The Washington PostDemocracy Dies in Darkness

Aereo to the FCC: Let us join the cable companies we tried to replace

Aereo's service uses thousands of tiny antennas to help it stay within the bounds of copyright law. (Aereo)

It's been weeks since we last heard from Aereo, the shuttered streaming video service that lost big at the Supreme Court this summer. Now it's back, and the company is rolling over in its fight against TV broadcasters — in hopes of a longer-term victory in Congress.

The Federal Communications Commission is  weighing whether to extend regulations for satellite television providers, cable companies and other "multichannel video providers" to Aereo and other "linear" online video distributors. (Linear distributors are considered distinct from on-demand services like Netflix or Hulu, so those services aren't likely to be affected by the rule.) In a meeting last week, Aereo told the FCC that it would be willing to accept those regulations.

"Online linear channel streaming services have the ability," Aereo wrote in its FCC filing describing the meeting, "to comply with the Commission’s regulatory obligations imposed on MVPDs, such as program carriage, emergency alerts, equal opportunity employment and closed captioning."

What Aereo left unsaid here is really the biggest piece of news: By accepting the label of MVPD, Aereo would also need to start negotiating with broadcasters over content, or "retransmission" fees — which is precisely what Aereo's original business model was designed to avoid. (Other MVPDs pay broadcasters money for the right to retransmit free, over-the-air television signals to their subscribers.)

The last few months has seen Aereo looking for creative ways of getting out of paying retransmission fees. When the Supreme Court said that the company looked, for all intents and purposes, like a cable company, Aereo tried to suggest that it pay the federal Copyright Office a lower rate rather than pay broadcasters directly. With this move, Aereo was basically claiming to be a cable company for the purposes of copyright but specifically not for the purposes of the FCC.

That theory was stymied when the Copyright Office deferred to the FCC, where there's an unresolved debate about online video services and how they should be regulated. If the FCC had said online video distributors were not MVPDs, that could have put Aereo in trouble: It might not then be able to argue before the Copyright Office that it was a cable company deserving the lower rate, after all.

But the FCC now appears poised to go the other way — saying that Aereo is an MVPD. Aereo evidently agrees. If you find this surprising, you're probably not alone. It'd be a double victory for the broadcasters: Not only would it would put an end to a years-long battle over fees and represent Aereo's unconditional surrender on that question specifically, but it would also open up new opportunities for broadcasters to make advertising dollars.

Dennis Wharton, a spokesman for the National Association of Broadcasters, said the lobbying group hadn't had a chance to review the Aereo filing. "However," said Wharton, "NAB has said we support having local TV programming on as many distribution platforms as possible, so long as distributors respect the copyright interests of broadcasters."

So after spending all this time trying not to pay retransmission fees, is Aereo simply giving up now? Not entirely.

"This is a regulatory no-man's-land we're in right now," said an Aereo official on the condition of anonymity because the company's legal proceedings are still ongoing. "We need that regulatory clarity to move forward. This is not a good environment for any business to operate in, without having a clear sense for what the rules are."

Again, what Aereo isn't saying here is more important than what it is saying. The company's longer-term aim is to shape big, looming changes in Congress around video and TV. Beginning next year, the House intends to start working in earnest on an update to the Telecommunications Act, the law that gives the FCC its powers and forms the basis for pretty much all the policies coming out of the agency, including the ruling on MVPDs. Meanwhile, the Senate is expected to revive a proposal known as Local Choice that would rework the entire system governing retransmission fees.

In short, Aereo is saying it can live with paying those fees for now because it expects lawmakers to side with them in the long run.