WASHINGTON (Reuters) - The U.S. Supreme Court on Monday asked for the federal government's views of an appeal by film studios and television networks of a ruling that would allow a new digital video recorder service by New York cable operator Cablevision Systems Corp.
At issue in the case is a ruling by the U.S. Court of Appeals in New York that Cablevision's proposed service would not directly infringe the copyrights of the media companies that produce movies and television programs.
Cablevision in 2006 announced plans to offer a network-based DVR system, called Remote Storage Digital Video Recorder -- or RS-DVR -- which would allow subscribers to store TV programs on the cable operator's computer servers and then play them back at will.
A number of film studios and major television networks, including Time Warner Inc, News Corp, CBS Corp and Walt Disney Co, sued in seeking to block the new service for violating copyright laws. They won before a federal judge, but lost before the appeals court.
"We interpret the Supreme Court's step to ask the Justice Department for their thoughts on this case as a slight negative for Cablevision and to a lesser degree, other cable operators," said Thomas Eagan, an analyst at Collins Stewart.
Other cable companies including Comcast Corp and Time Warner Cable Inc have said they would launch similar systems over time if Cablevision's is upheld as legal.
Industry analysts estimate cable companies could save tens of millions of dollars spent on DVR boxes and installation expenses if the remote technology is approved.
Eagan said Cablevision could save up to $100 per set-top box but also $50 per customer on the cost of sending out a service representative for home service, and help reduce the rate of customer losses by 30 percent.
Cablevision serves over 3 million customers in the New York metropolitan area. Its annual outlay on DVR boxes is one of its largest expenses.
The Supreme Court asked the Justice Department's solicitor general to file a brief expressing the views of the federal government. It could take several months for that brief to be filed.
After it is filed, the Supreme Court then will decide whether to hear or reject the appeal.
Chief Justice John Roberts and Justice Samuel Alito did not take part in considering the case. Such recusals often happen when a justice owns stock in one of the companies involved in a case.