Internet vs. networks in TV tussle

As ISPs and consumer electronics vendors strive to turn the family TV into an Internet-enabled PC, one Canadian Web site is reversing the process - and apparently running the risk of an avalanche of lawsuits.

Since early December, Toronto-based iCraveTV.com has been capturing broadcast signals from 17 U.S. and Canadian channels, including CBS, NBC, ABC and Fox affiliates, and digitizing and streaming them over the Internet daily, for free. Viewers with a 56 kb/s modem or better can register at the iCraveTV.com Web site and get a list of available channels. Click on a channel, and a quarter-screen RealPlayer window pops up, framed by ads that iCraveTV sells.

Even with a faster T-1 connection, the video quality is abysmal, with jerky motion and frequent dropouts caused by Net congestion. But the audio is acceptable and may satisfy someone who's working at a PC when a favorite show comes on or when the nearest TV is tuned to another program.

"Bill Gates is spending a lot of money bringing the Internet to the family television," said William Craig, president of TVRadioNow, which owns iCraveTV. "We're spending a lot less to bring television to the Internet."

The service may be sufficient for viewers, but it's not finding favor with the broadcasters and content providers whose programming is finding its way onto the Internet. They claim iCraveTV is infringing on their copyrights and trademarks, and they have been threatening for the past month to sue the company. Potential litigants include four Buffalo, N.Y., TV stations, the U.S.-based North American Broadcasters Association and the National Football League.

To date, iCraveTV said it has not been notified of any lawsuits filed against it.

Copyright fees aside, the objecting parties don't like losing control of their programming. The NFL is concerned that games blacked out locally on TV will be available at the click of a mouse. TV affiliates object to the possibility that a TV ad for one brand of cola could wind up framed by a banner ad for its rival on PC monitors.

Another complication stems from the difference between Canadian and U.S. copyright laws. Under Canadian law, third parties such as cable and satellite companies can retransmit broadcast signals for free as long as the programming isn't modified. Those Canadian retransmitters also can pay retroactive royalties for copyrighted material, including that taken from U.S. signals. iCraveTV would be willing to do the same thing, provided the parties involved can set an amount for such payments, Craig said.

Last May, the Canadian Radio-television and Telecommunications Commission voted not to mandate the content of Web sites, saying it would stifle the growth of the young medium.

The iCraveTV site asks registrants to promise that they are using a PC in Canada. "Under no circumstances are individuals receiving this site from a computer terminal or device located outside Canada permitted to view the broadcast signals retransmitted from this site," a screen warns potential sign-ons.

But the security provisions are very easy to skirt by any viewers who know a Canadian area code, including the one provided on the site for the main offices of TVRadioNow.

Last week, Craig said the site would introduce technology that would allow Americans in specified U.S. area codes to log on and receive certain Canadian TV signals.

But the dispute taps into a deeper conflict destined to arise more often in the future - the clash between the legal controls applied to TV and cable broadcasting and the relative openness of the Internet.

Major U.S. Web portals such as America Online and Yahoo! have said they intend someday to bring TV sports and news to the Web. In fact, last November, when legislators added a last-minute provision to a satellite broadcasting bill that would have kept online companies from uploading such programming, large ISPs raised such a lobbying ruckus that the addition was dropped.

But AOL and Yahoo! have said they intend to negotiate copyright agreements in advance with content providers and are considering various pay-per-view models.

"iCraveTV.com is another wake-up call to the traditional media players who are not used to moving at the pace of Internet companies," wrote analysts at the Canadian media consulting firm MultiMediator Strategy Group. "The issue is no longer a `what if' but a `when' the Internet will deliver broadcast-quality programming."