If size matters in the TV set-top box market, the new Skini by semiconductor company Sigma Designs wins by losing.

The Skini -- a combination of pay-TV receiver, Internet TV terminal and home automation hub -- is about the size of a couple of packs of playing cards, and it hangs off a wall outlet like a night light. It uses advanced powerline networking technology to connect to a home network, and Z-Wave wireless networking to receive commands from a remote control and send them to compatible light fixtures, thermostats and other devices.

The company unveiled a reference design for the box Monday. Michael Weissman, the company's vice president of corporate marketing, said he expects to see products based on Skini by Christmas or early next year, including digital media receivers and pay-TV set-tops. Those should sell for less than $100, he said.

That's the right price, and you've got to love the mini Skini's ability to hide behind the TV -- its remote's radio-frequency signals can pass through objects, unlike the infrared signals used by most controllers. Its capabilities are impressive too, at least on paper.

What would truly be compelling is if Skini-based products enabled consumers to combine basic pay-TV services with low-cost Internet video subscriptions, such as Netflix and Hulu, into more affordable video packages. But just because the reference design is capable of doing so, that doesn't mean pay-TV operators will interested in providing those features in their set-top boxes. Any company selling premium tiers and on-demand movies would have little or no incentive to help customers subscribe to Netflix instead.

A coalition of consumer electronics manufacturers, retailers and Internet companies has been pushing the Federal Communications Commission to circumvent that problem by adopting a new standard for set-top interoperability. Called AllVid, it would enable device makers to create gateways that bring multiple sources of audio and video to the TV screen, including pay-TV services, Internet feeds and files stored on home computers.

Not surprisingly, cable operators hate AllVid, arguing that the market, not government, should determine which technologies prevail. They also note that Internet-ready TVs are proliferating, an increasing number of which can receive cable TV service without requiring a set-top box. That's because those sets adhere to the cable industry's unique protocols, which would be useless to set buyers who switch to any other form of pay TV. But cable operators are also starting to deliver programming to devices whose interfaces they don't control, such as the iPad.

The open, multi-function environment envisioned by AllVid is tailor-made for the Skini. A federal mandate for the AllVid interface, Weissman of Sigma Designs said,  "only accelerates the opportunity for this type of technology."

The FCC hasn't ruled yet on AllVid. According to Ryan Lawler of GigaOm, FCC Chairman Julius Genachowski offered attendees at last week's cable industry trade show a typically opaque update on the proceeding, saying the commission would “take steps to spur innovation in and around the TV platform.”

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-- Jon Healey

Healey writes editorials for The Times' Opinion Manufacturing Division.

Credit: Sigma Designs

The number of people watching video on the Internet is expected to nearly double by 2015 to 1.5 billion while the amount of video they watch on the Web is also seen doubling to more than an hour a day, according to a forecast released on Wednesday by Cisco Systems.

In the company's Visual Networking Index, which is released annually and forecasts Internet usage over the next five years, Cisco predicts the amount of total Internet traffic will quadruple from 2010 to 2015, with video streaming a major factor behind the growth. 

Netflix's video streaming already accounts for more Internet traffic than anything else on the Web, making up nearly a quarter of all Internet traffic, according to a recent report by Sandvine Inc., a networking equipment company.

Arielle Sumits, a senior analyst for Cisco, said one of the biggest factors behind the expected exponential growth of Internet traffic is the migration of viewers from broadcast TV to Internet video.

Individual Internet usage is also expected to more than triple to nearly 25 gigabytes a month for an average user in 2015 from 7 gigabytes. That would be like watching six HD movies, 30 TV episodes and a 3-D move a month, compared to the average user today who could watch three HD movies and five TV shows.

Cisco, which makes networking devices and systems, stands to gain from the kind of increase in Internet usage it is projecting.

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Photo: Indian schoolgirl Akshaya Longjam watches a South Korean film on her laptop in Imphal. Credit: Findlay Kember / AFP/Getty Images

It appears Osama bin Laden may not have been totally disconnected electronically.

Despite reports that he didn’t have Internet connection or mobile service, Reuters quotes high-ranking Pentagon officials saying the Navy SEALs found pornography --- and a lot of it -- at Bin Laden's compound in Abbottabad, Pakistan, consisting of “modern, electronically recorded video.”

[Updated, 4:35 p.m.] According to the report, there was no word on how the material got there or to whom it belonged, as other people also lived inside the compound with Bin Laden. The story relies on unnamed government officials who have not released any other details or other evidence to back the claims.

The report has prompted some analysts to speculate that the porn may have been brought into the compound using thumb-sized flash drives that Bin Laden allegedly used to send emails while in hiding. Or it could’ve been through the satellite television that he used to watch Al Jazeera.

Either way, it was there, according to the officials, who declined to disclose the titles of the “extensive” collection.

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-- W.J. Hennigan

Photo: The U.S. government released five videos seized at Osama bin Laden's compound, including this image of the Al Qaeda leader watching himself on TV, with President Obama also seen. Credit: Reuters

BitTorrent Inc. released a new version of its client software Thursday, offering a simpler way for people to find, download and share files -- including, for the first time, a way to share them with a select group of friends. It's a potential boon to consumers looking to send high-definition home movies or slide shows to far-flung family members. The gains are more limited, however, for Hollywood studios and other copyright holders.

The BitTorrent protocol speeds up the transmission of files by enabling users to download them from multiple other users simultaneously. That's made it the protocol of choice for file-sharers, particularly for bootlegged movies and song collections. It's a neutral technology, though, and the Hollywood studios made their peace years ago with BitTorrent Inc., which invented the protocol. The company also claims to make the most popular client software for using its protocol; according to Shahi Ghanem, its executive vice president and chief strategist, more than 1 billion copies of those clients have been downloaded, and more than 100 million people use them at least once a month.

On Thursday the company released a beta version of its new client, dubbed Project Chrysalis, designed to make BitTorrent easier to use for consumers and content creators. It's still a work in progress on both fronts, but it's a step forward in several ways.

Premium movie channel Epix announced Wednesday that it would chase new viewers online by offering them ... trailers. Insert disappointed emoticon here.

If you're a cable TV subscriber in Los Angeles, you probably have no idea what Epix is, because it's not offered by Time Warner Cable. Or Comcast, DirecTV or AT&T. All told, the would-be competitor to HBO, Showtime and Starz is available to 30 million pay-TV subscribers, or about 1 in 4 TV households in the U.S.

Epix (a joint venture of Viacom, Paramount Pictures, MGM and Lionsgate) released applications Wednesday for "over 100 consumer electronic and mobile devices" that will enable its subscribers to watch Epix programming on those devices. The list includes Android-powered tablet computers, Samsung Internet-connected TVs and Roku set-top boxes, which bring video from the Internet to a television set. The tablet-computer app has appeal, but why would Epix subscribers (who get the channel and its on-demand counterpart on their pay-TV service) want to stream versions of the same movies to their TV sets?

The company's new TV and set-top-box apps would make a lot more sense if Epix allowed people who don't (or can't) get its pay-TV channel to buy subscriptions to the online feed. HBO and Showtime won't do that for fear of undermining the pay-TV operators who provide the vast bulk of their revenue. Unfortunately for Epix, it doesn't have nearly as much to worry about on that front. It hasn't persuaded the country's largest cable and satellite operators to carry it.

Nevertheless, Epix is eschewing the growing market of cable-cutters. Evidently trying to build a groundswell of demand for its pay-TV channel, Epix is enabling nonsubscribers to use the apps to watch the service's "robust offering of movie trailers, interviews and short form video content." Now there's a unique consumer value proposition!

It's also promising "limited free trials" of long-form content for nonsubscribers. Maybe that will persuade more of the people who do have access to the pay-TV version of Epix to subscribe, and maybe that's the true low-hanging fruit. But how large is that number compared with those who don't have access to Epix's cable channel?

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-- Jon Healey

Healey writes editorials for The Times' Opinion Manufacturing Division.

Bamboom Labs wants to help people cut their cable cords by putting local TV broadcasts online with all the digital trimmings -- that is, the ability to watch live or recorded shows in high definition on any device with a browser, anywhere a broadband connection is available. It's technologically ingenious, but I can't decide whether it's a service the market has been waiting for or a lawsuit waiting to happen. Or maybe it's a solution to a problem not many people are eager to solve.

The New York-based startup is the brainchild of Chaitanya "Chet" Kanojia, former chief executive of Navic Networks, whose technology in set-top boxes enabled cable and broadcast networks to measure audience demographics and match advertisements to them in real time. His time at Navic taught him that at any given moment, about half of pay TV viewers were tuned in to local broadcast channels. That observation led him to believe that if he could get live broadcast signals to people reliably, with the ability to time-shift shows and watch them on any device, and with the social features of the Internet, they'd be more willing to abandon cable and satellite TV.

Other companies have taken on parts of this challenge. For example, Sling Media makes set-top boxes that let people tune in remotely to the TV service they have at home. And Monsoon Multimedia makes set-tops that combine remote viewing with TiVo-like digital video recording. But those devices build off of the programming that pay TV delivers to homes. Kanojia wanted to let people watch local broadcasts  through the Net without the help of pay TV.

Here's where things get complicated.

While Time Warner Cable and Cablevision deliver conventional television programming to their customers' iPads, other companies are trying to use the tablet to redefine what TV might be. A good example is the San Francisco-based Remixation, the company behind Vodpod, which unveils an intriguing online video application for the iPad Wednesday.

The free app, Showyou, enables people to create and watch personalized streams of online video. Instead of relying on the talents of TV studios and network programming executives, it draws from user-generated content sites (YouTube, Vimeo and TED at the moment) and social networks (Facebook, Twitter and Vodpod). And it takes advantage of the touch screen on the iPad (or iPhone or iPod Touch) to make it easier to navigate through the grid of shows, rather than the up-down and left-right buttons of a TV remote.

The short-term goal is to be "the best app on your phone or your tablet for finding video and sharing it with your friends," Chief Executive Mark Hall said. But "the more provocative long-term vision" is to become a prime-time TV alternative.

LG's Internet-connected TVs will soon be displaying content from Brightcove, a popular online video platform for businesses and news agencies.

Brightcove Inc., which has more than 2,700 customers in 50 countries, will roll out a software development kit later this year that will enable it users to build video-playing apps for LG's NetCast software.

Among the Cambridge, Mass.-based company's customers are the Discovery Channel, General Motors, the New York Times, Ticketmaster and Reebok.

"Consumer electronics companies, such as our partner LG, are creating the largest global distribution network into the living room," said Eric Elia, Brightcove's vice-president of TV solutions, in a blog post. "SmartTV, as LG calls their platform, is to the TVs of yore like smart phones are to feature phones."

Elia noted that Piper Jaffray analyst Gene Munster has forecasted that 106 million Internet-ready TVs will be sold in 2012 -- each being an outlet for online video distribution.

Financial terms of the deal, or how long it will last, weren't disclosed by either LG or Brightcove on Wednesday.

The deal to distribute content on LG's NetCast TVs is Brightcove's first pairing with a TV maker, though it can distribute video on set-top boxes such as the Boxee Box.

Brightcove also offers video players compatible with Adobe Flash and HTML5, in addition to mobile operating systems such as Apple's iOS, Google Android, Nokia's Symbian, HP WebOS, Windows Phone, and Research In Motion's BlackBerry phones -- as well as Facebook and YouTube.

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Online TV service Ivi loses a round in court

-- Nathan Olivarez-Giles

twitter.com/nateog

A federal judge in New York ordered Internet TV service Ivi to shut down Tuesday, finding that it violated the copyrights of a group of broadcasters and Major League Baseball. It was yet another example of a tech company trying in vain to stretch the boundaries of copyright law to avoid paying as much for content as its more conventional competitors.

Ivi TV captured the broadcasts of 55 stations in Los Angeles, Seattle, Chicago and New York, then retransmitted them through the Internet to subscribers for a fee of just under $5 a month. For an additional 99 cents a month, viewers could pause, rewind and fast-forward shows, although they could not record them for later viewing.

Copyright law gives cable operators the right to carry broadcast stations if several conditions are met, and provided that they pay a small portion of their revenue in royalties. But the law also requires that cable operators abide by Federal Communications Commissions regulations, which (among other things) give broadcasters the right to demand higher fees for retransmission rights.

Ivi argued that it was a cable system entitled to carry broadcast signals, but also that it was an Internet service and so immune from FCC regulation. As such, it argued that it could retransmit stations online while paying royalties -- about $100 a year, according to U.S. District Judge Naomi Reice Buchwald's ruling. Major League Baseball and two dozen broadcasters and studios (including two arms of the Tribune Co., owner of the Los Angeles Times) sued, arguing that Internet-based services aren't cable systems and as such are not entitled to an automatic (or "compulsory") retransmission license.

Buchwald agreed, granting a preliminary injunction against Ivi. She held that Congress created the compulsory license for local cable systems, not national (or global) operators online, and did so within a larger regulatory framework:

Congress legislated with an understanding that the cable systems it was granting a compulsory license to would also be subject to the regulations of the FCC.... [N]o company or technology which refuses to abide by the rules of the FCC has ever been deemed a cable system for purposes of the Copyright Act. Significantly, companies such as AT&T U-Verse, which claim to operate outside of the jurisdiction of the Communications Act, still comply with these rules, most significantly by obtaining retransmission consent.

She also said that if Ivi's interpretation of the law were taken to its logical conclusion, the result would be absurd:

As plaintiffs argue, defendants’ view of Section 111 essentially means that anyone with a computer, Internet connection, and TV antenna can become a “cable system” for purposes of Section 111. It cannot be seriously argued that this is what Congress intended.

Ivi had a number of supporters among pro-technology public-interest groups, which argued that Ivi benefited the public by providing more competition to incumbent cable and satellite TV services. But Buchwald held that the law doesn't hold the door open to online competitors, who cannot enter the market without the permission of the broadcasters whose signals they seek to retransmit.

The company and its allies also tried to persuade the court not to act until the lawsuit could go to trial, arguing that Ivi is too small to divert a meaningful amount of advertising away from broadcast TV in the interim. Buchwald pointedly disagreed:

Defendants cannot seriously argue that the existence of thousands of companies who legitimately  use plaintiffs’ programming and pay full freight means that Ivi’s illegal and uncompensated use does not irreparably harm plaintiffs. Likewise, they cannot contend that since Ivi is small and plaintiffs are large, they should be allowed to continue to steal plaintiffs’ programming for personal gain until a resolution of this case on the merits. Such a result leads to an unacceptable slippery slope.

It's easy to understand why companies like Ivi keep trying to find ways to deliver TV signals despite the limits imposed by time, space and contracts. Live broadcast television remains the most popular video medium in U.S. homes, attracting the biggest audiences and generating the most advertising dollars. Only a few companies have found a way to do so without running afoul of TV industry lawyers -- TiVo and Sling being two good examples. Others, such as ReplayTV and ICraveTV, have not. Buchwald's decision Tuesday was just a preliminary one, but she moved Ivi much closer to the latter category than the former.

[Updated at 2:22 p.m.: Ivi TV Chief Executive Todd Weaver responded to the ruling with a statement. Here's the money quote:

Judge Buchwald's opinion is premised on her statement that ivi is 'not complying with the rules and regulations of the FCC'. This conclusion is simply false, as ivi has met with the all the commisioner's offices of the FCC repeatedly and has received assurances that we are in full and complete compliance. Judge Buchwald makes the legal mistake of misinterpreting the copyright law to instead make communications policy. Communications policy is the province of the FCC and, by basing a judicial copyright decision on communications regulations to be administered by the FCC, the judge is overstepping her constitutional authority.]

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-- Jon Healey

Healey writes editorials for The Times' Opinion Manufacturing Division.

HTC unveiled the Flyer, its first tablet, on Tuesday in Barcelona, Spain, during the Mobile World Congress event.

With the Flyer, HTC seems to be aiming for a higher-end feel with an aluminum body, a 7-inch touchscreen and a quick 1.5 gigahertz Snapdragon processor from Qualcomm.

The device, which is set to hit retail stores in the second quarter of the year, will come with 32 gigabytes of storage and connect to the Internet via Wi-Fi, as well as 3G and 4G HSPA+ networks.

Android Honeycomb will not be pre-installed on the Flyer, but users will be able to upgrade to the tablet-optimized version of Android from Android Gingerbread, a build of Google's operating system designed for smart phones.

HTC's Sense interface for Android makes its way from the company's phones over to the Flyer with the recognizable time and weather widget on the home screen.

Apps can also be run in a split-screen view, allowing a user to use two apps at the same time -- say the Website for a record store where a user can get an address, split with Google maps to locate it and find directions.

A digital pen will be packed with the Flyer for drawing and writing in certain apps on the tablet in what the company is calling HTC Scribe technology.

A 5-megapixel camera is on the back of the tablets, while a 1.3-megapixel camera can be found on the front for use with video chat software such as Skype.

The tablet will also be the first device offered with the company's HTC Watch video download service.

HTC described the service as "low-cost, on-demand progressive downloading of hundreds of High-Definition movies from major studios."

Another interesting addition is video games through OnLive, the cloud-based gaming service for laptops and TVs. HTC said users will be able to connect the Flyer to television sets to play games via OnLive, or games can be played directly on the tablet.

HTC didn't mention how games that have previously required the use of a video game controller on the Xbox 360 and PlayStation 3 would be played on the tablet, but promised titles such as Assassin's Creed Brotherhood, NBA 2K11 and Lego Harry Potter.

Below is a marketing video HTC posted on YouTube for the Flyer.

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-- Nathan Olivarez-Giles

twitter.com/nateog

Top photo: An HTC employee demos the new Flyer tablet computer at the Mobile World Congress in Barcelona, Spain, on Tuesday. Credit: Denis Doyle/Bloomberg

Bottom: HTC Flyer. Credit: HTC