Several years ago, Chet Kanojia was enjoying a brisk career providing data collection and ad exchange services to broadcasters and cable companies. He'd sold his business to Microsoft, and was working on integrating his operation into the huge firm.

Then something occurred to him. Why should consumers have to rely on unreliable home antenna systems or expensive cable services for access to local broadcast television, when they could get it over the Internet?

"I have sort of a real passion for the video sector in general and in particular solving some key consumer access problems," Kanojia explained to us in an interview. "The light bulb went on in my head that if you could solve the consumer's access to broadcast television in a smart way that they did not have to get it exclusively from the cable or satellite company, you really had a great starting point for any over the top service, because then a consumer could combine that with Netflix and Hulu."

And once someone had both over-the-air network channels plus access to Hulu and Netflix--well, why bother with cable TV?

The teeny-tiny solution

If you've followed the history of this particular incandescent idea, you know that it has been tried before, and that it is fraught with legal risk. But before we get into that, it should be noted that Kanojia's Long Island, New York based startup, Bamboom, offers a novel approach to the problem.

Basically, the Bamboom model is to take the tuner, DVR, and all related paraphernalia out of your house and transfer it over to a central HQ in your area—at present New York City is the testing ground. There you are assigned your own "teeny-tiny HD antenna," in the company's words.

Kanojia described one of these antennas to us. "Basically what we did is we miniaturized television antennas down to almost the size of a dime," he explained. "Except the consumer doesn't put them in their house. We put them in giant arrays in a central location in the market, like in New York, for example, and each individual consumer gets their own antenna."

The result is that you can receive, record, and keep your content up in Bamboom's mini-HD antenna cloud and watch it when you want. Your connection and cloud data locker is "exclusively yours; no one else can use it," the company notes. Plus, Bamboom has partnered with Netflix to offer the Netflix library to subscribers, has integrated Facebook and Twitter into the service, and is cranking out apps to make it available on smartphones and tablets.

Now all the startup has to do is make sure this is actually legal.

Internet = cable?

As Ars readers know, Bamboom isn't the first IP venture to try to offer live broadcast TV over the Internet. Bamboom knows this too. The company's legal statement acknowledges the history of two predecessor companies, FilmOn and ivi, both of which took live TV signals and offered the content over an Internet connection.

Broadcasters sued these services on the grounds that they're not "cable" systems as defined by Section 111 of the Copyright Act. This makes them ineligible to apply for "compulsory licenses" to make "secondary transmissions" of copyrighted content streamed via over-the-air television.

FilmOn was hit with a temporary restraining order late last year. ivi insisted that its case was different. The former company "doesn't fit the copyright definition of a cable system," an ivi representative told Ars, "distributes content outside the US in an unprotected format, and offers its service free of charge, which is a clear violation of all applicable copyright law."

But in late February the judicial hammer came down on ivi even harder. "We cannot conclude that Congress intended to sanction the use of a compulsory license by a company so vastly different from those to which the license originally applied," the United States Southern District Court of New York ruled on February 22.

ivi's architecture bears no resemblance to the cable systems of the 1970s. Its service retransmits broadcast signals nationwide, rather than to specific local areas. Finally, unlike cable systems of the 1970s, ivi refuses to comply with the rules and regulations of the FCC.

As for the US Copyright Office, the Southern District's interpretation of its recent statements on the Internet versus cable question was unambiguous. The record demonstrates "how thoroughly the Copyright Office has engaged with these issues," the court declared.

First, a service providing Internet retransmissions cannot qualify as a cable system. Second, the compulsory license for cable systems is intended for localized retransmission services, and cannot be utilized by a service which retransmits broadcast signals nationwide. Third, the rules and regulations of the FCC, even if found not to be binding on a service such as ivi, are integral to the statutory licensing scheme established in 1976.

So just what is Bamboom thinking?

A private performance

ivi says it will appeal the ruling. But faced with this kind of legal precedent, Bamboom's attorneys understandably seek justification in another court case: Cablevision vs. Cartoon Network. About five years ago, the Cablevision cable company came up with the kernel of the Bamboom idea. Let consumers do their time-shifting not with a DVR sitting in their living rooms, but through Cablevision's remote storage facilities (essentially, a mass DVR sitting in the local cable company office).

The studios and networks quickly sued, arguing that Cablevision's system directly infringed on their exclusive right to reproduce and publicly "perform" copies of their copyrighted content. They found a friend in that same Southern District Court of New York, which agreed with their logic.

But Cablevision appealed the case to the Second Circuit Court of Appeals, whose judges saw the matter differently. They found convincing Cablevision's contention that this was just like a home DVR... with a really long-range remote control. (In the Cablevision system, customers still had to choose material for recording and had their own unique storage space.)

The Second Circuit rejected the notion that this uniquely stored data represented a "public performance" for which Cablevision needed another license.

"Because each RS-DVR [remote storage DVR] playback transmission is made to a single subscriber using a single unique copy produced by that subscriber," the court observed, "we conclude that such transmissions are not performances 'to the public,' and therefore do not infringe any exclusive right of public performance."

You control the transmission

It is in the Cablevision decision that Bamboom seeks safe legal harbor. "Here, too [meaning Bamboom], the consumer controls all communications and recording and so makes a private performance," Bamboom notes, which is why it's so important to Bamboom that every user have an actual antenna of their own that they control.

Unlike public performances that would require some form of copyright license, the private performances initiated by consumers using the Bamboom technology do not infringe copyright and need no licenses. This enables consumers to access their local broadcast programming on their IP-enabled devices, in real time, without expensive subscription fees.

Bamboom's system conforms to the Cablevision ruling's "private" standard to the last detail, the company insists.

The consumer controls and causes the transmission.

The consumer chooses what to watch and when and where to watch it.

The consumer 'turns on' his or her individual antenna and receives his or her own individual signal.

The signals are intended for personal display on consumer laptops, tablets, phones, and IP-based devices.

It's elegant logic, but movie studios recently went after a company that tried to stream movies in similar unlicensed fashion by giving every user direct control of a unique DVD player. Bamboom may well find itself on the receiving end of a similar lawsuit.

Kanojia told us that Bamboom is in "technical beta" for New Yorkers right now. "We'll keep adding capacity and keep inviting people to join throughout the summer."