NBCU exec: ‘Aereo creating loophole as business plan’

A senior executive at NBCUniversal has suggested that Internet-streaming service Aereo is seeking to exploit what may be seen as loopholes in congressional intent relating to the retransmission of broadcast signals.

Richard Cotton, executive vice president and general counsel of NBCUniversal, told Reuters that the legal battle that the major US broadcasters were currently engaged in with the start-up was worth fighting. “In terms of Aereo, the congressional intent is so clear as to what rules should apply to for-profit corporations that make money by retransmitting a broadcast signal that litigation seemed a more direct approach. I would characterise Aereo as really an individual business that’s trying to create – I don’t know if it exists – a loophole as a business plan,” he suggested.

Responding to the suggestion that Aereo has purposely tried to build its technology around legal precedent, and that copyright law would have difficulty keeping up, Cotton said that those who created works that involve the investment of time and human effort had the rights to control how their work is distributed. “I think it’s a fundamental precept. Those pillars remain critically important. I would keep separate the question of how does one remedy wholesale violations of those principles,” he added.

Cotton, who estimates that he spends 50 per cent of his time on intellectual property issues, saw two points of emphasis in relation to anti-piracy issues. “The role of the anti-piracy efforts on the legal side is to try to make illegal content less easily available. From the highest strategic perspective, our goal is to make the legitimate access points to content more convenient and more high quality to the consumer. At the same time, we want to protect the company’s innovative distribution efforts,” he said.

He suggested that the video-sharing sites, advertising networks, credit card companies, search engines, domain name registrars, universities and Internet service providers were “vital” in helping to protect IP. “YouTube four or five years ago put in place content recognition technology, which now makes it quite difficult to upload copyrighted content unless the content owner has entered into a licensing agreement with YouTube and has decided to allow its content on the service. More than a month ago, the five major ISPs in the United States started forwarding notices that they receive from content owners about IP addresses identified as uploading and downloading content illegally,” he noted, pointing to the successful legal downloading of easily-available Sarah Palin Saturday Night Live skits on NBC.com and Hulu. “It was very hard to find them, if you could find them at all, on YouTube because they were being blocked.”

“Also, in the summer of 2011, the White House brokered an agreement in which content owners can file a complaint with major credit card companies and PayPal if they believe a website is either overwhelmingly dedicated to distributing stolen digital content or distributing counterfeit physical goods. In response to a request, the payment processors will investigate it, and may stop doing business with that site.”

In terms of scenarios in which litigation was an effective method of stopping counterfeiting, Cotton suggested it was important in clarifying areas of the law that are unclear. “So, for example, we were one of the plaintiffs in the Grokster litigation, which made clear that websites that induced the unauthorised sale of infringing content were liable for their actions. But litigation is a very slow and cumbersome process. And we’re dealing in the warp speed of the Internet. Litigation can only make limited contributions. The most important focus to induce real change is through efforts to reach co-operative agreements with the actors that are engaged in how the broadband Internet ecosystem functions,” he stated.

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