Aussie rules on cloud PVR test laws

Optus defends as Telstra goes on the offensive

By Richard Chirgwin, 15th September 2011

A service launched by Optus in July is going to be the first high-profile test for the legality of cloud-style PVR services in Australia.

While Optus’s TV Now service isn’t Australia’s first – for example, beem.tv went live much earlier this year – the carrier has stretched the definition of time-shifting by shrinking the lag from live television to just a couple of minutes (for iPhone users; others can’t hit the “replay” button until after a program ends).

Since live sports are the true “river of gold” in Australian broadcasting, and since Telstra is a major sports sponsor, the incumbent is crying foul. The first serious skirmish will be today, when Optus will ask the Federal Court to restrain two sports codes – the Australian Football League and Australian Rugby League – from bringing lawsuits against it.

The two codes are the spear-carriers in the battle because they, not the sponsors, own copyright to the games. However, it seems clear that it’s Telstra who is stung by the service: the carrier says it could abandon its sponsorships (worth more than $150 million to the AFL, for example) if TV Now isn’t stopped.

Optus, on the other hand, defends the service as being akin to using a VCR to record matches; since time-shifting is legal in Australia, Optus hopes the Federal Court will agree with its analogy.

Others – including beem.tv – are bound to be watching this with interest.

Cloud PVR services have attracted lawsuits internationally, but not yet in Australia. Exactly why not is open to speculation, but presumably broadcasters have seen them either as a fringe activity that’s not worth their time, or because they’re legal. And sports sponsors presumably don’t mind where their exposure comes from, as long as they get the exposure.

Optus’ actions seem provocative, because of its close-to-the-bone definition of “time shifting”, and because it’s pulling the beard of a competitor who has a litigious history.

I would be surprised if today’s hearing put an end to the argument. Optus must surely be expecting to need to defend TV Now, possibly all the way to the High Court. However, if possible Optus will want to keep TV Now on the air for the years that the lawsuits are likely to run.

So my guess is that today’s hearing is a tactic designed to head off the risk of the football codes applying for, and receiving, an injunction that pulls sports from TV Now while the case runs. ®

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