Last week, an appeals court determined that Cablevision wasn't liable for copyright infringement if their customers chose they programs it recorded. Could that ruling present a new loophole for Internet streaming radio?

In a completely unanticipated twist due to unforeseen repercussions, the Copyright Office of the US Library of Congress extended its hearing for public comments on the viability of copyright law for Internet radio into next month. This after it was determined that an appeals court decision last week in favor of cable TV provider Cablevision, ruling that its proposed remote DVR technology was not in violation of copyright, may have an impact on current copyright law regarding Internet streaming radio.

"The Office agrees that the ruling in the Cartoon Network case may be pertinent to the issues raised in this rulemaking," reads a notice issued last Friday (PDF available here), "and that interested parties should be given sufficient time in which to consider and comment upon the implications of that ruling. Therefore, the Office has decided to extend the deadlines for submission of comments."

Specifically, experts have apparently reasoned that the court's conclusion may impact whether Internet broadcasters are actually responsible for copyright at all, given that the court ruled that Cablevision was legally not the "performer" of copyrighted works when the customer requests them and displays them on his or her own schedule.

"In the case of a VCR, it seems clear -- and we know of no case holding otherwise -- that the operator of the VCR, the person who actually presses the button to make the recording, supplies the necessary element of volition, not the person who manufactures, maintains, or, if distinct from the operator, owns the machine," wrote Second Circuit Court of Appeals Judge John M. Walker, Jr., on behalf of a unanimous three-judge panel last Monday. "We do not believe that an RS-DVR customer is sufficiently distinguishable from a VCR user to impose liability as a direct infringer on a different party for copies that are made automatically upon that customer's command."

Depending on your interpretation, this may be very good news for the Internet radio listener, or very bad. The Second Circuit opinion last week could be interpreted as saying that plaintiffs, which include Turner Broadcasting (thus leading to the affair having been dubbed the Cartoon Network case), sued the wrong party. In turn, if copyright holders continue to have a grudge, they should take their case directly to the public. Or, they could argue that perhaps everyone using an RS-DVR owes copyright holders a bill, and that services such as Cablevision should be called upon to collect it on their behalf.

If that interpretation extends to Internet radio -- which is what the Copyright Office is working to determine -- then perhaps services such as Pandora and Last.fm are not liable for copyright infringement, under the theory that the listener is the one who throws the switch. But if that's the case, copyright holders could conceivably pursue individuals in a manner similar to the recording industry's legal pursuit of unauthorized file sharers.

The deadline for comments to be received by the Office of the General Counsel of the Copyright Office is now end-of-business on August 28, with the deadline for replies to comments extended to end-of-business September 15. A hearing on the Copyright Office's proposed rulemaking has now been set for 10:00 am September 19 in Washington.

While this is going on, the executive director of the SoundExchange performance rights organization, John Simson, Mercury News last Thursday, called upon Rep. Zoe Lofgren (D - Calif.) to support a bill extending artists' royalties to traditional terrestrial radio. Rep. Lofgren supports a measure that would apply the Internet radio royalty rate to terrestrial radio. However, if that Internet rate is determined to be zero by virtue of the Cartoon Network ruling, the state of affairs for broadcasters may remain unchanged.

"Today, AM and FM radio stations pay zero royalties to artists when they play their songs over the air," Simson wrote. "That means every time you hear a song...no performer -- from the front man to the session musicians - is compensated. As a point of reference, that same song played over the Internet, satellite radio, television or in any other Western democracy would earn a royalty for the artists and musicians that brought the music to life. In fact, when those same AM and FM radio stations that broadcast music for free stream performances over their Web sites, they pay a royalty for those songs, but continue to refuse to do so when they play it on your traditional radio. Corporate radio is the only music platform getting a free ride."