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Aereo Welcomes Supreme Court Case, Continues Expansion

Kathy Zerbib |
December 22, 2013 | 1:25 p.m. PST

Film Editor

The Aereo logo (Twitter/@VirginiaLamNYC).
The Aereo logo (Twitter/@VirginiaLamNYC).
In a bold move by Aereo, the digital company that allows its customers to stream network television on any Internet device, it publicly welcomed the possibility of a Supreme Court case. What does this mean for expanding coverage to include the West coast and, specifically, Los Angeles?

Aereo is a New York City-based company that works without a cable subscription. For $8 a month, people can watch ABC, NBC, ION, Univision, PBS Kids, the CW, and other stations on their desktop computers, iPhones, and iPads.

The company argues that its services fall within the law, comparing its innovative technology to a more advanced version of standard antenna and DVR systems. Each subscriber has his or her own antenna that picks up broadcast signals of local television stations, which then streams the channel online to the subscriber's device and gives the individual the option to record content. 

“The key point is that Aereo is essentially a DVR in the cloud. It helps users watch TV programs they could already watch with an antenna in the home, and lets them save those programs for later, just as they could with a TiVo for cable,” James Grimmelmann, Professor of Law at the University of Maryland, said. “If broadcasters have a beef with that, then they have a beef with their viewers, not just with Aereo.”

As it turns out, the broadcasters do have a beef with Aereo. CBS, NBC, ABC, and Fox targeted the company earlier this year for copyright infringement. According to them, Aereo essentially has the role of a cable or satellite TV company and must pay a licensing fee to stream the broadcasters' content. The broadcasters worry Aereo's expansion will threaten distribution fees, especially given the company's plan to expand nationally.

READ MORE: Utah Stations Ask Court To Halt Controversial TV Service Aereo

The Second Circuit Court of Appeals in New York and two federal appeals courts later, Aereo remains victorious. The Second Circuit Court ruled 2-1 in favor of Aereo, stating its use of an antenna and DVR-like recordings of broadcast material are indeed not a breach of copyright.

Michael Risch, Professor of Law at Villanova University, explains Aereo’s business model has successfully overcome its challengers because the company is not actually using broadcaster content in a “metaphysical way.”

“It is retransmitting content that is already out on the airwaves to customers who already have the right to access that very same content with their own antennas,” Risch said.

Lawrence Greenberg also believes Aereo’s services are in accordance to the law, though the company may appear to be “gaming the system.” 

The Professor of Law at American University says broadcasters must be able to prove Aereo infringes on rights outlined in the Copyright Act.

“Being a broadcaster doesn’t give you absolute control over all uses of your content, any more than being a book publisher gives you the right to stop people from selling (or setting on fire) their copies of your book,” Greenberg said. “The Second Circuit held that by assigning an individual antenna for each customer and making individual copies of programming for each, Aereo was not making a public performance of copyrighted work. I buy that.”

Bruce Boyden disagrees. He believes Aereo’s services do require a license to comply with the Copyright Act.

“My own opinion is that when Aereo sets up a system that is specifically designed to record and retransmit broadcast television whenever users request it to, Aereo is recording and transmitting those programs, which means under the Copyright Act that Aereo is engaged in reproduction and public performances,” Boyden – Assistant Professor of Law at Marquette University – said.

Broadcasters favor Boyden’s opinion and have not given up the fight, as the four big networks then petitioned the Supreme Court in October to review the earlier decision. In its filing, the broadcasters claim the decision is a threat on the television industry and the court is "blessing a business model that retransmits 'live TV' to paying customers without obtaining any authorization or paying a penny to copyright owners." When asked to comment, CBS and ABC declined to make statements concerning Aereo or their petition with the Supreme Court. 

Aereo’s CEO and founder Chet Kanojia disagrees with the major broadcasters and recently released a statement welcoming a Supreme Court case against his company. In it, he says Aereo will not oppose the broadcasters' request for an appeal. Kanojia is confident the broadcasters' relentless pursuing will again flop in court.

"Consumers have the right to use an antenna to access the over-the-air television. It is a right that should be protected and preserved and in fact, has been protected for generations by Congress," he said. "Eliminating a consumer's right to take advantage of innovation with respect to antenna technology would disenfranchise millions of Americans in cities and rural towns across the country."

His certainty in Aereo is then punctuated with his closing words, stating the company looks forward to "continuing to delight [their] customers."

Upon further attempting to contact Aereo, the company said the press release was the only statement it wanted to give at this time.

But is SCOTUS likely to review this particular case?

Boyden says no, pointing out three other cases up for appeal at the moment. He says the Supreme Court will favor those cases before this one, especially since Aereo’s case is a technical issue to debate.

Despite the possibility of a Supreme Court case, Aereo is continuing to expand its coverage across the nation. The company just extended coverage to Baltimore on December 16. 

READ MORE: Aereo To Launch In Baltimore, Still A Dozen Cities Short Of Goal

Aereo is currently available in big cities such as New York, Boston, Detroit, Atlanta, and Miami. The furthest West the company has reached is Salt Lake City. Coverage will soon be available in Cincinnati, Philadelphia, Tampa, and Austin.

Before the company can hope to expand all the way to Los Angeles, however, the experts agree Aereo needs more concrete favoritism in court.

Greenberg explains any hope for Westward expansion depends upon what SCOTUS – granted the case is accepted for review – has to say.

“That’s part of the reason why Aereo is not opposing the networks’ appeal to the Supreme Court,” he said. “Until the Court rules, Federal law may apply differently in different parts of the country, so it wouldn’t be surprising for Aereo to focus on expansion where it is confident the courts will support it.”

There is no word yet on whether or not the Supreme Court will take the broadcasters' case, or if Los Angeles is even on the map for Aereo's plans. 

Nonetheless, Grimmelmann says waiting for coverage on the West coast may take a while. Though Aereo fought and won in the Second Circuit Court on the East coast, the company is far less likely to triumph in the West coast's Ninth Circuit. 

“Aereo has been reluctant to open in California because the federal appeals court with jurisdiction there has been less sympathetic to Internet broadcasters than the appeals court with jurisdiction in New York,” Grimmelmann said.

Still, he believes Aereo might be more willing to provide coverage in the event of a favorable Supreme Court ruling or if several other lower courts show their support.

Reach Film Editor Kathy Zerbib here. Follow her on Twitter here.



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