The National Post, February 09, 2000 Copyright 2000 Financial Post DataGroup, A division of The National Post Company All rights reserved. National Post (formerly The Financial Post) February 09, 2000 Wednesday NATIONAL EDITIONS SECTION: FINANCIAL POST; Pg. C01 / Front LENGTH: 772 words HEADLINE: U.S. court order keeps iCraveTV off the Internet: 'We'll be back': Canadian Web site mulls appeal, may seek settlement BYLINE: Peter Morton DATELINE: PITTSBURGH BODY: PITTSBURGH - iCraveTV.com may be down, but the Toronto-based Internet broadcaster insists it is not out for the count. A U.S. federal court slapped a preliminary injunction on iCraveTV yesterday that forces it to stop video-streaming television channels from Buffalo, at least until it can prove U.S. residents are not tuning in to what the giant U.S. entertainment industry calls blatant piracy. 'We will go back up when we are convinced the site is tight,' Ian MacCallum, vice-president of iCraveTV, said yesterday after the court ruling, adding that an appeal is being considered. For two months, iCraveTV had distributed U.S. and Canadian television programming through its Web site, taking advantage of a Canadian copyright law that allows rebroadcasting of signals as long as they are not modified. Because U.S. Web surfers could easily get around the security designed to screen them out, the U.S. studio and broadcasting industry served iCraveTV and founder Bill Craig with a lawsuit last month, demanding the site be shut down. A similar suit launched by Canadian broadcasters and producers is continuing. Yesterday, Mr. Craig said the company was continuing to attempt to settle the dispute out of court. 'We have been engaged in negotiations with the U.S. and Canadian rights holders, which we expect to continue.' Mr. MacCallum tried to convince Judge Donald Ziegler the company just needed 'a couple of weeks' to make sure the site would be virtually as secure as the Pentagon by closing the 'back doors' used by computer hackers. Judge Ziegler, who had already hit iCraveTV with a temporary restraining order on Jan. 28, was only marginally sympathetic, saying that, in granting the injunction, he would review what iCraveTV had done in 90 days to ensure no U.S. residents could access what is supposed to be a Canadian-only site. 'We will persuade the court within 90 days that the security is tight,' said Andrew Schwartz, iCraveTV's U.S. lawyer. But the U.S. entertainment industry, co-ordinated through the Washington-based Motion Picture Association of America, remains skeptical. 'If they do put the site up, it will be at their own peril,' said Greg Jordan, a lawyer representing the major studios and broadcasters. Although a Canadian company, iCraveTV would face contempt charges if it is found to have violated the preliminary injunction. ICraveTV's security was largely undermined by Ben Edelman, a third-year Harvard University economics major who, according to stories here, is so into computers that he found a broker to buy Microsoft shares when he was in Grade 5. The soft-spoken Mr. Edelman, who was ordered repeatedly by Judge Ziegler to speak up, was called by the U.S. entertainment industry to hack into the iCraveTV site to find ways to beat the security. He told the court yesterday he found a number of ways quite quickly and gained access to protected iCraveTV computer Internet logs to find out where visitors to the site were located. 'It was not quite an all-nighter,' he said. ICraveTV had tried to convince the court that Mr. Edelman and others the entertainment industry has hired to surreptitiously test iCraveTV's claim it was a Canada-only site, were part of a deliberate 'smear campaign' aimed at Mr. Craig and his company. The trial was being held in Pittsburgh because Mr. Craig, a former Fox Sports and Pittsburgh Penguins executive, had registered his Web site here. 'They tried to set up a sting operation,' Mr. Schwartz said, telling the court he has evidence of other 'KGB agent' types of operations used by the entertainment industry to shut down the iCraveTV site. But the entertainment and professional sports industry, represented by more than half a dozen black-suited lawyers, denied it had launched a smear campaign. 'We're not here to smear Mr. Craig,' said Mr. Jordan. 'He doesn't need any help from us.' Instead, he pointed to a number of newspaper articles in which Mr. Craig and other executives vowed to stay online. 'The claim that this system was built and designed to reach [only] Canadians is ludicrous,' said Mr. Jordan. 'They were caught.' Although it is unclear whether the U.S. entertainment industry will seek damages in its lawsuit, the case is widely seen as a precedent-setting move to prevent what the industry sees as Internet piracy of copyrighted film, broadcasting and televised sports events. 'Today's preliminary injunction is another significant legal milestone in our battle to stop this kind of cyberspace theft wherever it occurs,' said Jack Valenti, president of the Motion Picture Association of America. GRAPHIC: Color Photo: Teresa Barbieri, National Post / Bill Craig, president of iCraveTV, says he is still trying to reach an out-of-court settlement in the dispute with the U.S. entertainment industry.Financial Post