Federal Appeals Court Reverses Decision On Network-DVRs

Network-DVRs could be back in vogue for cable operators, resulting in a boon for the business, all because of a federal appeals court decision that overturned a lower court ruling on the technology.

Network-DVRs essentially are the same as consumer-owned DVRs. The difference is the storage capacity that holds programming--the hard drive capability, located at the cable operator's head end.

A lower court ruling banned cable operator Cablevision Systems Corp. from using network DVR technology because it meant that the operator would hold programming that infringes on the copyrights of programming right holders. The initial suit was primarily filed by Turner Broadcasting System's Cartoon Network and CNN, with Fox, NBC, Disney, CBS and ABC joining in afterwards.

Cablevision and other cable operators say the functionality of the network-DVR technology is virtually the same as consumer-owned DVR. TV producers do not want cable operators to control programming-- especially in light of their concerns about fast-forwarding, where consumers can skip commercials.

Analysts say the decision, if upheld, could be a major advantage for cable operators as they compete with satellite programming distributors. Network-DVRs can be significantly cheaper to operate--with costs that can be passed on to the customers. With network-DVRs in place, overall DVR penetration, which now stands at 25% of U.S. TV households, could grow more quickly.

Other cable operators have started up their own network-DVR-like services, as well as offering consumer-owned DVRs. Time Warner Cable, for example, has "Start Over" and "Look Back."

Cox Communications is offering ABC prime-time shows through its video-on-demand service, and in an agreement with the network, the cable operator will disable the ability to fast-forward through commercials in that programming.

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