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Broadcasters Lose Appeal to Stop Aereo Streaming Service

In a court case that may spell trouble for companies looking to charge a fee for the right to broadcast their content, an appeals court today upheld an earlier decision not to issue and injunction against internet streaming TV startup Aereo.

A group of 17 broadcasters including ABC, CBS, NBC Universal, Disney and Warner Brothers filed two suits against Aereo more than a year ago. One suit was an attempt to stop the service from streaming the broadcasters’ content to its subscribers.  The other seeks monetary damages for what they claim are copyright violations.

The Court of Appeals for the Second Circuit, in a two-to-one ruling, compared Aereo’s streaming device to the DVR provided by Cablevision to its subscribers,

“After a lengthy discussion of the facts and analysis of that decision, the district court concluded that Aereo’s system was not materially distinguishable from Cablevision’s Remote Storage Digital Video Recorder system, which we held did not infringe copyright holders’ public performance right.”

Dennis Wharton, executive vice president of communications for the National Association of Broadcasters reacted to the ruling by saying, “NAB is disappointed with the Second Circuit’s 2-1 decision allowing Aereo to continue its illegal operations while broadcasters’ copyright actions are heard.”

Aereo allows subscribers to watch and record programs without paying licensing fees on supported set top boxes, computers or mobile devices while they’re airing. Subscriptions range from a day pass for $1 to an annual plan costing $80.00. The annual plan includes the ability to record two shows at once or watch one show while recording another.

At issue is the lack of retransmission fees Aereo pays to air broadcasters content. Through its antenna set up, which assigns an individual antenna to each user, Aereo avoids paying the same fees satellite and cable operators pay for the right to air stations and their programming.

“Today’s decision from the Second Circuit Court of Appeals again validates that Aereo’s technology falls squarely within the law and that’s a great thing for consumers who want more choice and flexibility in how, when and where they can watch television,” said Chet Kanojia, Aereo CEO and founder in a statement. “Today’s ruling to uphold Judge Nathan’s decision sends a powerful message that consumer access to free-to-air broadcast television is still meaningful in this country and that the promise and commitment made by the broadcasters to program in the public interest in exchange for the public’s spectrum, remains an important part of our American fabric.”

In his lone dissent, Judge Chin wrote, “Aereo’s ‘technology platform’ is, however, a sham. The system employs thousands of individual dime-sized antennas, but there is no technologically sound reason to use a multitude of tiny individual antennas rather than one central antenna; indeed, the system is a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law.”

[New York Times]

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