If it is just transcoding then a) they are not storing it permanently, it is just in a "buffer" b) they are not changing the content any more than converting 16

If it is just transcoding then a) they are not storing it permanently, it is just in a "buffer" b) they are not changing the content any more than converting 16bit PCM audio to 8Khz voice quality (for instance for a music on hold application) is. That is, it is not "alteration" in that the song or image is still recognizably the same - they are not changing the rhythm of the song or the height of the buildings in the image.