When Channel Surfers Flip to the Web: Copyright Liability for Internet Broadcasting(*).

• Author: Fan, Baoding Hsieh

1. INTRODUCTION

   This Article argues that retransmission of video and television (TV) broadcasts on Internet Web sites should benefit from some system of compulsory (or statutory) copyrights. However, the applicability of a compulsory copyright license for Internet video will depend on what model ultimately evolves. This Article proposes two possible paradigms for the future. On one hand, "Internet TV" would provide continuous, real-time retransmission of over-the-air broadcast programming in direct competition with cable or direct broadcast satellite (DBS) systems, thus necessitating a compulsory copyright scheme. On the other hand, a pay-per-view "video library" scenario can rely solely on the market to determine appropriate royalty rates in response to consumer demand.

   In the last decade, the rapid growth of cyberspace has primarily resulted from two symbiotic forces--technological advancement in multimedia capability and exploitation of the vast global marketplace made possible by such developments. Society is in the midst of what some call a "convergence,"(1) where changes in regulatory and technological environments have significantly blurred the line between traditional telecommunications services and entertainment. The most well-known illustration of this phenomenon is undoubtedly the Internet.

   Digital streaming has enabled real-time transmission of audio and video over the expansive network. The technology has prompted many companies to create software to enable Internet broadcasting (also known as Webcasting). Many content providers, such as television networks and sports and entertainment programmers, have jumped on the bandwagon and expressed their support for the new method of delivery.(2) As a result, the cyberspace experience is becoming more and more like TV everyday, but with one major advantage: each viewer can potentially custom tailor what he sees and when he sees it.(3)

   Furthermore, streaming video has the potential to "open up telecasting beyond the large corporations normally associated with broadcasting."(4) Anyone with a media server and a fast connection theoretically can set up his own Web site from which he can broadcast original programming or retransmit network favorites. The potential for a far greater number and diversity of participants sets the Internet broadcasting industry apart from the cable and satellite industries--each with relatively few providers.

   How should such Internet broadcasts be treated in the legal world? Should the current copyright regime be modified to handle this new medium? Currently, retransmission capabilities for cable and satellite systems are secured through compulsory copyrights, as granted through legislation.(5) In 1997, the Copyright Office issued a comprehensive review of the copyright licensing regimes governing the retransmission of over-the-air radio and television broadcast signals by cable systems, satellite carriers, and other multichannel video providers, and it recommended against a congressional grant of compulsory licensing to Internet retransmitters.(6) In support of this opinion, the report cited the ongoing national and international debate over the major issues posed by instantaneous worldwide dissemination of broadcast signals via the Internet.(7) A letter dated November 10, 1999, from the Register of Copyrights to the U.S. Senate Committee on the Judiciary reaffirmed this conclusion.(8)

   This Article contributes to the discussion by suggesting that online programming retransmitters should also profit from some system of compulsory copyrights.(9) However, it proposes that the need for a compulsory copyright license for Internet video will depend on the nature of the model that is eventually developed. For example, if Internet TV is intended to provide continuous, real-time retransmission of over-the-air broadcast programming as an alternative to cable or DBS systems, a compulsory copyright scheme would be required. On the other hand, under a pay-per-view video library scenario--whereby viewers can choose a particular program to watch and pay accordingly--the market should be able to adequately manage royalty rates in response to consumer demand, and government intervention would be neither desired nor necessary. This Article engenders widespread interest to any practitioner whose work involves Internet-related issues, as well as mass media and broadcast communications.

2. THE REALITY OF WEBCASTING

   1. Digital Streaming

      With digital streaming, users can view information in real time without having to wait for the data to download and be saved onto their machines. "No more waiting [twenty], [thirty], even [sixty] minutes to download a video clip before playing it. With streaming video, you just click and watch."(10) Streaming software establishes a "buffer" of memory in the user's computer random access memory to which the Internet site downloads a few seconds of video or audio.(11) As the video or audio is played from the buffer, the Internet site replaces the played material with the next few seconds.(12) This continuous refreshing of the buffer results in a continuous real-time playback.(13) Supporters of Webcasting believe "that these improvements will facilitate the introduction of video and audio on-demand services across the Internet and the workstation reception of what has been referred to as TV-like broadcasts."(14)

      RealNetworks, Inc. (formerly Progressive Networks), based in Seattle, Washington, develops and markets software products and services designed to enable users of personal computers (PCs) and other consumer electronic devices to send and receive audio, video, and other multimedia services using the World Wide Web (Web). At the National Association of Broadcasters Convention in April 1997, the company used its RealVideo technology to demonstrate the first live video broadcast of a Major League Baseball game over the Internet.(15)

      RealNetworks claims that its newest product, RealServer 7.0, has up to 250% more capacity and more reliable client connections to deliver VHS video quality over eight hundred kilobits-per-second connections and MPEG-1 quality video at half the data rate previously needed.(16) Content creators first use RealProducer to convert content into a format accessible by RealServer, and end-users install RealPlayer clients on their PCs to view the streaming media. "In their latest quarterly filing with the Securities and Exchange Commission (SEC), RealNetworks reported over [eighty] million registered users of their RealPlayer clients."(17)

      Microsoft says its competing Windows Media Player (WMP) is rapidly gaining acceptance, citing a PC Data Online survey that showed sixty percent of consumers who access streaming media use WMP.(18) At the Streaming Media West 1999 conference in San Jose, California, then-Microsoft Chairman Bill Gates acknowledged in his keynote address that "[s]treaming media will play an increasingly visible role in business as companies make more than text-based information available on their Web and commerce sites."(19) However, so far only about nine percent of U.S. companies use streaming media technology, and the focus is on the consumer market.(20)

      Microsoft's Windows Media Software will be integrated into General Instrument Corporation's digital set-top boxes to enable streaming of audio and video content from the Internet in addition to regular cable programming.(21) In addition, the software giant has signed a thirty million dollar investment and product deal with Internet audio and video delivery provider InterVU, Inc. to "expand InterVU's broadband streaming media network with [Microsoft's] Windows Media platform."(22) Furthermore, it has enlisted over forty-five partners in "its `Windows Media Broadband Jumpstart' initiative, which provides consumers with high-speed connections to the Internet with access to online music videos, movie trailers, full-length feature films, and CD-quality Internet radio, among other features."(23)

      QuickTime TV (QTV) is Apple Computer Inc.'s Internet-based network for streaming audio and video. Macintosh and Windows users can view QTV's content--including ABCNEWS.com, ESPN.com, FOXNEWS.com, CNN.com, MTV, Nickelodeon, and HBO--using Apple's QuickTime 4 player, which can be downloaded from Apple's Web site for free.(24)

   2. Broadcast Interest

      Currently, Yahoo! Broadcast Services is the largest broadcast network on the

      Internet. Founded in 1995 as AudioNet, Inc., it provides a medium for broadcast companies to deliver multimedia content and programming to Internet audiences around the world.(25) The Interact broadcast network Webcasts live signals from 420 radio stations and networks, fifty-six television stations and cable networks, and game broadcasts and other programming for more than 450 college and professional sports teams.(26)

      Other, more traditional broadcast networks have ventured directly into Webcasting as well. For example, CNN and Fox News have several streaming-video clips for viewing on their Web sites.(27) ABCNews.com has archived Webcasts of the Millennium celebrations, and MSNBC.com streams news reports twenty-four hours a day. This is only a small sampling of the video content available on the Internet today. Merrill Brown, Editor-in-Chief of MSNBC.com, stated:

      The leaders in Internet news will increasingly be making their offering vastly more videocentric than it is today. We're just about at the end of the first generation of Internet news, which is text- and photo-based, and we're moving(28) very rapidly to the next few years, which will be more video-based. According to a media analyst, "as the quality of video streaming through the Internet and the quality of content each advance, AOL could as readily deliver pay-per-view movies, sitcoms[,] and news as it delivers online stock quotes."(29) Panelists at the October 1999 DTV Summit/Digital Hollywood conference urged attendees to "begin production...