Optus’s win of a court case battle with sport content providers – enabling it to use FTA signals to provide IPTV services to its mobile customers – created enormous upheaval in 2012. BuddeComm was very pleased with the initial outcome as these issues are most important in the development of the digital economy. However, the case was subsequently overturned by the High Court and is now challenged by Optus again
Interestingly, overseas response was along the lines of ‘what’s all the fuss about?’ Most other countries have some type of regulation in place, often known as ‘must-carry’, whereby FTA signals must be made available – for example, via cable TV networks. So what Optus is doing is normal practice in many countries. Australia is one of the few western countries that do not have such rules and for almost 20 years that has constituted a major battle arena between FOXTEL and the FTA broadcasters in Australia.
The basic argument in the initial judgement was that you can record FTA on your old video-recorder or modern PVR for personal use, and he didn’t see any difference from that and what was happening with the smartphone.
However, the most dangerous element of this case is the fact that if the government did in fact start changing the law for political reasons – simply to favour the sporting codes – it could seriously impede the future of the digital economy as it would then have to find a way to separate that legislation from cloud computing, since cloud computing would fall into that same category.
Also, a large part of the fuss relates to sporting rights, so how are we going to handle that if the content providers were to get it their way? What FTA can be recorded and what cannot?
And if a device other than the smartphone is developed that allows you to record ‘something’ – are we going to invent new regulation for each technology?
While its reaction was not as dramatic as some of the sport codes, Telstra was critical of the decision also. However, it should be pleased. It could still opt for certain rights that give it just that edge in the market (and we believe the market for this will still be there), while at the same time more people can use its network to download billable content. Also, cloud computing is a critical part of Telstra’s future.
We were also puzzled at the Minister becoming involved in the debate, threatening new legislation – totally unnecessary. This should be left to the courts to sort out – political meddling is the last thing that is needed.
It looks to us like a storm in a teacup. We believe that if all parties were to relax and start thinking about it, they would realise that their world hasn’t collapsed.
|Singapore 2010 (RecordTV versus MediaCorp)
· RecordTV provided an online service which allowed registered users in Singapore to record the FTA broadcasts and films of MediaCorp TV and to view the recordings online at a later date;
· All recordings made using RecordTV’s online service ‘iDVR’ were stored at RecordTV’s premises.
· RecordTV was accused of:
· authorising registered users to make copies of MediaCorp’s FTA broadcasts and films without a licence;
· communicating MediaCorp’s FTA broadcasts and films without MediaCorp’s licence.
The court held that
· RecordTV did not authorise its registered users to make copies of and/or communicate to the public MediaCorp’s FTA broadcasts and films;
· RecordTV’s registered users did not constitute ‘the public’, since any communications made by RecordTV were made privately and individually; each registered user had to request to record MediaCorp’s FTA broadcasts and films;
· RecordTV’s registered users were the ones who had ‘communicated’ MediaCorp’s FTA broadcasts and films.
US 2007/08 (20th Century Fox Cartoon Network versus Cablevision)
· Cablevision allowed subscribers to record FTA programs on hard drives maintained in Cablevision’s own central offices which they could access remotely;
· Cablevision was accused as a direct infringer of both the reproduction and public performance rights for making remote DVRs available to its customers.
The court held that
· The buffer copies (lasting less than 1.2 seconds) were not ‘fixed’ sufficiently and thus not ‘copies’ under the Copyright Act;
· The consumers who press record are the ones who are making copies NOT Cablevision;
· Playback of those copies (each of which was recorded separately for each consumer, even if thousands of consumers separately chose to record the same show) was not a public performance since each copy could be played only by the consumer who recorded it.
On the broader issue of copyright ……
We have argued that content ownership is indeed a real issue – that intellectual property is a valuable asset, and that owners should be able to have commercial protection against the misuse of it.
But the laws relating to this issue originated in 17th century Britain, and they were developed for book printing. The copyright laws in Britain made books very expensive and the book-printing business moved to Flanders and Holland. The USA did not follow the strict British laws either and they were able to boost their education system (cheap books) to deliver enormous social benefits to their society.
The lesson learned here is that too much protection could severely hamper new economic and social developments – and, in our case, hamper the digital economy. There also should be recognition of the rights of individual users, business, libraries and educational institutions.
We have also seen that it is futile to try to protect the old world – whether in relation to music, books, newspaper, broadcasting or retail. Technologies will always find a way and so it is much better for the relevant industries to develop new business models that allow them to profit from the many other opportunities that the new technologies will create.
The problem is that this is a very difficult proposition for these organisations. All these sectors need to shrink before they will be able to find a new base from which to start building up business again. The music industry is getting there, but interestingly it is a totally new industry that is now leading the way. The traditional record companies have largely lost their leading position in this market.
This should be a warning to everyone. There is no alternative but to adapt to the new environment. As well as this, new business models will need to be based upon the customers and not around the middlemen. That is not to say that there is no role for the middleman; there are always opportunities in packaging, bundling, marketing, etc. However, again, these will be completely different middleman models from the ones that are currently in existence.
Building up layers to try and protect the old world will ultimately be a waste of time.
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