Web TV operation says copyright law gives it licence
OUT-LAW Radio, 15/05/2008
Live web TV operator Zattoo.com defends its approach to
simulcasting UK broadcasters' content without their permission
A text transcription follows.
This transcript is for anyone with a hearing impairment or who
for any other reason cannot listen to the MP3 audio file.
The following is the text spoken by OUT-LAW journalist Matthew
Magee.
15 May
Hello and welcome to OUT-LAW Radio, the weekly podcast that
keeps you up to date on all the twists and turns in the world of
technology law.
Every week we bring you the latest news and in depth features
that help you to make sense of the ever changing laws that govern
technology today.
My name is Matthew Magee, and this week we talk to the founders
of the controversial live online television business which claims
the protection of a copyright law loophole for its new UK
service.
But first, the news:
Microsoft appeals massive commission fine and Anti hacking laws
delayed.
Microsoft will appeal a €899 million European Commission fine,
it has said, because it wants a court to review the fine in order
to "seek clarity" on the issue.
Microsoft was fined because of its failure to comply with a 2004
decision from the Commission which found that it had behaved in an
anti competitive manner. That decision contained instructions for
how Microsoft should behave in the future.
The Commission found that it was not until October 2007 that the
US software giant complied with those instructions. It fined it
€899 million for that noncompliance on top of the €497 million fine
originally levied in 2004.
Microsoft has appealed that decision to the Court of First
Instance, Europe's second highest court. It had also appealed the
2004 ruling there that the CFI found in the European Commission's
favour.
Denial of service attacks will not be criminalised in England
and Wales for another six months despite measures lying unused in
existing laws since 2006. Changes to the Computer Misuse Act will
not be activated until October.
The Home Office confirmed to OUT-LAW that the long awaited
changes will not happen until October. It had previously planned
that the changes would be implemented in spring of this year.
The changes are already in force in Scotland. A Statutory
Instrument was passed last year which brought them into force on
1st October 2007.
The changes will make it clear that denial of service attacks
are illegal. Such attacks can disable a website or computer network
through the automated sending of countless, near simultaneous
messages which clog up the network.
The changes will also make it an offence to distribute tools
which are "likely" to be used for hacking computer networks. This
part of the law has been controversial because experts have said
that it could criminalise some research into hacking.
That was this week's OUT-LAW news.
Is it a parasitic venture that exploits a loophole in copyright
law, or is it a vital platform to help broadcasters re engage with
the YouTube generation?
OUT-LAW Radio will give you the chance to make up your own mind
about controversial streaming TV company Zattoo.com.
Zattoo has set the broadcast world aflame with controversy,
gossip and outrage since it announced that it had begun re
broadcasting the UK's five terrestrial channels on the internet
without the permission of the broadcasters.
The broadcasters have all told OUT-LAW that they have no
agreement in place with Zattoo, but it says that it is operating
within the law, and that a part of UK's copyright law that allows
cable operators to transmit TV signals also applies to it.
We talked to company founder Sugih Jamin and the woman who is in
charge of rights negotiation in the UK, Alexandra Illes, about the
company, its legal position and its future.
First, Jamin explained the roots of the company.
Sugih Jamin: So it was originally a PhD
project of one of my students. I’m a professor at University of
Michigan. After successful demonstration of the usefulness of the
project, we decided to commercialise it. The online television
technology either allows you to access the content on the web in a
single connection unicast way or they rely on peer to peer file
sharing. Whereas ours is peer to peer live streaming as opposed to
file sharing. So we don't impose such large delay on how you can
watch the content after - you know - once you start downloading
it.
Jamin says that the company always makes sure that it complies
with copyright and broadcasting laws, yet the BBC, ITV, Channel 4
and 5 all say that they do not have an agreement with it for the re
broadcast of their services.
Zattoo is showing all five broadcasters' main stations live,
with no ability to replay old shows. Illes explained why Zattoo
believes this is possible within the UK's Copyright Act.
Alexandra Illes: They clear the rights
like any other distributor of television programmes over a cable
infrastructure. What Zattoo does perhaps different from other
webcasting services is simulcasting live and that means unabridged,
unaltered and simultaneously. For the rights clearance we have been
treated equivalent to cable providers. The relevant factors in the
laws and that is on European level, namely the Cable and Satellite
Directive as well as in the national laws, is that the transmission
of the broadcasters' signals is simultaneous, unaltered, unabridged
to a close user group by cable, or through a cable infrastructure.
And that is what Zattoo does. Every television cable service needs
a licence. It needs to have an agreement - a carriage agreement -
in place with broadcasters. However the British copyright - the UK
Copyright Act - provides for the main commercial television
broadcasters' special provisions and that includes the BBC
channels, Channel 4, Channel 5, ITV and S4C. Not the digital
programmes but just their main programmes and we rely in our re
transmission on the copyright law.
Magee: And that says that you don't
need licences for those stations?
Illes: Within the territory of the
original terrestrial broadcast.
So is she right? Intellectual property lawyer Kim Walker of
Pinsent Masons, the law firm behind OUT-LAW, thinks so, up to a
point.
Kim Walker: They may have found a
loophole. The section appears to have been put in the Act to allow
what the old fashioned diffusion services to operate which was
designed to ensure that people in outlying districts, who wouldn't
otherwise have access to certain kinds of broadcasts, could have
the broadcasts sort of wired to them or sent to them down the -
presumably their copper wires - and it was to enable the diffusion
services to do that without infringing anybody's copyright.
But Walker said that this is a precarious right.
Walker: I did notice that the Act
says that the Secretary of State has power to withdraw the
permission at any time so it did strike me that, if this is a
loophole which as a matter of policy the government isn't happy
with people exploiting, then it would appear to be a relatively
simple matter for the Secretary of State to issue regulations
saying: by the way these don't apply to - you know - as a way
around to infringing copyright in broadcasts.
Illes disagrees; she doesn't see the right as being in the gift
of a minister at all.
Illes: The law itself cannot be
changed by a ministerial order so that's not quite correct.
Zattoo's exemption only applies within the UK, and Jamin said he
is confident that the company can identify where someone is from
their internet protocol address, and that 'spoofing' your address
and appearing to be somewhere you are not is not as easy as it once
was.
Zattoo and broadcasters are unlikely to agree on the exact scope
of the law, so it might have more luck trying to win TV stations
over. Jamin says his company can reach a demographic that staid old
TV stations can only dream about.
Jamin: Given the way the next
generation use the computer as the main source of communication and
information, they have lost touch with live TV. They are basically
a lost generation to live TV and Zattoo, for the first time, will
bring live TV back in contact with this, what we call the Facebook
generation. We bring live TV to the computer allowing the Facebook
generation to access information through live TV again. They will
be getting the news and entertainment through the internet and from
YouTube, from Hulu, from all the other sites that provide non live
TV content. Our audience's demographics is 18 to 34 and this
generation will not have watched live TV otherwise and we bring
this generation back to the broadcasters.
Because it can't in any way alter the broadcast streams it
shows, Zattoo makes its money by showing adverts in five second
sections when a user switches from one channel to another. It
claims 2.2 million users and expects to have 5 million by the end
of the year, with 400,000 UK users by the end of its first year of
UK broadcasts. The company says it has already paid out nearly 2
million euros in royalty payments across its eight
territories.
Broadcasters may choose to fight the company, or they might agree
that it is a cheap way to reach disenfranchised users. Jamin is
keen to emphasise his experience in Germany when he argues that
negotiations are ongoing with UK TV stations. There, he said, it
took 18 months of negotiating before broadcasters came on board.
The same, he hopes, could still happen here.
That's all we have time for this week, thanks for
listening.
Why not get in touch with OUT-LAW Radio? Do you know of a
technology law story? We'd love to hear from you on radio@out-law.com.
Make sure you tune in next week; for now, goodbye.
OUT-LAW Radio was produced and presented by Matthew Magee for
international law firm Pinsent Masons.
