Judge: FilmOn Entitled to Compulsory License of Programming

Less than a year after the Supreme Court shut down Aereo for delivering OTA TV signals to Internet subscribers, a U.S. District Court in California granted FilmOn, an Internet video streaming site, a compulsory license to retransmit TV station programming online. The difference between the two cases, says the judge, was that the Supreme Court did not address whether Aereo was entitled to a compulsory license, but rather found that it violated copyright laws. Fox Broadcasting has said it will appeal the ruling favoring FilmOn.

videostreamAccording to Variety, Judge George W. Wu of the U.S. District Court for the Central District of California stated that, “federal copyright code does not distinguish between traditional cable TV providers and online services like FilmOn with respect to rights to a compulsory retransmission license.”

“Courts consistently reject the argument that technological changes affect the balance of rights as between broadcasters and retransmitters in the wake of technological innovation,” Wu wrote. “Instead, courts have left such rebalancing to Congress.”

Wu stated that the Supreme Court ruling on Aereo wasn’t applicable because that case didn’t address whether Aereo was entitled to a compulsory license. After the Supreme Court ruling implied that Aereo was “functionally equivalent” to a cable system, Aereo tried to make that argument to the U.S. Copyright Office but was unsuccessful.

The Hollywood Reporter states that Wu did note the analogous case of TV streamer, Ivi, whose bid for a compulsory license was rejected by the 2nd U.S. Circuit Court of Appeals but disagreed with the conclusions. Acknowledging that the issue is of “significant commercial importance,” the judge “authorized an immediate appeal to the 9th Circuit Court of Appeals and preserved the status quo by maintaining an injunction upon FilmOn.”

If the appeal fails, adds THR, “it could mean that CBS, Fox, NBC and ABC have to license their programming to a digital outlet at below-market rates” as well as provide competition for the broadcasters’ own OTT platforms. Ultimately, the disposition of these cases also hinges how the FCC redefines an MVPD (multichannel video programming distributor) so that it is technology-neutral.