FilmOn Wants Appeals Court To Reconsider Cable License Denial

Streaming video distributor FilmOn is asking the 9th Circuit Court of Appeals to reconsider its ruling that the company isn't entitled to a cable license.

The decision, issued last month by a three-judge panel, "threatens Internet-based broadcast television retransmissions," FilmOn says this week in a petition asking the appellate court for a new hearing. "Hindering the development of this technology will maintain artificially high cable television costs, reduce consumer choice and frustrate the important governmental interest in promoting broad public access to broadcast television."

That ruling reversed a decision issued in 2015 by U.S. District Court Judge George Wu in the Central District of California, who said FilmOn may be entitled to a compulsory license, which would allow it to stream TV programs.

FilmOn, owned by billionaire Alki David, has spent years battling with broadcasters over streaming video. The long-running fight has drawn the attention of a host of outside parties, ranging from digital rights groups -- who side with FilmOn -- to other entertainment companies, who are aligned with the broadcasters.

Initially, the company used a system similar to defunct streaming video distributor ivi TV, which attempted to distribute television online. Like ivi, FilmOn X argued that it should be considered a "cable system," and entitled to a compulsory license. The 2nd Circuit Court of Appeals in New York ruled that ivi wasn't a cable system because it didn't limit its streams to specific geographic locales.

FilmOn then re-launched using the same system as the defunct streaming video company Aereo. Broadcasters including Fox, ABC, NBC and CBS sued Aereo and FilmOn for copyright infringement, arguing that they couldn't transmit shows without first obtaining licenses.

The Supreme Court sided with the broadcasters in 2014, ruling that Aereo infringed copyright by transmitting TV shows without a license. The court said in that ruling that Aereo's platform was "for all practical purposes a traditional cable system."

Aereo and FilmOn both stopped streaming unlicensed programs after that decision came out. Aereo suspended operations altogether, but FilmOn still streams programs in the public domain, and programs it licenses.

The company also continued its legal battle against the broadcasters, arguing that it should be entitled to a cable license due to the Supreme Court's language comparing Aereo to a cable system.

Wu agreed with FilmOn, writing that the Supreme Court's characterization of the company's technology is "about as close a statement directly in defendants' favor as could be made."

The broadcasters appealed to the 9th Circuit, contending that FilmOn didn't meet the Copyright Act's definition of cable system as a "facility" that receives and retransmits signals.

Last month, three appellate judges on the 9th Circuit sided with the broadcasters. Those judges wrote in a 25-page opinion that they were relying on decisions by the U.S. Copyright Office, which has said that Web-only distributors aren't entitled to cable licenses.

FilmOn argues in its newest court papers that the appellate judges shouldn't have deferred to the Copyright Office. "Congress has never delegated to the Office authority to promulgate binding interpretations of U.S. copyright law," FilmOn argues. "In this case, the court should not permit the Office -- part of the legislative branch -- to issue binding interpretations of law."

The company is seeking a rehearing in front of 11 of the 9th Circuit's 29 judges.

In addition to the fight in California, FilmOn has argued to two other appellate courts -- the D.C. Circuit and 7th Circuit -- that it's entitled to a compulsory license. Those cases are still pending.

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