Cabler thinks outside set-top box

Cablevision Systems is set to begin testing new technology that will allow its cable customers to record TV and films — without a DVR.

The Long Island-based cabler, the fifth-largest in the nation, plans to start testing technology that will allow cable users to save shows on Cablevision servers and then access those shows for playback at any time.

If successful, Cablevision will offer the service to all of its 2 million digital customers at a fraction of the cost of a set-top DVR.

That is, if the networks and film studios don’t try to stop it in court.

TiVo and other DVRs that enable users to make personal copies for their own use are protected under the “fair use” provision of U.S. copyright law.

But it’s unclear whether the same protection would be extended to Cablevision’s service because the physical copies won’t be stored on a device in the user’s possession, but on Cablevision’s servers.

To bolster their argument, each user will be allocated 80 gigabytes, or the equivalent of 45 hours, of “personal” storage space at Cablevision’s head-end facilities.

“The technology necessary to support this superior approach to DVR is here today, and in Cablevision’s case we can use it to put DVR functionality in more than 2 million digital homes instantaneously, without ever rolling a truck or swapping out a set-top box,” said Cablevision CEO Tom Rutledge.

But by rolling out the service without negotiating with rights-holders, Cablevision is making a calculated gamble that it will have more success in court than in protracted negotiations with myriad TV networks and film studios.

Cablevision execs spent the last week notifying the networks and other content rights holders that the service is imminent. Their argument is the new service replicates the functionality of a DVR, which is already in about 12 million U.S. homes.

But some industry sources contacted by Daily Variety expect Cablevision’s offering to unleash a new round of copyright litigation if Cablevision doesn’t come to the bargaining table.

“The ‘fair use’ to record belongs to the consumer,” said one industry source. “Once you move the recording and hard drive out of the home into a central facility, you end up with a radically different proposition.”

The concept of a “network DVR” has been a goal of Cablevision, which hasn’t aggressively pushed set-top DVRs due to their expense. If the company is successful, both in homes and in court, other cable operators will no doubt follow suit.

“If it’s legal, it is a significant positive for Cablevision in that they haven’t spent the money to roll out set-top DVRs, and this would be a far better return on investment than DVRs, which break and need to be replaced,” said analyst Rich Greenfield, managing director of Pali Capital.

The standard DVR has a life expectancy of about five years.

Copyright concerns derailed a similar Time Warner Cable initiative in 2003 known as Maestro, which would have allowed consumers to access all TV programming on-demand.

Instead, the technology is being used to power Time Warner’s Startover service, which prompts customers to restart a show if they join while it’s in progress. Time Warner inked deals with 61 networks before it offered the service.

But Cablevision execs have decided to go ahead without agreements. “Cablevision has evaluated the copyright implications of (the service) and believes that it is permissible under the copyright law,” the company said in a statement.

Cablevision plans to begin its trial on Long Island during the second quarter of 2006, with a broader rollout in the New York City area by the end of the year.

The service will be cheaper than a standard set-top DVR, for which Cablevision charges $9.95 in addition to a rental fee.

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