Time Warner spat over app goes to court

Controversy over iPad app heats up

The brawl over Time Warner Cable’s iPad app is headed for court as the cable operator and Viacom argue over differing interpretations of carriage agreements inked long before tablet computers emerged as a primetime TV viewing platform.

The cable operator Thursday filed a request for a declaratory judgment against Viacom, which has protested the inclusion of its channels on the app, in U.S. District Court for the Southern District of New York. Viacom promptly countersued, alleging breach of contract and copyright violation. The company also issued a statement accusing TW Cable of having “blatantly grabbed unlicensed content” that it removed from the app after the conglom threatened to sue.

Time Warner Cable launched its app, which allows viewers to watch selected channels on the iPad so long as they remain in their homes, on March 15. At the outset it included seven channels from Viacom’s MTV Networks, but the cable operator withdrew those channels last week along with webs owned by News Corp. and Discovery Networks.

TW Cable is basically asking the court to uphold its right to transmit Viacom-owned cable channels via its iPad app, which the MSO is arguing is covered under the affiliate agreement between the two companies.

The affected Viacom channels include MTV, VH1, BET, CMT, Comedy Central, Spike and Nickelodeon.

Unknown is whether more lawsuits are to come considering Cablevision also launched a similar iPad app last week, which prompted the YES Network to publicly allege that the MSO had no right to do so. In addition, News Corp. and Discovery are believed to have filed cease-and-desists along with Viacom against TW Cable, but neither has made any subsequent legal moves.

The prospect of legal action has hovered over this conflict since it began, with sources telling Variety two weeks ago that TW Cable was just days away from being sued.

It turns out that just hours before a lawsuit was filed, TW Cable said it would remove the channels in question, thus averting the suit. But then TW Cable countered with its request for declaratory judgment, which triggered Viacom’s lawsuit.

The lawsuit illuminates the behind-the-scenes wrangling over the app, which began as early as December, when TW Cable first publicly noted its intent to pursue the technology. Legal reps for Viacom reached out shortly after to warn TW Cable that it was stepping outside the bounds of its affiliate agreement.

TW Cable execs notified Viacom reps in a face-to-face meeting March 8 the app was to be released at the end of the month. Though Viacom made its objections clear, TW Cable suddenly moved up the release date to March 15 without approval of the programmer, which learned of the accelerated launch only a day before.

The Viacom-TW Cable dispute turns on differing interpretations of the affiliate agreement between the two companies. TW Cable claims to have “intentionally obtained from the Viacom defendants a grant of broad distribution rights that is silent as to devices,” according to its suit.

Viacom points to a history of technological supplements to its core video offering that required amendments to its deal with TW Cable, including video-on-demand, high definition and its “Start Over” technology, which allowed viewers to restart a program in progress.

There was also a 2006 agreement in which Viacom specified certain programs that could be made available via broadband, including NickArcade.

But TW Cable points to a brief 2005 experiment that put programming on PCs for MSO subscribers in San Diego, called “Broadband TV”: Viacom filed a cease-and-desist letter but later relented.

Viacom justifies its objection to the app in a number of ways in the lawsuit, from raising questions about the security of the transmission to finding fault with the degradation of the picture and audio quality.

Viacom also argues that iPad transmission is illegal because the affiliate agreement restricts distribution through services regulated under Title VI of the Communications Act. That clause requires cable operators to provide parental control/blocking capabilities or provide emergency alerts, which the app cannot do.

It turns out that the row over the iPad app may just be a warm-up to another conflict between the companies. In the lawsuit, TW Cable mentions it is in the process of finalizing an application for its subscribers to view programming on Internet-connected TVs without set-top boxes.TW Cable also announced Thursday that it is adding seven channels to the I Want TWCable TV app, including Oxygen and Lifetime. The app now has 50 channels.

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