Court ruling devalues internet rights in Australia

Optus has won a landmark television rights case enabling the Australian telecommunications company to bypass Telstra's ownership of exclusive internet rights to Australia's preeminent sports leagues.

The case surrounded Optus' TV Now service which allows customers to record free-to-air television - including Australian Football League (AFL) and National Rugby League (NRL) matches - from an online or mobile device onto a cloud storage system and watch it back within minutes, a technology that results in near-live streaming of television.   

"It is a major concern as it clearly has the capacity to devalue the ability of the sports to sell exclusive rights."

Though Telstra holds the exclusive internet broadcast rights to both the AFL and NRL, Justice Steven Rares deemed that the act of recording live TV when utilising the TV Now service meant that Optus was not guilty of re-broadcasting already copyrighted material.

"For us it's always been about free-to-air television, recording it and playing it back at a time more convenient, that's how we developed the product," said Optus spokeswoman Clare Gill. "It was not category-specific in anything to do with the categories of television, whether it be light entertainment, documentaries, news or sport."

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Despite the ruling, representatives from both the AFL and NRL said they would appeal the decision.

AFL chief operating officer Gillon McLachlan said, 'We maintain that the Optus action is a breach of copyright." Adding, "We are only in the pre-season of this issue."

Similarly NRL chief executive David Gallop said the league would "very likely" appeal the decision. "It is a major concern as it clearly has the capacity to devalue the ability of the sports to sell exclusive rights."

According to Gallop, the NRL's media rights for the next five years are due to be awarded "in the first half of 2012, in time for a 2013 start," and it is feared that the ruling in favour of Optus will significantly devalue the rights on offer.

Asked whether Telstra would tear up its ongoing AU$153 million contract with the AFL, Telstra spokesman Craig Middleton said, "I don't think that is the case at the moment, what we're focused on is bringing live AFL coverage through our online and mobile services this year."