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Broadcasters sue Dish over ad-skipping DVR service

Thursday - 5/24/2012, 9:51pm  ET

By RYAN NAKASHIMA
AP Business Writer

LOS ANGELES (AP) - Broadcasters Fox, NBC and CBS sued Dish Network Corp. on Thursday over a service that offers commercial-free TV.

Dish, the nation's second-largest satellite TV provider, filed a suit of its own seeking a judicial all-clear for its "AutoHop" ad-skipping technology. Dish said the unique service it launched this month doesn't violate copyrights and that it is seeing a "groundswell of support from consumers."

The fight is over a subtle but key question: Whether TV distributors can cut out commercials on consumers' behalf, or if consumers hold that power alone with their fingers on the remote.

Since May 10, Dish has been advertising a digital video recorder service called "Primetime Anytime" that gives consumers access to the last eight days of prime-time programming from the four major broadcast networks _ ABC, NBC, CBS and Fox _ with the commercials stripped out. The service, available to Dish's top-tier subscribers, uses technology called "AutoHop" to deliver the programming ad-free.

In a suit filed Thursday in a Los Angeles federal court, News Corp.'s Fox says Dish's service is unauthorized and violates a licensing agreement between the two companies.

It says the service is a form of unlicensed video-on-demand because the recordings are kept on a portion of the DVR's hard drive that is controlled by Dish. Fox only licenses its regular programs to Dish for playback on VOD on the condition that fast-forwarding of commercials is disabled.

If the service isn't stopped, it "will ultimately destroy the advertising-supported ecosystem" that underpins TV shows, Fox said.

Dish maintains that the service is "user-enabled" and that it is fundamentally no different from how consumers use DVRs today. It filed its suit in a New York federal court.

"Viewers have been skipping commercials since the advent of the remote control," said Dish's senior vice president of programming, David Shull, in a statement. "We are giving them a feature they want and that gives them more control."

Comcast Corp.'s NBCUniversal and CBS Corp. also filed suits against Dish on similar grounds on Thursday.

"Dish simply does not have the authority to tamper with the ads from broadcast replays on a wholesale basis for its own economic and commercial advantage," NBCUniversal said in a statement.

CBS said in a statement: "This service takes existing network content and modifies it in a manner that is unauthorized and illegal. We believe this is a clear violation of copyright law and we intend to stop it."

A spokeswoman for The Walt Disney Co.'s ABC declined to comment.

About 40 percent of the 115 million television households in the U.S. have a DVR. Watching programs recorded on a DVR accounted for about 8.4 percent of all TV viewing among adults aged 18 to 34 last year, up from about 7.9 percent in 2010, according to TV ratings and research provider The Nielsen Co.


(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)