Facing Copyright Challenge, ivi TV Sues the Networks First

Online start-up says that the law allows it to retransmit broadcasts without paying fees; broadcasters disagree

The major broadcasters are plenty angry with  ivi TV's controversial plan to retransmit live broadcasts without paying fees.

Facing legal challenges, the Seattle-based online startup is taking the fight to the networks just a week after officially opening for business.

The company is suing NBC Universal, CBS, Disney/ABC, Fox the CW, WGBH Boston, and Major League Baseball among others over its right to air their programming without a formal agreement.

In a suit filed Monday in Seattle district court, ivi is seeking declaratory judgment that it is not violating U.S. copyright laws. The company is also seeking attorneys fees.

ivi offers an app that gives viewers live access to more than 20 channels for just $4.99. The only catch is that the company never cleared its plans with the networks.

Instead it's operating in a nebulous section of copyright law. Because it is online only, ivi maintains it is not governed by the Federal Communication Commission (FCC) and consequently does not have to pay retransmission fees in the way that a Comcast or Cablevision would.

It does pay the networks royalties on the content that it airs.

“This is not like Napster. We are conforming to the letter of the law,” company founder Todd Weaver told TheWrap. “It would be ideal if they could see that this is the future and would embrace future rather than fight against it, but we fully expected this kind of knee jerk reaction.”

ivi says it has received cease and desist letters from most of the major networks.

“We have gone to great lengths to protect copyright,” Weaver said. “We’re offering networks a chance to monetize their content.”

That deal is not good enough for broadcasters or their supporters though.

"It is blatantly illegal to steal broadcasters' copyrighted works and signals. We strongly support the actions taken by broadcasters to combat copyright abuse," Dennis Wharton, a spokesman for the National Association of Broadcasters, said.

At the beginning of the decade, Canadian website iCraveTV made a similar bet on retransmitting broadcasts without the network’s consent, but ended up succumbing to legal challenges.

Weaver said the difference here is that his company charges a subscription fee, while iCrave tried to make money off of advertising.

Weaver said that he doesn’t believe that the blowback from networks will prevent ivi from signing distribution pacts with premium cable channels and said that since the company’s kick-off he has received interest from a number of channels.