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George Burger, partner with VMedia Inc., says Bell Media’s letter is ‘strictly an attempt to protect the turf.’

Tim Fraser/The Globe and Mail

An upstart television provider's attempt to break some live TV channels away from the cable box and into the world of online streaming is going to court as Bell Media protests the new service's legality.

VMedia Inc., a Toronto-based startup that offers Internet and IPTV (Internet protocol television) services by buying wholesale access to established players' broadband networks, launched a new app last month providing a cheap subscription to a basic set of live TV channels available online through the Roku streaming box.

But in a letter last week, Bell Media, a division of BCE Inc., argues VMedia has "no legal right" to rebroadcast its CTV networks this way, and is considering a court challenge. In response, VMedia filed a pre-emptive motion with the Ontario Superior Court of Justice on Monday, asking the court to affirm that its service is lawful.

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As a growing number of consumers cut the cord on traditional TV in favour of assembling a diet of programming online through services such as CraveTV and Netflix, the battle over VMedia's Roku alternative could have far-reaching implications for the growth of live TV online. Despite streaming's exploding popularity, live and on-demand TV is still largely tied to cable and satellite subscriptions.

At $17.95 a month, the new package is meant to mirror VMedia's existing "skinny" basic TV package, which includes networks such as CTV, CBC or Omni. The key difference is that a subscriber to the new service can watch live channels online using any Canadian Internet provider, not just VMedia's Internet service.

The array of channels VMedia can offer through its Roku app is limited by contracts with broadcasters that require channels to be offered over a private managed network – effectively, through VMedia's own facilities and wires, or through one of its agents. "You've got to subscribe to us in order to give you Sportsnet," said George Burger, an adviser to VMedia.

But VMedia doesn't believe that restriction applies to over-the-air channels, which TV distributors can retransmit for free under the Copyright Act. "Accordingly, a copyright owner such as Bell has no right to prohibit the simultaneous retransmission of the work," the company argues in its court filing. "This is strictly an attempt to protect the turf," Mr. Burger said of Bell threatening legal action. "As long as [the largest cable companies] do this, it makes it extremely difficult for anybody to compete with them, because they have the wires."

Bell's letter, sent on Sept. 29 by senior vice-president of legal and business affairs Kevin Assaff, argues VMedia's streaming package doesn't meet the Copyright Act's definition of a "retransmitter,"and that VMedia "has no legal right to distribute or retransmit in [its Roku streaming service] Bell Media's broadcast signals, specialty services, or copyrighted programs without authorization."

"It's a clear copyright violation and we asked them to stop," Bell spokesman Mark Langton said in an e-mail. "They refused, so we're asking for a court injunction to end the copyright infringement."

In the United States, a plan by the Federal Communications Commission (FCC) that would force cable companies to make their live TV feeds available as apps on streaming devices has hit a road block. The commission is divided on the proposal and last week delayed a vote on it.

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Eventually, VMedia is interested in offering its app on other streaming boxes, such as Apple TV, but it will be up to the courts to decide whether the service survives at all. "Doing it this way, without a doubt, is a disruptive approach to the industry," Mr. Burger said. "I think it's going to start an inevitable movement toward trying to dislodge the relatively limited-access channels which are in the hands of the vertically-integrated entities, and get them out into the market in the same way."

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