U.S. lawmakers are in the process of examining the current legal loophole that exists for copyrighted works obtained through online streaming.
As of now, there is a legal difference between streaming and downloading. Streaming is currently considered a public performance which is punishable as a misdemeanor whereas downloading is punishable as a felony.
Its apparent that the Subcommittee on Intellectual Property currently chaired by Thom Tillis (North Carolina Republican) & ranking member Christopher Coons (Deleware Democrat) want to close this loophole.
In early May of this year, a hearing was held at the Senate Committee on the Judiciary with two professional sports organizations represented. Michael Potenza, vice president and intellectual property counsel for the NBA and Riché McKnight, Global Head of Litigation for the UFC’s parent company Endeavor were among the speakers.
Both Potenza and McKnight informed legislators that streaming piracy was severely affecting their business models.
Some solutions presented by the NBA and UFC representatives included the following.
- Social media and other digital services should terminate accounts for known infringers.
- Digital platforms should consider sending out piracy notices to their users before live events – or if that is not feasible, then at least periodically reminding them that piracy is illegal.
- Renew call to criminalize online streaming.
“Without a real fear of criminal prosecution, pirates are emboldened to continue engaging in illegal activity to distribute sports content – whether it is manufacturing and selling ISDs or operating an illegal streaming service,” NBA’s Michael Potenza said.
“It is important to revise the criminal law to recognize illegal streaming of copyrighted content as a felony, which would provide a more effective way to deter illegal streaming,” he added.
What the FCC and the Courts Have Ruled on IPTV
FCC and U.S. Supreme Court rulings addressing the classification of certain cable services have already concluded that high-speed Internet access by cable is not “cable services,” even though they are provided over the same cable system as video signals. These decisions are highly instructive on the answer to the question of whether IPTV should be regulated as cable service.
In March, 2002, the FCC issued its Cable Modem Declaratory Ruling8 concerning the appropriate regulatory treatment for broadband access to the Internet over cable facilities. In this decision, the FCC declared that cable modem service in which cable providers offer broadband or Internet access, is an interstate information service, not a cable service, and that there is no separate offering of telecommunications service when the cable operator offers cable modem service.
The FCC’s Cable Modem Order resulted in cable modem service not being subject to regulation under the Cable Policy Act. In Nat’l Cable Television Ass’n v. Brand X Internet Service (“Brand X”), the U.S. Supreme Court upheld the FCC’s Cable Modem Order.9
In Brand X, the Supreme Court held that the FCC had lawfully concluded that cable companies selling broadband Internet services do not provide telecommunications service as that term is defined under the Communications Act, and that such services are exempt from mandatory, common carrier regulation under Title II of the Communications Act.
The Supreme Court further held that the FCC had properly concluded that the Internet access offered by a cable system using a cable modem is an interstate information service, because it provides the capability for manipulating or storing information. The Supreme Court also affirmed the FCC’s determination that, when offering cable modem service, a cable system provider lacks the required control over the selection of information by the user, and that the element of control of the information lies with the cable modem subscriber.
As pointed out above, IPTV is a two-way interactive service that is controlled by the subscriber. Thus, for the reasons given by the FCC in its Cable Modem Declaratory Ruling and the Supreme Court in Brand X, and due to the differences described above between traditional cable service and IPTV, particularly IPTV’s two-way interactive features, one can conclude that IPTV is not a “cable service” within the meaning of the Cable Act, and therefore, is not subject to cable franchising requirements under that Act. There is a recent lower federal court decision in Connecticut, however, that reached a contrary conclusion.