SonicBlue Forced To Spy
Arik Hesseldahl, 05.03.02, 4:04 PM ET

The rights of couch potatoes everywhere are under attack.

A federal judge has ordered SonicBlue, the company behind the ReplayTV personal video recorder, to effectively invade the privacy of its customers by gathering data on how they use the device and turning that data over to the broadcasting companies that have sued it.

It's the latest shot in a battle between SonicBlue (nasdaq: SBLU - news - people ) and broadcasters like the Walt Disney Co. (nyse: DIS - news - people ), Viacom (nyse: VIA.B - news - people ) and General Electric's (nyse: GE - news - people ) NBC. They have sued SonicBlue over the ReplayTV device, which records TV programming like a traditional VCR but uses a computer hard drive instead of tape.

The broadcasters complain that the device allows viewers to easily skip over commercials that would otherwise be recorded using a conventional VCR. Allowing viewers the choice to ignore commercials could possibly threaten the free-programming model that has dominated television for so many decades, and even cut into broadcasters' revenue streams. The more eyeballs a broadcaster can guarantee, the more the broadcaster can charge for an ad.

But apparently broadcasters aren't hip to the idea that most viewers see TV commercials as an annoyance and, more often than not, mentally tune them out anyway. The "mute" button of every TV remote control in the world is another good tool for keeping noisy and insulting commercials at bay.

SonicBlue is making a great deal of noise about the judge's order, which essentially orders the company to develop a way to keep track of what its customers do. Chief Executive Ken Potashner says the company would be required to turn over data on what programs ReplayTV owners watch, how many commercials they skip and so on, data that would traceable back to individual devices. The order, which Potashner says SonicBlue will fight, stems from what is an otherwise routine matter of "discovery," the process by which two sides in a lawsuit exchange evidence before going to trial.

But outside the case, which comes to trial sometime next year, there's a disturbing trend of ideas flowing among broadcast executives regarding TV viewers and commercials. In a recent interview with the trade journal Cableworld, Jamie Kellner, CEO of Turner Broadcasting, a unit of AOL Time Warner (nyse: AOL - news - people ), not only suggested that ad-skipping is "theft" but also argued that TV viewers are under some kind of contract to watch advertisements.

"Your contract when you get the show is you're going to watch the spots [advertisements].... Any time you skip a're actually stealing the programming," Kellner is quoted as saying. He goes on to note that "there's a certain amount of tolerance" for going to the bathroom.

Apparently Kellner has never used a VCR, or has some inflated idea about the respect that the average TV viewer has for the sanctity of the TV commercial. Fast-forwarding through commercials of VCR-recorded programming is common. In fact, the technology to skip commercials on recordings from TV has been available for years.

But two things really scare broadcasters about ReplayTV. First, the device uses a hard drive. Second, it's connected to the Internet by high-speed connections. Broadcasters are certainly afraid that the existence of devices like ReplayTV and TiVo could lead to a Napster-style file-sharing underground.

The truth is, that underground already exists, and there is very little anyone can do about it. Internet security firm Internet Security Solutions (nasdaq: ISSX - news - people ) has just completed an investigation into the existence of several large file-sharing networks used to trade pirated software and movies. Network pirates have hijacked servers on corporate and university networks as storage spaces for illicitly trading files.

Dan Ingvaldson, a researcher at ISS, says movies, many of them not yet released to theaters, have made the rounds through these underground networks, making it conceivable that someone has already seen Star Wars: Attack of the Clones without having to pay for it.

"We've seen hundreds of gigabytes and in some cases several terabytes of data being circulated over these networks," Ingvaldson says. "The hot thing right now is movies." A DVD movie takes up only about two gigabytes of hard drive space, he says.

Maybe the broadcasters suing SonicBlue need to change the channel.

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