U.S. stations battle Canadian Net TV firm

iCraveTV, which launched early last week, streams the signals of 17 Canadian and U.S. TV stations online--uncut and uninterrupted. But the Web company didn't ask permission first, and now programmers on both sides of the border are trying to shut the young Net company down.

"This is very big," said Gregory Schmidt, general counsel for LIN Broadcasting, which owns Buffalo, N.Y., CBS affiliate WIVB-TV. "This is a serious misappropriation. If this is allowed to go forward, we will lose a lot of business."

If iCraveTV doesn't stop showing its signals by this weekend, the American stations say they will likely join legal forces with Canadian programmers, who already are gearing up to take iCraveTV to court.

"I expect there will be some kind of litigation fairly promptly," said Schmidt. "I think you could see [lawsuits] happen in both places."

The National Football League also has threatened legal action if iCraveTV retransmits its games online this weekend, citing potential copyright penalties of $100,000 per game. Canadian broadcasters already are drawing up legal papers to bring their own lawsuits against the small company.

If the case goes to court, the cross-border legal battle could set the ground rules for what is likely to be a contentious relationship between traditional broadcasters and online media companies, which are increasingly moving toward showing television-like content on their Web sites.

The issue already has come up in the U.S. Congress, which last month nearly barred online firms from retransmitting TV content on the Web--just what iCraveTV is doing. Net companies such as Yahoo and America Online succeeded in stalling that drive, but say the issue is still unclear.

iCraveTV says the situation is different in Canada, however. That country's laws allow outside parties to retransmit television signals without first obtaining the permission of the programmers, as long as the programmers are reimbursed for use of their content.

"We view [the rules] as very clear," iCraveTV chief executive William Craig said in an interview earlier this week. "The law isn't complicated at all." Canadian law doesn't distinguish between technologies, the company says, so it has the same rights as cable or satellite TV companies to use the publicly available TV signals.

Craig has geared his site toward Canadian citizens, hoping to avoid legal conflict in the United States. Users of the site have to plug in a Canadian area code and agree to several pages of legal language saying that they are physically in Canada before reaching the television streams. But once past these hurdles, there is no technological feature barring people in the United States or elsewhere in the world from logging on to watch shows like "Seinfeld" or the "Simpsons."

That's not nearly good enough, the American stations say.

"We think that the screening mechanism keeping U.S. citizens from viewing the content is porous at best," Schmidt said.

But the ineffective screening is just the start of their concerns, the programmers add. Canadian and American stations say iCraveTV is breaking even Canada's less restrictive copyright laws by pushing their signals into streaming video format and by adding its own banner ads beneath the TV shows. This "framing" of their content means that iCraveTV is different from a cable TV station, and therefore is acting illegally, the programmers contend.

U.S. newspapers have fought against other sites linking to their content inside a Web "frame"--a Web technology that allows one site to wrap its own advertisements around another site's content--for some time. A high-profile lawsuit on this issue was settled before coming to trial, however, keeping the practice's legal status unclear.