Business Services Industry

From the Desk of… Dick Wiley Current Legal Issues No Audio Hallucination For Webcasters

Communications Today, April 6, 2001 by Dick Wiley

Opinion By Dick Wiley, rwiley@wrf.com

It's a tough regulatory landscape out there - and webcasters can no longer avoid the reality that two pressing legal issues facing this industry today involve copyright and telecommunications law. Industry and government policymakers alike have trained a sharp eye on both these areas of the law.

The streaming of radio programs involves two distinct types of copyrighted works: (1) the musical work, written by the composer and lyricist, and typically owned by the music publisher; and (2) the sound recording, created by the performing artist and the record company, and typically owned by the latter.

The sound recording performance right recently has created considerable controversy. In 1995, Congress enacted a law giving sound recording owners the exclusive right to authorize public performances via digital subscription transmissions. Later, in the Digital Millennium Copyright Act, Congress expanded this performance right to include non-subscription digital transmissions, including Internet transmissions. Congress also provided a statutory license for most webcast-type performances, so long as such performances met nine conditions. Because many of these conditions are inconsistent with traditional broadcast industry practices, radio broadcasters streaming their own signal (versus using a third party like broadcast.com) may have difficulty qualifying.

Broadcasters have argued they are exempt from the public performance right. However, in a decision made last December and now under appeal to the federal courts, the Copyright Office disagreed. If radio operators do not prevail in this litigation, they may try to reach an agreement with the record industry to adjust the statutory license conditions in exchange for conceding the exemption argument. However, even if radio stations ultimately qualify for statutory licenses, they still face substantial exposure because the yetundetermined license fees will be retroactive to the start of streaming.

Television licensees streaming their own broadcasts online do not face the same copyright issues as radio because they either own their programs, which they copyright, or they acquire programming and presumably attempt to obtain streaming rights. Controversy with respect to video programming centers on the rights of third parties to stream copyrighted video content. Since there is no compulsory license, such parties must obtain permission from individual copyright owners.

In a highly publicized case last year, Canadian-based iCrave initiated streaming of the broadcast signals of both Canadian and U.S. TV stations without such approval. Within weeks, major copyright holders sought - and were eventually awarded - an injunction preventing the webcasting of U.S. signals unless iCrave made sure U.S. citizens could not view its Web site. Now another Canadian company, JumpTV.com, is entering the fray with a technology that supposedly will prevent such cross-border viewing. Nevertheless, doubts exist about the effectiveness of this new system.

Meanwhile, television operators are attempting to prevent the implementation of a compulsory copyright for streamed video programming. Congress likely will encourage the affected parties to negotiate an acceptable compromise solution. But if this effort proves unsuccessful, as is likely, legislation eventually may be required to resolve the issue.

Telecommunications Regulation

Broadband delivery is essential to the provision of high quality audio and video content via the Internet. A new generation of technologies has arisen to provide Internet access through various transmission systems: cable, telephone, wireless devices, satellites and broadcast spectrum.

The challenge facing government decision makers is how to apply current laws (and develop new ones where needed) in a way that will promote Internet innovations while still protecting the rights of content providers and end users. In particular, considerable debate has centered on differing FCC regulations of high-speed Internet services.

For example, the Commission imposes legacy common carrier regulations - such as access charges, interconnection, line-sharing, etc. - on telephone-based Internet access. No such restrictions apply to cable-based offerings. However, in approving the AOL/TW merger, both the FTC and the FCC required Time-Warner to open its cable network to competing ISPs for the provision of high-speed Internet access. Moreover, while the merger was pending, the FCC initiated a proceeding to consider whether a uniform regulatory policy should apply to all forms of broadband Internet service.

In the absence of any definitive federal government policy, several appellate courts have addressed the classifications of facilities used for Internet access - and the decisions, unfortunately, have not been consistent in their approach. Resolution of the regulatory parity issue by the FCC, the courts or Congress would help to shape the future of broadband video delivery. Moreover, it would have a dramatic impact on the viability of business ventures involving webcasting.