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Supreme Court Seeks Insight From Government In Cablevision Case

Posted on: Tuesday, 13 January 2009, 08:44 CST

On Monday, the U.S. Supreme Court asked for the federal government’s perspective on a ruling that would allow Cablevision Systems Corp to provide a new digital video recording service.

Film studios and television networks are upset over a ruling by the U.S. Court of Appeals in New York that said Cablevision’s proposed digital video recording service would not infringe on media company copyrights.

In 2006, Cablevision announced its Remote Storage Digital Video Recorder system, or RS-DVR, which would allow customers to record, and store TV programs on Cablevision servers, allowing them to be played back at will.

Many film studios and television networks, including CBS Corp, Walt Disney Co, and Time Warner Inc, sued to block the new service.  They won the case before a federal judge, but lost in the appeals court.

"We interpret the Supreme Court's step to ask the Justice Department for their thoughts on this case as a slight negative for Cablevision and to a lesser degree, other cable operators," said Thomas Eagan, analyst at Collins Stewart.

Time Warner Cable and Comcast Corp both said they would start similar services if the ruling was upheld.

According to analysts, cable companies could save millions of dollars if the technology is approved.

Eagan believes Cablevision could save $100 per set-top box, an additional $50 per customer due to reduced cost of labor for service representatives, and could reduce customer losses by nearly 30 percent.

Cablevision’s largest expense is the annual outlay of DVR boxes that are installed in over 3 million metropolitan New York homes.

The Supreme Court has asked the Justice Department’s solicitor general to issue a report expressing the position of the federal government on the issue.  The report could take several months to be completed.

After the brief is filed, the Supreme Court will determine whether they will hear or reject the appeal.

Justice Samuel Alito, and Chief Justice John Roberts did not consider the case.  This is common practice if a justice has ties to any of the companies involved in a case.

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On the Net:

• U.S. Supreme Court
• Cablevision Systems Corp
• Time Warner Cable
• Comcast Corp

Source: redOrbit Staff & Wire Reports

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