Judge's FilmOn Opinion Unsealed: "Congress Did Not Consider the Internet in 1976"

FilmOn, Zee screenshot - H 2015
Courtesy of FilmOn, Zee

Eighteen months ago, the U.S. Supreme Court closely examined a Barry Diller-backed tech upstart, and after likening it to an unlicensed cable system, decided that it was violating TV broadcasters' public performance rights by retransmitting programming.

But the Aereo ruling hasn't stopped the debate over what to do in the digital age about the 1976 Copyright Act, which requires a license for retransmission. The FCC is currently examining modernizing the interpretation of a "multichannel video programming distributor" so that it covers online video providers, and in the meantime, FilmOn has been angling for a shot at a compulsory license, which is an advantage that local cable systems can get under copyright law.

In recent months, FilmOn experienced success in California while suffering defeat in the District of Columbia. At the time of the latter ruling, the judge's opinion was under seal, but on Tuesday, a redacted copy (see here) was made publicly available.

Given that both cases are going up on appeal with totally opposing conclusions as to how to fit new technology under old legal standards, it is worth highlighting the primary difference in the judge's opinions. In many ways, the case presents an originalist vs. contextualist or "living" approach to interpreting the law.

In July, U.S. District Judge George Wu shocked many in the entertainment industry by determining that FilmOn was potentially entitled to license programming from CBS, Fox, NBC and ABC at below-market rates. He looked at Section 111, which spells out the compulsory license system, the Supreme Court's Aereo decision, and came to a tech-neutral approach. 

"Courts consistently reject the argument that technological changes affect the balance of rights as between broadcasters and retransmitters in the wake of technological innovation," wrote Wu.

Now compare this to U.S. District Judge Rosemary Collyer's newly released opinion.

Whereas Wu wrote that the Aereo opinion likening a digital streamer to a cable system was "as close a statement directly in [FilmOn's] favor as could be made," Collyer decided that FilmOn has "over-read" Aereo. "The Court does not agree that the Supreme Court adopted a technology-agnostic interpretation of the Transmit Clause, let alone the Copyright Act as a whole," she writes.

Collyer seizes upon the more restrained language of U.S. Supreme Court Justice Stephen Breyer's opinion, particularly the section where he nods to how "different kinds of service or technology providers" could alter the conclusions — interpreted by some legal observers at the time at his attempt at not endangering cloud-based services — and gives herself opportunity to address Congress' intent in adopting the compulsory license scheme in 1976.

Wu may have ruled that it was "unnecessary to turn to the legislative history," but Collyer feels otherwise, deciding that the plain language of Section 111 doesn't support a broad interpretation.

"If it were true that Congress intended the definition of a cable system to embrace any and all new technologies, Congress would not have amended the Act in 1994 to specify 'microwave' as an example of a 'communications channel,'" she writes. "It also would not have enacted separate license schemes for satellite providers retransmitting distant signals. Congress did not consider the Internet in 1976 when §111 was enacted and has not amended the definition since to include anything resembling a distribution medium with a global footprint."

The opinions of Wu (here) and Collyer also differ on the approach to analyzing the interpretation of the U.S. Copyright Office with respect to compulsory licenses. The California judge roasted the agency for being "hostile to internet retransmission." The judge who is geographically closer to the U.S. Copyright Office, on the other hand, praises the administration agency's "unique expertise in this highly technical area of the law," and while not going so far as to give it deference under Chevron, decides to give it deference anyway under Skidmore, basically meaning that the agency's opinion isn't binding, but is nevertheless persuasive.

Again, both cases are going up on appeal — to different federal circuits. There will be a lot to chew on. Given the tenor of oral arguments during the Aereo case, the Supreme Court will probably not be too excited to revisit the issue of retransmission in the digital age. Unfortunately for them, if the split holds, this might not be the kind of dispute the justices can ignore.