Supreme Court clears the way for Cablevision’s new DVR

After three years of court fights, Cablevision’s controversial new digital video recording system is on its way to consumers’ homes.

The U.S. Supreme Court today refused to hear the appeal of a consortium of Hollywood studios looking to block the service. Cablevision said it plans to begin the roll out this summer.

The studios, which included Time Warner, General Electric’s NBC/Universal, CBS, Disney and Fox, alleged the new service would infringe on their copyrights.

Cablevision’s remote storage DVR system will allow users to record and store programming on centralized servers owned by the New York-based cable operator. Today’s DVRs record programming on a hard drive within a set-top box in the consumer’s living room.

The current equipment is expensive for cable operators to manufacture and install. Cablevision says the new service will result in considerable savings for it. Whether consumers will pay lower rates remains to be determined.

At issue is the common DVR practice of ad skipping. With its new service, Cablevision could see a substantial increase in the number of subscribers signing up for DVR service. (Industry experts believe the new technology could put DVR technology in nearly half the homes in America.)

That could negatively affect the number of people who view ads during shows, which ultimately could impact the ad rates charged by content providers.

Accessing the service would be akin to pulling up on-demand programming. But studios and networks negotiate licensing fees with cable providers for on-demand viewing. They presumably would not see any fees with shows recorded on the DVR.

“This is a tremendous victory, and it opens up the possibility of offering a DVR experience to all of our digital cable customers,” said Cablevision COO Tom Rutledge in a statement. “At the same time, we are mindful of the potential implications for ad skipping and the concerns this has raised in the programming community.”

To help market the service, Cablevision plans to offer the ability to pause live TV to all customers this summer.

Networks and studios won the first round of the court battle over remote-storage DVRs in 2007 when a New York federal trial judge agreed with their argument. That victory was short-lived, though, as the 2nd U.S. Circuit Court of Appeals overturned the ruling a year later.

The appeals court said the new DVR service was not substantially different from a VCR or current DVRs, meaning Cablevision was not liable for copies made by its customers.