Fox, Dish Face Off Over Ad-Free Primetime TV Service

News Corp.’s Fox Broadcasting unit asked a federal judge to block Dish Network Corp.’s ad-free primetime television service, which the networks say threatens their business.

U.S. District Judge Dolly Gee in Los Angeles heard arguments today on Fox’s bid to halt Dish’s PrimeTime Anytime and AutoHop features while it proceeds with its copyright-infringement lawsuit filed in May. The judge took the request under submission without indicating when she would issue a decision.

Fox Broadcasting Co., Comcast Corp.’s NBCUniversal and CBS Corp. separately sued Dish, the No. 2 U.S. satellite-television provider, claiming the service will destroy the “advertising supported ecosystem” that provides free, over-the-air primetime television. Dish sued the networks in New York, seeking a court ruling that it isn’t infringing copyrights.

Richard Stone, a lawyer for Fox, said at the hearing that other distributors, including DirecTV, the largest U.S. satellite-television provider, will be forced to follow suit if Dish’s ad-free primetime television service isn’t blocked.

“It will grow like a brushfire if it isn’t stopped,” Stone said.

The Dish service will devalue commercial time during Fox’s programs in the eyes of advertisers, the lawyer said. The service also directly competes with Fox’s own distribution of ad-free programs through Apple Inc.’s iTunes and through Inc., Stone said.

Plain ‘Theft’

“This is theft of programming, plain and simple,” Stone told the judge.

Annette Hurst, a lawyer for Dish, said Fox was trying to undo the 1984 Supreme Court ruling in the Sony Betamax case that allowed consumers to copy programs for later viewing. There was no way to distinguish between Dish’s AutoHop and fast forwarding through commercials for legal purposes, Hurst said.

“This is not A Clockwork Orange” where viewers can be forced with their eyes pried open to watch commercials, Hurst said, referring to the 1971 Stanley Kubrick film.

Dish, based in Englewood, Colorado, introduced its Hopper digital video recorder in March. It can record all the major networks’ primetime shows and store them for eight days after their initial broadcast. AutoHop, introduced in May, allows viewers, with the touch of a button, to skip all the commercials on recorded shows automatically, without having to fast-forward through them.

Undermining Advertising

Fox said in in its Aug. 22 request for an injunction that “PrimeTime Anytime and AutoHop cut the legs out from under the advertiser-supported broadcast television business model.”

Dish said in its complaint that the AutoHop feature lets subscribers watch primetime shows commercial-free the day after they are recorded, not on the night when they’re first shown on television.

Dish’s new service might affect the television networks’ ability to borrow money, with AutoHop having “broad negative credit implications across the television industry,” Neil Begley, an analyst for Moody’s Investors Service, said in a May 25 report cited by Fox in its filing.

The case is Fox Broadcasting v. Dish Network, 12-4529, U.S. District Court, Central District of California (Los Angeles).

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