district court and appeals court sided with Aereo,
citing Cablevision as precedent.

However, the Supreme Court decided in favor of the broadcasters (134 S.
Ct. 2498, 2511 (2014)). The court applied the “duck test” (if it looks like a
duck, swims like a duck, and quacks like a duck, then it probably is a duck),
arguing that Aereo had an “overwhelming likeness to cable companies” and
therefore, required the consent of broadcasters to retransmit their signals.

Following this decision, the company argued that since they are a cable
system, they are eligible for the compulsory copyright license. This argument
was rejected by the district court (Civil Action No. 12-CV-1540 (AJN) (HBP)
(S.D.N.Y Oct. 29, 2014)), which called it a “fallacy” that “because an entity
performs copyrighted works in a way similar to cable systems it must then
be deemed a cable system for all other purposes of the Copyright Act.” Thus
Aereo became Schrödinger’s cable duck: simultaneously a cable system and
not a cable system. Although it was required, like a cable system, to obtain
retransmission consent from broadcasters, it was not eligible for compulsory
licenses from copyright holders.

A similar service, FilmOn, has been the subject of more recent, but equally
contradictory, litigation. In July 2015, a Los Angeles federal district court

schrödinger’s cable duck: internet delivery of broadcast television

10

Figure 3: Close to 40% of U.S. households purchase Internet service as part
of a bundle that also includes television services. On the left, we
see the percentage of U.S. households who access the Internet
using only cable, DSL, mobile broadband, fiber, satellite, multiple
technologies, or who do not access the Internet from home. Moving
towards the right, we see which of those purchase Internet service
as part of a bundle including basic and/or premium television
services. (Data source: July 2013 United States Census Computer
and Internet Use Supplement. Percentages may not sum to 100 due
to rounding.)

decided that FilmOn was entitled to the same compulsory licenses as cable
companies. However, in November 2015, this judgment was rejected on
appeal. The ongoing FilmOn litigation highlights how vague the Aereo ruling
was, and the level of uncertainty that remains regarding retransmission of
broadcast television.

Impact of Internet retransmission of television on data pricing

Smart data pricing often involves side payments and agreements between
Internet-based content providers and network service providers (for example,
as in sponsored data [14]) under the assumption that these are separate
parties with distinct interests. However, network service providers may have
a competing interest in the content delivery market; many also sell video
entertainment services. Figure 3 shows that according to a July 2013 census
survey, 39% of U.S. households buy Internet service as part of a “bundle”
including television.

Bundles are important to cable operators, who have been losing pay-TV
subscribers while the high-speed Internet user base continues to grow. The
cost of an Internet service bundle including other services is higher than an
equivalent stand-alone Internet plan (Figure 4). However, consumers have
an increasing preference for à la carte television options or “cord cutting.”
According to recent Nielsen reports, the number of “zero TV” households is
on the rise, and almost half of “zero TV” households are composed of young
people under the age of 35. Meanwhile, broadcast television networks remain
important to viewers, with the “Big Four” still retaining a 40% average weekly
reach. The coincidence of these trends makes alternative video platforms,
and Internet delivery of television programming in particular, the next big
front in the battle for consumer dollars.

The ecosystem shown in Figure 1 currently favors cable and satellite
providers that also sell bundles including broadcast television, since these

None(25.9%)Dial up (1.0%)Other (1.1%)Satellite (1.6%)Fiber (4.3%)Mobile broad−band (7.4%)Multiple(13.3%)DSL(14.1%)Cable(31.3%)None(60.6%)Basic(17.1%)Premium(10.1%)Basic & Premium(12.1%)schrödinger’s cable duck: internet delivery of broadcast television

11

Figure 4: Prices for Internet service in the United States, grouped by tech-
nology, bundle type, and provider. The lower and upper “hinges”
of the boxplot correspond to the first and third quartiles of avail-
able plans, the “whiskers” extend to 1.5× the interquartile range,
and outliers beyond the whiskers are plotted as points. A given
provider may offer a range of plans of the same bundle type using
the same technology, differentiated by data rate, cap, or number of
television channels included. Not all plans are available in all U.S.
markets. (Data Source: International Bureau, Fourth International
Broadband Data Report, 2015.)

are entitled to compulsory licenses below market rates. These services may
even have a competitive edge when selling IPTV service (i.e., not traditional
cable television). By delivering this service over managed IP, not the public
Internet, they can offer a better quality of service than competitors and also
exempt their own service from data caps, without running into network
neutrality issues that apply on public Internet. (See for example Comcast’s
“Stream” product, announced July 2015.)

However, if services such as ivi, Aereo, and FilmOn were reclassified to
also entitle them to compulsory licenses, the balance of this ecosystem would
shift dramatically. This would affect aspects of data pricing related to transac-
tions between content distributors and network service providers, including
network neutrality [9], sponsored data [14], and app-based pricing [2].

The Federal Communications Commission (FCC) and/or Congress are
likely to eventually regulate Internet streaming providers, and describe what
rights and requirements apply to them. It is not clear what this regulation
might look like, and whether Internet streaming providers will at that stage
be on equal footing with cable providers, who are subject to regulations
imposed at a time when cable services operated mainly to improve access
for underserved communities.

llllll100200300Stand−aloneInternetInternetand PhoneInternetand TVInternet, Phone,and TVPrice per month (USD)TechnologyCableDSLFiberSatellitePrices of fixed broadband Internet plansavailable in the United Statessummary and global outlook

12

Time-shifting

1984 Sony Corp. of America
v. Universal City
Studios, Inc. (Betamax)
2008 Cartoon Network LP v.
CSC Holdings Inc.
(Cablevision)

Place-shifting
2011 Warner Bros.

Entertainment Inc. v.
WTV Systems, Inc.

2013 Fox Broadcasting Co. v.
Dish Network, LLC

“Private, noncommercial time-shifting in
the home” does not infringe on the repro-
duction right.
Establishes protection from liability if the
service provider’s copy is transitory and
the user’s copy is created by volitional
action on the user’s part.

The “length of the cable” between the con-
sumer and the content may be determi-
native in deciding whether copyright in-
fringement occurs.
A user’s transmission of programming
from one place to another does not in-
fringe on the public performance right
when all content and equipment are in
the subscriber’s posession.

Internet delivery of broadcast television

2012 WPIX, Inc. v. ivi, Inc.

2014 American Broadcast-

ing Companies v. Aereo

Internet-based broadcast television ser-
vice ivi did not qualify for compulsory li-
censes to retransmit broadcast television.
Aereo’s place-shifting service required
retransmission consent because they ap-
peared too much like a cable provider, but
another court judged that they did not re-
semble a cable provider enough to qualify
for compulsory licenses.

Table 1: Highlights of significant judicial decisions in the United States re-
lated to time-shifting, place-shifting, and Internet delivery of broad-
cast television.

summary and global outlook

Table 1 summarizes key precedents set by cases discussed in this tutorial.
Given these decisions, the only certainty is that cloud multimedia services
remain under a cloud of uncertainty. This is a barrier to technical innovation,
as without legal certainty regarding licensing requirements, companies of-
fering new services are not able to predict costs, and investment in them is
risky.

The global outlook for cloud multimedia services is similarly uncertain.
Table 2 shows cloud-based multimedia services that have been the subject of
litigation (often dragging on for years, at considerable expense) in Europe
and Asia. These, too, have often yielded contradictory and vague decisions.

The decisions made by legislative bodies, judicial bodies, and regulatory
agencies in the next few years as they apply copyright and communications
law to the Internet will shape market offerings in this area, in terms of how
new technologies can be deployed and what kind of pricing strategies can be
associated with them. Until then, however, key questions - when and where

References

13

Location

Service

Status

France
United
Kingdom
Finland
Germany

Singapore
Japan
Australia

Wizzgo
TV Catchup

Decided in favor of content owner
Mixed decisions, with litigation ongoing

Decided in favor of content owner
Mixed decisions, with litigation ongoing

TVkaista
Shift.TV,
Save.TV
Decided in favor of cloud service
Record TV
Rokuraku II
Decided in favor of content owner
Optus TV Now Decided in favor of content owner

Table 2: The global outlook for cloud multimedia services is equally uncer-
tain. These services have been involved in extensive litigation, often
with multiple appeals dragging on for years.

will network users consume multimedia content? what kinds of relation-
ships will exist between network service providers, content distributors, and
content owners? - remain unanswered.

acknowledgments

This work was supported in part by the U.S. National Science Foundation
through the Graduate Research Fellowship Program Award 1104522, and by
the New York State Center for Advanced Technology in Telecommunications
(CATT).

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