Why Are Major Cable Networks Suing Dish Again?

News Corp.’s (NASDAQ:NWSA) Fox Broadcasting Company is seeking to stop Dish Network’s (NASDAQ:DISH) AutoHop DVR service, which allows viewers to skip the commercials on pre-recorded TV shows.

Fox has taken Dish Network to court on the matter, asking a federal appeals court to overrule a district judge in order to put a stop to AutoHop, which Fox says threatens television’s entire advertising system. Dish’s AutoHop service allows viewers to record prime-time programming from all four major networks, then watch the shows the next day commercial-free.

Commercials are the main source of financing for primetime programming, and according to Fox, if you threaten commercials, you threaten the very television ecosystem itself. The AutoHop service reduces the value of commercials, which completely undermines the ad-supported television model. The National Association of Broadcasters, Walt Disney Co.-owned (NYSE:DISABC, Comcast Corp.-owned (NASDAQ:CMCSANBC, CBS Corp. (NYSE:CBS), and all of Fox’s affiliates filed motions in support of Fox.

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“This appeal does not challenge VCRs, DVR, or viewers’ ability to select and record programs for later viewing,” Fox said in a Dec. 13 filing. “What it does challenge is Dish’s wholesale copying of Fox’s copyrighted primetime programming in order to offer its subscribers an on-demand library of commercial-free programs.”

Dish has fired back, saying in its January 17 reply to Fox’s appeal, “Here we go again. This appeal is about the latest advance, Dish’s award-winning Hopper, and the networks, led, in this appeal, by Fox, are howling right on cue. The Hopper is a souped-up DVR. The Hopper still performs the same functions VCRs did in 1984, just more easily.”

Back in 2012, Fox, NBC, and CBS separately sued Dish Network over its Hopper DVR, which was introduced in March of last year. Shortly after the Hopper DVR, Dish introduced the AutoHop service, which allows viewers to skip the commercials on pre-recorded programming with the touch of a button. U.S. District Judge Dolly Gee denied Fox’s request for a primary injunction that would’ve stopped Dish’s services until the legal claims were solved. Gee agreed that the Dish services may infringe Fox copyrights, but didn’t find that the network was being caused irreparable harm enough to warrant an injunction.

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Fox is now requesting federal court to overrule Gee and put a stop to AutoHop.

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