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ICLE files an Amicus Brief In Fox v. Aereo Killer PDF Print E-mail

On Wednesday, the International Center for Law & Economics, along with the Competitive Enterprise Institute, filed an amicus brief in the Ninth Circuit Court of Appeals supporting the appellants in Fox Television Stations, Inc. v. Aereo Killer LLC. The case arose out of Aereo Killer’s Internet video platform, from which it would retransmit content without either the consent of the broadcast stations or permission from the holders of copyrights in the content it distributed.

Aero Killer essentially seeks to engage in regulatory arbitrage by, on the one hand, claiming that it qualifies for compulsory licenses as a “cable system” under Section 111 of the Copyright Act, while on the other hand seeking to avoid applying for “retransmission consent” under the Cable Act.

In our brief we explore the issue of the interplay between “retransmission consent” and “compulsory licenses,” and on Aereo Killer’s unjust and illegal attempt to create a carve out for itself in violation of Congressional intent:

Defendants seek a compulsory license under Section 111 of the Copyright Act, which would allow them to sell a service that retransmits copyrighted television shows without permission from the program owners—while paying only statutorily determined royalties that do not come close to market rate for Plaintiffs’ programming. At the same time, however, Defendants have configured their service so that they do not need to obtain consent from the broadcasters whose signals they wish to retransmit, because Internet-based retransmission services do not meet the Communications Act’s definition of an MVPD. On the latter point Defendants are correct: Internet-based retransmission services are not MVPDs. However, treating their service as a “cable system” under the Copyright Act, but not under the Communications Act, is contrary to the statutory framework Congress created.

In practice, and by design, therefore, a service that retransmits television programming is subject to both provisions, or neither of them, depending on the technical details of the service. Congress affirmed its intent that these provisions go hand-in-hand in 1994

Congress crafted the statutory regime as it did precisely to prevent the unjust enrichment of television resellers at the expense of broadcasters and copyright owners. Defendants do not operate a cable system and are thus ineligible for the compulsory copyright license. If they wish to retransmit plaintiffs’ television programming, they are free to bargain for a copyright license, as so many other Internet-based video distributors have done.

ICLE files comments on the Telecom Regulatory Authority of India's Consultation Paper on Differential Pricing for Data Services PDF Print E-mail

Last week ICLE filed comments responding to the Telecom Regulatory Authority of India's Consultation Paper on Differential Pricing for Data Services.

Our comments explain why banning "zero-rating" and other "differential pricing" business models in India would be a costly mistake for the country. As we note in our comments:

The approach taken in this Consultation to the the question of competition and consumer harm risks putting the cart before the horse. Before special rules are crafted to attempt to address perceived threats to consumer welfare, existing and effective rules of general applicability can and should be employed to address actual harms: most significantly, the well-developed principles of competition law that have been in force in India since the enactment of the Competition Act in 2003.

Importantly, competition laws are typically employed to address actual harms on a case-by-case basis, generally eschewing per se condemnation of business arrangements (like vertical integration) that impair competition only in limited circumstances. The error costs of over-enforcement of TRAI’s principles of transparency and nondiscrimination. likely threaten more harm than do the risks of underenforcement.  In the face of rapidly accelerating technological changes — which will continue to present new and unanticipated possibilities for different tariff models — an effects-based approach under the competition laws that conducts an ex post analysis of conduct would be far more prudent. Instead of foreclosing or mandating specific conduct, such an approach would permit and foster experimentation, innovation and technological development, intervening only where actual competitive harms develop.

TRAI has a commendable history of “light touch” regulation of tariffs, reflecting the Authority’s understanding that proper regulation leaves room for market players to adapt technology and to tailor their services to evolving consumer demand. There is nothing new or unique about internet companies that would justify breaking from this approach — in fact there is much to be gained in continuing to allow differentiation as internet platforms discover better ways to enhance consumer welfare.

We've discussed non-neutral pricing and related issues extensively in the past -- see, among many others:

Our full comments to the TRAI are available here.

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