Cablevision Holds Up Test of Networked DVR

Cablevision Systems Corp. (CVC), a New York-area cable TV provider, on Thursday said it would suspend a test of a new video recording service pending the result of a copyright infringement lawsuit filed by several entertainment companies.

Cablevision, the nation's sixth-largest cable provider, had planned to begin testing a new service this month that would allow viewers to record and play back TV shows much in the same way people use digital video recorders, or DVRs.

But instead of having to install a TiVo (TIVO)-like set-top box in each home, Cablevision's new service would have allowed anyone with digital cable to record and play back shows, with the programs being stored at the cable system's hubs instead.

Advertisers don't like DVRs because they allow viewers to skip through commercials.

DVR use has been expanding but the growth has been held in check somewhat by the cost of installing the set-top boxes, which can cost several hundred dollars each.

A networked DVR system could quickly increase the number of people that can use the service at relatively low cost.

Last month a group of Hollywood studios and TV networks sued Cablevision over its plans for the network DVR, saying it violated their copyrights.

On Wednesday Cablevision defended its plan in federal court in New York, saying that the service fell under the "fair use" of copyrighted material allowed by law because it gives customers the ability to record and play back programming for their own viewing later.

In their lawsuit, several companies including News Corp.'s (NWS) Twentieth Century Fox, Viacom Inc.'s (VIA) Paramount Pictures and Walt Disney Co.'s (DIS) ABC demanded that the service be halted and said Cablevision refused to pay a license fee or share in the revenue the service would collect.

Other cable operators including industry leader Comcast Corp. (CMSCA) have said they were also interested in offering remote-storage digital video recorders, but they have held off so far, awaiting the fate of Cablevision's move.

Cablevision, based in Bethpage, N.Y., has about 3 million customers around New York City, Connecticut and New Jersey.