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New version of Dish's Hopper DVR likely to rile broadcasters

By Liana B. Baker

(Reuters) - Satellite television provider Dish unveiled on Monday the latest version of its controversial digital video recording device, dubbed the Hopper, with new features such as the ability to stream live TV and recorded programs outside the home.

Already embroiled in a legal battle with all the major broadcast networks over the DVR's first iteration, Dish could engender a new round of lawsuits with its updated version, which it is calling "Hopper with Sling."

Announced at the Consumer Electronics Show in Las Vegas, the updated Hopper uses "sling" technology that redirects a live or recorded TV signal from the set-top box to Internet-connected devices. That means that Dish subscribers with the new version can watch live TV wherever their mobile device or computer has Internet access.

The updated Hopper also features an app that allows customers to transfer saved TV programs to an Apple iPad so they can access shows on planes, subways or other areas where Internet access is unavailable. Such a transfer can only occur once.

Vivek Khemka, vice president of product management at Dish, said that the updated Hopper falls within "fair use policy" and does not violate copyrights.

"We believe this is consumer initiated. The consumer is choosing to watch their content, so it's well within the fair use policy," Khemka said.

But a source familiar with programming deals, who asked not to be named, said Dish may be violating contracts with media companies by offering Internet streaming of TV outside the home.

"The definitions are really tight and primarily talk about residential use and define the delivery technology," the source said about programming contracts.

In terms of transferring a copy of the iPad to content, the source said that Dish could find itself in legal trouble because "download rights are specifically negotiated," and often complicated.

A Fox spokesman had no comment on Dish's new Hopper. Representatives for CBS, NBC, ABC did not immediately return requests for comment.

When Cablevision Systems Corp released a similar app in 2011 that allowed for streaming in the home it was sued by Viacom for violating its contract with the programmer. The case settled in August 2011.

Dish, which ranks as the nation's second-largest satellite television provider with 14 million subscribers, is using the new Hopper as a way to attract customers to its service. The company plans to give it away for free to new customers who sign up for a two-year contract. The price for existing Dish customers will be revealed later.

Dish's sister company, EchoStar Communications, acquired Sling Media, the company that developed the technology, in 2007 for $380 million. Both Dish and EchoStar are controlled by eccentric billionaire Charlie Ergen.

Currently, all of Dish's channels ranging from ESPN to premium channels such as HBO or Showtime are available for live viewing on devices other than the TV depending on what programming package customers have. Subscribers can also watch any recorded programs that are saved on their DVR.

"If you get it at home, it's here (on the Hopper). Any channel on the guide is available, or anything you've DVR-ed," Khemka, the Dish executive, said.

BROADCASTERS UPSET

Dish last year introduced DVRs with an "autohop" function that allows subscribers to skip commercials entirely when they are watching recorded shows, drawing the ire of broadcast network television owners such as CBS and News Corp's FOX.

Analysts at the time said Dish was using its Hopper DVR as a way to fight back against retransmission fees, which are payments cable and satellite companies pay to broadcast stations to carry their networks.

The autohop feature is also available on the new Hopper, which Dish touted as being twice as fast as the last one.

Watching TV over the Internet on mobile devices or computers through a pay TV provider is not new. In fact it's part of an industry effort dubbed "TV Everywhere" that's aimed at stopping consumers from cutting the cord in favor of cheaper online services such as Netflix or streaming on Amazon.com.

But these TV Everywhere services have not been widely adopted by consumers largely because the offerings are limited. Not all channels can be viewed on mobile devices and only a few networks can be streamed live, depending on specific agreements. Time Warner, which has the "HBO GO" app is considered a rare success.

Dish CEO Joe Clayton said that "consumer behavior of watching Internet video is not going away" and Dish needs to adapt as the pay TV market shrinks.

"With Hopper, the value equation for pay TV becomes radically different. Customers pay only once for their content and can access it anywhere they choose, in the home, or on the go," he said.

(Additional reporting by Lisa Richwine in Los Angeles; Editing by Peter Lauria, Cynthia Osterman and David Gregorio)

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