Suit to stop Dish Network’s ‘Hopper’ gets mixed reviews from electronics industry

The lawsuit filed by broadcasters seeking to stop Dish Network from providing commercial-skipping technology to its customers drew mixed reviews from industry observers, with some seeing it as a cynical attempt to halt progress.

NBC, CBS and Fox filed a lawsuit Thursday against satellite TV operator Dish Network to halt distribution of its "Hopper" DVR and its adapter for Slingbox streaming devices.

The Dish Network device has drawn the ire of broadcasters because of a feature that allows consumers to fast-forward over commercials. While many DVRs allow consumers to skip ahead 30 seconds at a time, and while any DVR will allow consumers to fast-forward commercials, broadcasters say the feature on Dish's new device in particular undermines the traditional television advertising model and threatens to harm revenues.

The first iteration of the now-popular Digital Video Recorder, made by a company called ReplayTV, was also the target of a similar lawsuit, which drove ReplayTV into bankruptcy.

And the DVR's predecessor, the VCR, was also the target of a lawsuit which culminated in a landmark Supreme Court ruling in Sony v. Universal Studios, the "Betamax" case, which enshrined in case law the consumers' right to "time shift" television programming.

That is why Consumer Electronics Association CEO Gary Shapiro said this round of lawsuits is "triple deja vu" because the "Betamax" ruling extends to DVR technology like Dish Network's DVR and its commercial-skipping technology.

"The holding in that case was very specific and very clear," Shapiro told The Hill. "You have the right to record…over the air broadcast television -- it's not copyright infringement."

Lawyers for Dish Network maintain that the DVR has long been recognized as a lawful technology, explaining in their complaint that "Auto Hop is a legitimate, legal DVR feature, and Dish is in full compliance with copyright law…"

National Association of Broadcasters (NAB) vice president Dennis Wharton told The Hill that "ultimately the courts are going to decide that, and we're cautiously optimistic that the courts are going to rule in the networks' favor."

Wharton wouldn't comment on the similarities between the current suits and the Betamax case.

While Wharton noted that NAB isn't a party to the suit, he did not back off from supporting the broadcasters' litigation.

"Obviously we support the members of NAB and we believe their case will prevail," he said. 

None of the major broadcast networks were immediately available for comment. 

Consumer Electronics Association’s Shapiro explained that the commercial-skipping feature isn't even enabled until the day after the recorded programs air, and so consumers who view programming at the time it is aired will still get the full complement of advertisements included in the broadcast.

But what is most troubling to Shapiro is the overarching goal of the broadcasters' lawsuits. "What they're talking about…is saying that a certain technology should be illegal," he said.

"The fact is that their legal arguments and their policy arguments are very weak," he said.

Shapiro also compared the lawsuits to the campaign being waged by the broadcasters against Barry Diller's Aereo startup, which allows consumers to watch broadcast television by connecting an antenna to the Internet.

"If you look at the entire technology industry…whenever there is something new, that always threatens something old," he said.

Shapiro said that broadcasters, having lost market share every year for the past 50 years thanks to cable, satellite and video games, have a "knee jerk, anti-technology reaction."

"When, as a public policy or legal matter, does it make sense to make technology illegal?" he asked.

But Dow Lohnes attorney Jim Burger thinks there is more to this case than a rehashing of old rulings. "This could be the Betamax case for the 21st century," he said.

Burger said the key to the broadcasters' and to Dish's case will be the functionality of the "Auto Hop" technology and the potential economic effects of commercial skipping on a large scale.

"Maybe there's a different case [than Betamax] if there's financial harm," he said, noting that NBC's lawsuit is "replete" with cases where the networks are harmed by commercial skipping, including the fact that NBC itself offers commercial-free programming for a fee.

"If you think about the fair use criteria [of case law]. one of those is the effect on the commercial market for a product," Burger said.