Why so many want Aereo to beat broadcasters in the Supreme Court

FILE - In this Thursday, Dec. 20, 2012, file photo, Chet Kanojia, founder and CEO of Aereo, Inc., shows a tablet displaying his company's technology, in New York. Aereo is one of several startups created to deliver traditional media over the Internet without licensing agreements. (AP Photo/Bebeto Matthews, File)
Chet Kanojia, founder and CEO of Aereo, Inc. (AP Photo/Bebeto Matthews, File)

Precious little is known about Aereo, the online video startup that doesn't say how many subscribers it has in its select number of markets. Yet as it prepares to argue its legality before the Supreme Court later this month, the company has captured the attention and imagination of the media and technology world.

That's because the company, funded in part by IAC chairman Barry Diller, could upend the television industry if the high court decides that its capture of broadcast television signals doesn't violate copyright law.

Turns out many want to change the way the television industry works -- where programmers such as Fox, NBC Universal and ABC (Disney) charge cable and satellite firms enormous licensing fees and cable companies push fat and expensive bundles of channels on consumers.

Aereo's supporters came out in force on Wednesday in a string of amicus filings to the Supreme Court ahead of an April 22 hearing. In the filings, Dish satellite, smaller cable firms and even some small broadcasters argued that Aereo isn't violating copyright laws as alleged by every major television broadcasting firm. They, too, would like to get broadcast content without paying for ever-increasing retransmission fees.

Broadcasters began their legal battle against Aereo two years ago, saying the firm is illegally using a system of antennas to capture over-the-air broadcast signals of their programs without paying them license fees like cable and satellite firms do.

The case centers on the question of what is a "public performance" under copyright law. Aereo argues that it assigns individual antennas and a small amount of Internet storage space for each of its users to pull down the television content of their choice for streaming on the Internet. Broadcasters say that their shows are public performances because they are broadcast to many and that Aereo should seek licenses to retransmit the programs. But Aereo cites an earlier court decision in favor of Cablevision and its "cloud DVR,"which it says gave individuals the right to pull down programming over the Web.

Aereo supporters hope the high court will wipe the slate on how the industry works as more viewers turn to the Internet for their video content.

The American Cable Association told the court that it would want to partner with a company like Aereo. "The outcome of this legislation could have a substantial impact on the ability of ACA's members to employ the most efficient technologies, and to compete effectively with larger cable providers," ACA wrote.

Dish said the court's decision would have broad technological implications and “go so far as to touch technologies like Sling and cloud computing. It might even carry implications for a broad swatch of well-established functionality on the Internet — for example, Internet hyperlinks or indexed thumbnails.”

Public interest groups Public Knowledge and the Electronic Frontier Foundation, along with lobbying group the Consumer Electronics Association, urged the court to look at the case strictly as a study of copyright law.

"The legal question is just this: Does Aereo’s technology make public performances according to the words of the Copyright Act?" the groups said. "The Second Circuit answered this question correctly, finding that Aereo’s system of personal antennas and video streams allows individuals to make non-public transmissions of free broadcast channels that they may already access in their private homes independent of anything Aereo does. This Court should do the same."

Analysts are split on Aereo's chances. A lower court sided with broadcasters' request for a preliminary injunction, and the Obama administration's solicitor general earlier this year told the Supreme Court that it sided with the broadcast industry's charges.

The high court probably won't rule in the case before June.

 

 

Cecilia Kang is a national technology reporter, writing about tech and Internet policies at the Federal Communications Commission and Federal Trade Commission and how regulations affect businesses and consumers.
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