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Legal chapter of iTV

Tracking and Preparing for an Emerging iTV Market

Written September, 2002. Published by NAB Spring, 2003

by Michael Leventhal

As with any new technology, the story of its successes and failures will in no small part be written in the courtrooms and legislative chambers. Networked technologies, in particular, are prone to more legal action, both litigation and regulation, because of the large scale potential for mischief by any number of participants.

We have already seen that the definition of ITV is very broad, from the minimal intelligence of the Digital Video Recorder, or “VCR on steroids,” to the state of the art sophistication of computer interactivity through a set-top box in the family entertainment center. Since some of what ITV will become is a friendlier networked computer interface, it will be helpful to look at the issues confronting the broadband internet industry as it presently exists. Add to that concerns that emerge in a more traditional entertainment environment, stir in a healthy portion of networked online gaming, and you have a lot to think about.

While legal issues in ITV don't always look like they arise out of the litigation or legislation, all legal matters come back to one or both of these areas. If a hardware manufacturer does not regulate itself in, say, the area of copy protection devices or anti-porn chips, it must worry about being regulated by the government. If a software developer is not being sued by a content company, it may well be because it has anticipated the coming lawsuit and modified its offering to avoid the flak.

Let's take a look at the issues that will confront the ITV industry as a whole. While we do this, remember that the ITV industry is really an amalgam of other industries (that convergence thing again!) including the entertainment industries, advertising, software, computer and television hardware industries, cable, satellite, and telecommunications, among others. Each of these industries has a significant stake in the successes and/or failures of ITV, and those interests are not always aligned. In fact, it is unlikely that any issue we will address is seen similarly by all industries. This situation makes for interesting and constant battles.

As we dive into the specifics of the legal obstacle course faced by the ITV industry, a word about terminology. As the author of this chapter, I am going to take mild license with some terms. Human beings are more than carbon-based life forms that buy things, so I will not use the word “consumer” to describe us. Since interactive television is a medium that requires participation, the term “viewer” doesn't fully describe us either. Nor does “user” fully acknowledge the value of the linear entertainment experience to the medium. So, I am going to ask the reader's permission, or at least forgiveness, in using the term “viewser” to designate the person on the receiving end of the ITV experience; those of us on couches with remotes in our hands, or at desks with keyboards under our fingers. I will also ask the forgiveness of whoever it was that first coined the term. It wasn't me. As for those on the other side of the monitor -- hardware providers (such as TV, set top box, Digital Video Recorder, remote control, home networking box, computer), software application providers (such as middleware, commerce software, databases), delivery systems (cable, satellite, DSL), content providers/creators (TV and movie studios, record labels, videogame developers, advertisers, etc.), when I will be referring to all of them at once, I may call them Players. For convenience only.

Several of the major issues which will form the battleground that determines the course of the ITV evolution are: 1) Privacy, 2) Security, 3) Piracy, and 4) Digital Rights Management. We will examine them as a group.


Here's a sampling of headlines that should concern those of us in the ITV industry. I say “concern” because, whether or not the reader is a privacy advocate, privacy issues will haunt ITV until resolved to the reasonable satisfaction of the viewser.

Report: TiVo Watches Viewers
Interactive TV company TiVo has been accused by the Privacy Foundation of surreptitiously tracking its users' viewing habits. TiVo has denied the allegations.

Interactive TV Worries Privacy Group
Warning of Orwellian surveillance over watching and surfing habits, an advocacy group asks Congress and the FTC to protect consumers.

Study: Interactive TV Could Be 'Spy in Your Home'
The Center for Digital Democracy report cites privacy threats to an ITV audience expected to reach 40 million homes in the U.S. and 600 million homes worldwide by 2005.

Privacy is an issue that threatens to derail the inbound train called Interactive Television. Self regulation must evolve rapidly or additional governmental regulation will certainly follow.

At present, the Cable Communications Policy Act of 1984 is the privacy law most directly applicable to ITV. It imposes restrictions on cable systems' collection and use of subscriber information and imposes annual notice and other requirements. However, the law only applies to cable television subscribers, rendering its authority over ITV broadcast through other means such as satellite or DSL inconclusive. It has been recommended that Congress extend the protections contained in the Cable Act to cover all methods of transmission. Additionally, a recent survey of major technology companies by the Center for Digital Democracy indicates, unsurprisingly, that all of the privacy concerns confronting the World Wide Web will be present in ITV. It would be prudent to assume that the governmental activity (including legislation and enforcement) we have witnessed in the online world will be made to apply to ITV.

What are the concerns with privacy issues in ITV? To quote from a speech given by FTC Chairman Timothy J. Muris at the Privacy 2001 Conference, Cleveland, Ohio, October 4, 2001, discussing the nature of the threats posed by a loss of privacy in the information age:

“First, and most serious, are risks to physical security. Parents do not want information on the whereabouts of their children to be freely available. Women may not want their address known for fear of stalkers. Many prefer to list their telephone number using just their first initial and last name. Someone browsing through the phone book will then not know if the person listed at that address is male or female. Millions of people pay not to be listed in the phone book at all. Others may use a private mailbox to avoid revealing where they live.

Second, is the risk of economic injury. The fear of identity theft plagues the information age. No other practice so vividly captures the fears many consumers have about their privacy. It strikes randomly, leaving lives in shambles. Identity theft can range from unauthorized use of your credit card to someone creating a "duplicate you." I do not mean Austin Powers and "Mini-me," but an actual "duplicate you" - complete with your birthday and social security number and leaving you with a pile of unpaid bills. ID theft tarnishes your credit record, and results in the loss of credit, employment, and housing opportunities. Some victims even find themselves facing criminal charges.

Consumers' third concern is with practices that are unwanted intrusions in our daily lives. Unwanted phone calls disrupt our dinner, and our computers are littered with spam. There are unwanted solicitations for pornography and other products many find objectionable. Individually, the injury is relatively small, but in the aggregate the harm can be great.”

These dangers arise through the collection and sharing of data by the various participants in the chain of delivery of interactive data to the viewser -- the content creator, the distributors, the software application creator, and/or the hardware providers. The FTC has taken a significant interest in protecting the public from violations of privacy in the digital space, especially when such violations may result in the types of damages referred to by Chairman Muris.

The FTC pays particular attention to the rights of children. To quote Chairman Muris again, from the same speech, “None of the worries we have about privacy is greater than concern for the privacy of our children.” In 1998, Congress enacted the Children's Online Privacy Protection Act (COPPA) to prevent the collection of personally identifiable information from children under the age of 13 without their parents' consent. (See http://www.ftc.gov/bcp/conline/pubs/buspubs/coppa.htm for an overview of the Act). In a nutshell, if a Player creates or distributes children's programming, or general interest programming and has actual knowledge that it is collecting personal information from children, it must comply with the notice and consent provisions of the Act.

Additionally, Players must make sure that they conform their ITV, online, and offline privacy policies. Inconsistent policies will make it impossible for the company to comply with their own rules and regulations, and, as of this writing, there is nothing that will attract the attention of the Federal Trade Commission enforcement divisions as fast as failing to do what you have said you would.

Previous privacy legislation schemes have included the following basic concepts:

  • Notice - Inform the viewser of practices governing collection and use of data before disclosure of customer's location takes place.
  • Consent - Obtain the viewser's express authorization prior to data collection or use. Consent may be oral, electronic or in another form, as long as it manifests the viewser's desire to participate.
  • Security/integrity of the data - Protect data from unauthorized access by, and disclosure to 3rd parties and ensure that authorized 3rd parties adhere to policies communicated to the customer.
  • Technology neutral tech solutions - Employ standards that are the same for each terminal or network, offering users some expectation of privacy, regardless of the device.

Of course, in addressing privacy concerns, we have given minimal attention to a very important equation for the survival of ITV; that the more information a Player receives, the more value it is generating, and the more viable the entire ITV industry becomes, leading to more innovation, both technologically and creatively. Customer data is of great value to each type of Player. Advertising enables “free” content. Promotions sell more hardware. Feedback tells the software developer and the content creator what is working and what isn't. Without any information, ITV will be hard pressed to become a viable industry. Clearly, a balance will have to be struck between the viewser's right to privacy and the industry's right to exploit customer data.


If we can oversimplify privacy as the manner in which a Player uses the personal data a viewser gives it (whether intentionally or unintentionally), then security is about protecting that data from falling into the hands of an unrelated third party. How is one's data protected? What types of data are we talking about? What a viewser sends in is covered under privacy when it is simply received by the intended receiver. However, when it is intercepted by a third party, or when the receiver is hacked by a third party, or when the viewser is hacked for data that resides on her home server, that is a security issue. Home networks are happening now. That means that all of viewser's digital files, including, computer data, video collections, audio files, and photos are or soon will be on the same system and may be vulnerable to snooping. What methods of security will the industry players put into place, and what liability will accrue to the content provider, bandwidth provider, software applications creators, or hardware company(s) if the security systems have failed?



It's no surprise that the specter currently haunting the entertainment industry in the Internet/computer space is already a massive issue in ITV. The ongoing ReplayTV case highlights two of the major fears driving entertainment companies early in the new millennium. The newest version of SonicBlue's ReplayTV skips ads more efficiently than any device previously created -- even better than heading to the bathroom or getting a beer out of the fridge! And if that isn't enough, it allows the owner to send a digital file of the recorded program to any other similarly equipped, operational ReplayTV. Fearing the end of the advertising-driven entertainment business model as we know it, and the Napsterization of audiovisual content, the studios have filed suit against SonicBlue, seeking to prevent the release of the offending hardware. SonicBlue is defending itself, and its fans have filed suit against the studios in order to join the battle. The outcome of this lawsuit, pending as of this writing, may not determine the fate of these technologies, but it will determine whether or not people using them will be breaking the law. A loss for SonicBlue will, at the very least, damage the company and stifle these types of innovations for a while. And in a full circle back to the privacy discussion above, a federal court overturned a ruling in the case which would have required SonicBlue to track the viewing habits of its customers. A lower court had ordered this action in order to assist the studios in gathering data relating to the question of whether or not ReplayTV users were violating copyright statutes.

With regard to handicapping the ReplayTV case, copying a copyrighted file and sending it to a third party (rather than transferring it to another device in your house) looks a lot like copying and distributing without permission; both copyright violations. Allowing the viewser to skip the entire commercial, rather than simply most of it, or rather than watching it in fast forward mode, is less like traditional copyright infringement. If one is allowed to leave his couch, or skip parts of the movie, why not the ads? An interesting theory is that it is copyright infringement to deprive a copyright owner of the revenue stream its work was to receive. It will be an interesting and closely watched ruling.

Other matters of intellectual property theft worth watching include the lawsuit relating to Gator (inserting one's own ads over the ads on a computer screen), and the just completed litigation relating to a content creator's right to insert its own ads into the background of a piece of filmed entertainment. For example, can one film Times Square and superimpose a Pepsi ad over the flashing Coca Cola sign? After a very recent decision in favor of Sony Pictures, one can.

Piracy is inevitable in any system where the data is digital, massive storage is required, or the data must be moved to and from the viewser through the network. Such systems include peer to peer file sharing, large video on demand servers with huge amounts of data, and broadcast piracy (witness the ongoing battle between DirecTV and its pirates). Will the content creators raise issues about moving data from one terminal in the house to another? How about one terminal in your house to one in your office? To another house for your own viewing? For viewing by you and ten friends?

Is the solution legal or technological? If legal, contemplate these questions: In what country is the piracy taking place? Which country's laws should be applied? Where should an enforcement action take place? If technological, must hardware manufacturers place anti-copying technology in their product? If we can forecast the future by understanding the past, look for the entertainment industry to seek the greatest limitations it can achieve on the viewser's right to move data from one terminal to another. As for the government, the Digital Rights Management debate should provide some clues.

Digital Rights Management

Must the software application providers include Digital Rights Management (DRM) solutions? What is a digital rights management solution, anyhow? DRM is a system for protecting the copyrights of copyright holders. It involves several or all of the following functions: 1) Digital watermarking (affixing an invisible piece of code to the original work which will tell the person who finds it something about the origination of the file); 2) Rules for usage of the file (e.g. -- view once and disable, view for 48 hours and disable, copy only once); 3) Extraction of payment for usage or transfer of the file; or 4) Delivery of an electronic message back to the source notifying the copyright holder of the authorized or unauthorized use of the file, along with identifying information regarding the user. Of course, numbers 3 and 4 cause great anxiety among privacy advocates, and for very good reason. Each of these functions promptly sends a message to the copyright holder “ratting out” the viewser, transmitting private info including where the viewser has been, what he or she has been doing there, credit card numbers, and/or other personal data.

As of this writing, bill number S.2048 (Consumer Broadband and Digital Television Promotion Act or CBDTPA) is making its way through the U.S. Senate. The law would require all makers of new personal computers and digital home entertainment devices sold in the United States to build in software which would restrict the viewser's use of copyrighted material on these devices -- including music files and CD's, video clips, DVD's, e-books, and more. It would also criminalize any attempt to circumvent the software, and the criminal penalties for violation of the CBDTPA are significant -- up to 5 years in prison and $500,000 in fines.


Research indicates that the number of patent suits has doubled between 1991 and 2000. Far more patent applications are being filed, and far more time, effort and money has been spent in defending them. Some people take a very dim view of the explosion in patents, fearing that all of this intellectual property protectionism will stifle innovation. In fact, the website http://www.bountyquest.com offers cash rewards for discovering and alerting the site to prior art relating to particular patent applications. A discovery of prior art is often enough to defeat a patent application.

In general, infringement issues arise every time a new innovation is implemented. Letters come to the manufacturer or anyone else in the distribution chain offering a license or demanding that the entity cease and desist its allegedly infringing practices. Expensive and time-consuming dialogue, negotiations and, perhaps, litigation, take place; uncertainty stifles innovation. This process relates to everything from a format for transmitting data, to the hardware and software required to run the device or deliver the services promised by the carrier. Patent issues are also raised by the use of compression technologies, encryption software, and other software utilities. Also complicating the situation is the territorial issue. Patents may be issued in various countries to the US patentee or to a totally unrelated entity. Enforcement of patents may vary territory by territory, and manufacture or sale in one country may infringe a patent in another.

A classic example of the problems posed by patents is the Gemstar story. It has used its aggressive protection of its Electronic Program Guide patents as a barrier to entry by relentlessly pursuing other developers of similar technologies. Even though, as of this writing, Gemstar has suffered setbacks in court, the suits still cost millions of dollars to defend, and this message has been sent to smaller players.

As for trademarks and copyrights, these are important issues in any intellectual property driven business, and the issues are not particularly different than any other media. It is important for the content provider to conduct an audit of the copyrights and trademarks it is using in the programming, to determine who owns what, and what must be cleared. In ITV, this includes software programs as well as stories, music, video, and the other traditional entertainment properties. The distributor must obtain warranties and representations regarding the ownership status of all of this intellectual property, and must be indemnified from any claims resulting from any improperly used intellectual property.


These issues seem always to travel in packs. In ITV, not only do the Players have to be on the watch regarding the type of content they provider to the viewser, but, also, they have to be aware of the content the viewsers provide to each other. What will be the obligations of the various participants in the ITV industry with regard to the posting of pornography, hate speech, or controversial (and potentially defamatory) information by viewsers through the network? What type of notice must the viewser receive of potentially inappropriate or controversial content? Can they leave the content alone? Must they remove it from the system? Will they be sued for doing one or the other? Undoubtedly, both actions will result in lawsuits at one time or another, at least until the law in the area evolves, and the obligations of all parties are clarified.

Porn always drives innovation in media. It's no different in ITV. Porn has been one of the few consistently profitable areas of content, regardless of the medium of distribution or consumption. But, what will the public reaction be to interactive porn on ITV? What about governmental regulation, either by restrictions on content distribution, or hardware or software solutions, such as filtering or restricting access? What about porn coming from the viewser, through chats, instant messaging, transmitting sound, still images, or video?


Licensing of content will result in many challenges. Here are a few questions. The answers are on the way, but they haven't arrived yet. What happens to the current release/viewing windows when video on demand matures, and when video piracy matures? Already, 6-month windows for home video release are compressing. Already, territory-by-territory release strategies are being ruined by immediate access to inferior quality versions of the theatrical release in nations in which the film has not yet come out. How will the deals be struck with regard to territories, exclusivity, or limitations on screenings? How will the music clearance work with BMI, ASCAP or the foreign performing rights societies? What happens with residuals, especially in properties in which the viewser has control over what scenes he or she experiences? What rights will the networks have to use studio titles to promote Video On Demand offerings? In at least some contracts, such promotion is not authorized. What will be in the Guild agreements? A representative of the WGA recently stated that he didn't know what the deals would look like; the WGA is just trying to convince the content producers to sign on to the WGA guidelines for the creation and use of content made for interactive TV. That way, those paying for the creation of this interactive content would be regulated by WGA rules with regard to issues near and dear to the hearts of writers, such as compensation, credit, and the right to be involved in sequels, prequels, and spin-offs. In other words, at the moment, they are still worried about making sure that their writers will be involved in the medium, and have some of the basic rights they are used to in the traditional media world. As of this writing, a review of the guild or performance rights societies' web sites reveals a paucity of information on, or discussion of, ITV. The future is unwritten.


Any use of your TV as a credit card (for example, T-commerce uses such as buying Courtney Cox's dress on Friends by clicking on it during the show, accessing banking through TV, placing bets on horse races) will implicate various laws, including the Gramm-Leach-Bliley Act, which requires entities enabling credit purchases to disclose interest, fees, penalties and privacy policies. Federal Reserve and FTC regulations can apply to digital delivery systems as well. In 2001, California's Public Utilities Commission issued a ruling allowing for the use of phone bills for non-communications-related services. This was the first such ruling in the United States. Mountains of paperwork will have to be conquered by the industry in order to comply with these laws before these uses can be fully realized.


What will the playing field look like? As opposed to hardware and software, data delivery systems have often been monopolies in the past (AT&T) and the present (Cable TV). What of the future? As of this writing, the story of the attempted merger between the only two real satellite delivery systems of note in the United States has not been fully told. Although DirecTV chose Echostar over News Corporation as its buyer, neither the Department of Justice, nor the Federal Communications Commission appear to be as entranced by the winning suitor. A merger between the two satellite companies would result in only one satellite delivery system for over 90% of the United States. Echostar maintains that, in this ever-smaller world, one must consider the industry in which Echostar and DirecTV operate to be not satellite delivery of television and internet, but broadband. When thought of this way, the cable industry and DSL become players in the same business, and a combination of the two doesn't seem quite so monopolistic. However, the DOJ and the FCC seem to have a low level of tolerance for duopolies as well, and, as some of the rural congressmen have pointed out, there are many places in this country that cable and DSL still don't reach. If DSL and/or the utility companies can find a way to cost effectively deliver the same data into the home, and back out again, Echostar's arguments may be better received. At the moment, however, they have difficult task in front of them in attempting to push through the merger.


Under rules just promulgated by the FCC in August, 2002, television makers will be required to supply sets that can receive over-the-air digital signals starting in 2004. With the motive of jump-starting the slow transition to digital television, the order requires digital tuners to start appearing in televisions with 35-inch screens or larger in 2004 and in all sets with screens larger than 13 inches by mid-2007. This order has led to a great outcry among many in the television hardware industry. Figures vary, depending on whose agenda is in play, as to whether such a requirement will add $250 to the price tag of each new set (according to the Consumer Electronics Association), or $15 per set, according to television broadcasters. There is also a huge discrepancy over the figures reflecting the actual number of television viewers that receive their feeds through over-the-air signals. Clearly, we haven't seen the last of this issue. It is also likely that we have not seen the last of the issue of stations' compliance with already existing FCC orders to power up their digital transmitters, in spite of the fact that very little digital content is available today.


Games and gaming are going to be a huge part of interactive television. Massively multiplayer games are already a significant business, and one of the only types of online entertainment people actually pay steady money experience. Gambling of all kinds is, of course, one of the biggest industries in the world. This grouping can be broken down into three categories: 1) Games of skill for money or prizes, 2) Games of chance for money or prizes, and 3) Sweepstakes or lotteries for money or prizes. Any other categories of game play, in which nothing of tangible value changes hands, is not the subject of this discussion. While such a game could contain objectionable content, or be used as a pretext for harvesting personal information, these problems fall under other sections, most of which have already been addressed.

In the games of skill, the legal challenges will mostly focus on: Ensuring that everyone understands the rules, and that no unfair advantage is given to any players, attempting to account for differences in technical capabilities of the participants' systems, where computer performance or transmission rates could affect the outcome, monitoring for cheating (hacking, or other methods of gaining an advantage). There are already examples of multiplayer online game communities dealing with widespread hacking by removing from the game all those caught hacking. These steps will be necessary to avoid lawsuits and to ensure that viewsers will want to participate. No one likes to play a fixed game.

As for interactive gambling, the regulations in the U.S. covering online gambling will undoubtedly be made to apply. The U.S. government has been fairly clear and consistent in its opposition to internet gambling. The state of the law in this area is still developing, with many questions about the applicability of the Wire Wager Act, which applies to transactions made over a wire. Does it apply to satellite communications? How about when satellite transmits to the home, but the telephone line transmits back out? Questions of jurisdiction abound. For example, if the gambling concern is based in the Grand Cayman Islands, but the viewser is in his home in Kentucky, and the network he is watching is based in Los Angeles, with servers in Ohio, which state has authority over the transaction, and can anyone actually pursue the gambling concern? Expect more legislation intended to broaden the coverage of the Wire Wager Act. Already, Federal prosecutors and courts have moved aggressively to provide enforcement remedies in as many gambling situations as possible.

Wagering will be a popular area. Aside from casino gambling, off-track betting has already appeared on television. Gemstar owns a horse racing channel, TVG. By the end of 2002, it is possible that Echostar's DISH Network subscribers will be able not only to watch races on TV, but to wager on them as well.

Sweepstakes/lottery law is reasonably evolved, and a great deal has been written about the regulations as they apply to online sweepstakes. A lottery is defined as a promotion in which consideration (giving up something in exchange for something else), random chance, and a prize are all present. Other than a lottery specifically sanctioned by the state in which it operates, all lotteries are illegal. Obtaining permission of the states is unlikely, as many states do not allow even state-run lotteries. Therefore, in order to run the promotion, one of the three elements (chance, consideration, prize) must be removed.

One might look at the previous paragraph and ask, “how are lotteries different than all the other contests and promotions out there?” The answer is, they are not. “Lottery” is a term of art, and, to qualify as a lottery, a promotion must simply contain the three elements mentioned in the previous paragraph -- consideration, random chance, and a prize. Clearly, what most people consider sweepstakes (Publisher's Clearinghouse) and promotions (check under the cap of your Sprite bottle for the winning entry) fall under the definition of “lottery.” The challenge for those who want to run promotions is to get rid of the consideration element, since ruling out the prize will tend to dampen the enthusiasm of the participant, and getting rid of random chance makes it a game of skill. Avoiding consideration is a more complicated process than one might imagine, as even access fees to one's ISP and agreeing to give up personal information or to receive future emails have been characterized as consideration for participating in the promotion, rendering the promotion a violation of numerous laws. In the case of Sprite, they must provide an “alternate method of entry” to the promotion (send a letter to an address to obtain bottle caps) or run afoul of the lottery laws, because having to buy the bottle constitutes consideration. Many types of promotions are risky in the best of times (for example, Publisher's Clearinghouse type sweepstakes), and there is a growing trend of class action suits against some of the larger promotions companies.


What will be the mechanics of ITV? How much control will the viewser have over the content he or she is able to experience? The more choice the viewser has to go outside of his or her own region, the more we wade into the murky waters of international law and the choice of which law to apply. As the method of distribution of content goes from local TV antennas to cable, to satellite, to the global data network known as the internet, the ability of a viewser to receive programming created in Los Angeles in his or her home in Christchurch, New Zealand, or Reykjavik, Iceland increases, whether the creators intend this consequence or not. This situation gives rise to numerous questions. Can a viewser in Seoul, South Korea be pulled into court in Los Angeles, California for his activities with regard to the interactive programming he is experiencing, which was originally created in Los Angeles and intended for United States audiences? Can the Los Angeles-based creator be pulled into court in Budapest, Hungary for violating Hungarian law with regard to obscenity? If a viewser in New Dehli, India copies programming created in New York onto a hard disk and emails it to friends in Johannesburg, South Africa, whose copyright law should be applied to the court case -- India, South Africa, or United States?

Each of the categories we have previously explored is challenging ITV Players in other countries, and many of these countries or regions have their own laws and precedent dealing with the same issues. For example, privacy and data collection issues are very important in the EU, where they view U.S. efforts to protect the viewser as woefully inadequate. A Player must pay attention to international privacy regulations like the EU Data Protection Directive, the UK Data Protection Directive, and Canada's Personal Information and Privacy of Electronic Documents Act (PIPEDA).


Existing legislation and precedent from litigation relating to the internet and television will guide development of the laws of ITV. In areas where no other precedent or legislative guidance is available, it is safest to apply what we know from these two media. The days of the CPO (Chief Privacy Officer) are with us to stay. More battles will take place in areas we haven't covered, such as misleading product placements in the click-on-the-movie-star's-shoes-and-buy-them-world, and skirmishes over the involvement of government in the inevitable standards wars. The final advice to the Player is to be pay close attention to the legal, business and technological progress in the field, here and abroad, be nimble in making adjustments, learn from your competitor, and hire a futurist!


The Legal Quagmire Checklist.

Areas to look at, questions to ask, from the point of view of a Player:

1 PRIVACY What kind of information is being gathered?
Who is it being gathered from?
Do you have a privacy policy?
What does it say?
Are your privacy policies consistent across all media?
2 SECURITY What information are you storing?
How secure is your storage?
How secure is the data transfer?
Does your hardware or software create additional risk for your customers?
3 PIRACY/DRM What's the status of that darned ReplayTV case?
What is your business model?
What result if piracy happens?
What sort of DRM solution will be helpful, and not violate the appropriate privacy laws?
4 PATENTS, TRADEMARKS, COPYRIGHTS What technologies are implicated?
What copyrights and trademarks are in use?
Who owns what?
Who is receiving warranties, representations and indemnities protecting themselves from lawsuits?
5 FREE SPEECH, FILTERING, CENSORSHIP, PORN What type of content is reaching the viewser?
Who is providing the content?
What sorts of notice does the viewser have of potentially inappropriate content?
What does the legislation require them to do?
6 LICENSING What type of content is being delivered?
Are they Guild issues? Reuse fees?
Are there release windows to be dealt with?
Are there promotional limitations?
7 CONSUMER CREDIT ISSUES Are you extending credit to the viewser?
Are you providing financial information?
8 ANTITRUST Are you up to date on the carriers and their coverage areas?
9 UNIVERSAL ACCESS Do you know the regulations with regard to digital television and digital transmission?
10 GAMES AND GAMING Are you offering games?
Are they games of skill or chance?
Is there a prize of any sort?
Is there consideration by the player of any sort?
Are you running a sweepstakes/lottery?
11 JURISDICTIONAL ISSUES Where is everyone in the chain from content creator to viewser?
What are the relevant laws and policies of foreign jurisdictions regarding all of the subjects of this chapter?

Copyright 1999

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