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Fox to Challenge Ruling Granting Streaming Site Rights to Compulsory TV License

Fox Broadcasting said it will appeal a U.S. federal court’s decision finding Internet video-streaming site FilmOn — which has been waging a five-year legal battle with broadcasters — is entitled to a compulsory license to retransmit TV station programming online, just like a cable operator.

In the decision, issued Thursday, Judge George Wu of the U.S. District Court for the Central District of California said federal copyright code does not distinguish between traditional cable TV providers and online services like FilmOn with respect to rights to a compulsory retransmission license.

“Courts consistently reject the argument that technological changes affect the balance of rights as between broadcasters and retransmitters in the wake of technological innovation,” Wu wrote. “Instead, courts have left such rebalancing to Congress.”

The ruling comes after Aereo, the startup that also was delivering over-the-air TV signals to Internet subscribers without permission, was effectively shut down after the Supreme Court in June 2014 found it violated copyright laws by not paying license fees to broadcasters. That’s because Aereo was functionally equivalent to a cable system, the high court ruled.

Subsequently, Aereo latched on to the Supreme Court’s comparison of its service to cable TV, but it was unsucessful in making that argument to the U.S. Copyright Office. Wu, in his decision, said the Supreme Court’s ruling did not apply to the FilmOn case because the court was not addressing the question of whether Aereo was entitled to a compulsory TV license.

Fox said it plans to appeal the decision and that it “fully expect(s) to prevail.” A prior injunction barring FilmOn from retransmitting broadcast programming over the Internet still remains in place, pending appeal.

“This advisory opinion contravenes all legal precedent,” the broadcaster said in a statement. “The court only found that FilmOn could potentially qualify for a compulsory license, and we do not believe that is a possibility.”

Separately, the Federal Communications Commission last year initiated a rulemaking proceeding soliciting comments about whether over-the-top services should be explicitly treated under the same rules that apply to pay-TV operators.

In addition to Fox, plaintiffs in the case include ABC, CBS and NBC and other TV stations, distributors and rights holders.

FilmOn was founded by Greek billionaire Alkiviades “Alki” David, whose family owns a Coca-Cola bottling empire. David, whose businesses also include streaming site BattleCam.com, styles himself as an entertainment-industry provocateur.

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