Summary:

The Second Circuit Court of Appeals refused broadcasters’ petition for an en banc appeal of an earlier ruling that says Aereo is legal. The service will thus stream on in New York for the foreseeable future.

Castle on Aereo TV
photo: Aereo

Aereo, the start-up that streams live TV to mobile devices for $8 month, can stream in New York for the foreseeable future, after an appeals court refused to revisit its earlier 2-1 decision that declared the service legal.

In a decision issued on Tuesday morning, the US Court of Appeals for the Second Circuit refused a request brought by CBS and other major broadcasters to rehear the appeal before a full panel of judges. The majority opinion simply stated that a poll of judges revealed that a majority of judges did not wish to rehear the matter, and that was the end of it.

In an unusual dissent, however, Judge Denny Chin declared Aereo to be a “sham” and warned that it was harming the television industry. The nearly 30-page dissent followed Chin’s earlier objections, which he set out in the 2nd’s earlier ruling, upholding the case. He added:

Indeed, the hardware and technology in Cablevision and the antennas and wiring at issue here are fast becoming obsolete in this era of the “Cloud” and wireless technology.  Courts should follow Congress’s lead and resist the urge to look “under the hood” at how these processes technically work

Chin’s decision to pile on to his earlier dissent is likely a strategic effort to supply the broadcasters with more ammunition if the case reaches the Supreme Court — a distinct possibility given that a California judge shut down a service similar to Aereo in most of the western United States. The legal fight also moved to Boston last week. You can see a map here thatshows whether Aereo is legal in your state.

The central issue in the Aereo case is whether the start-up’s decision to provide one antenna for every subscriber makes it a legal private transmission under copyright law or, instead, an illegal public broadcast — as CBS and others claim.

In the original 2-1 ruling, the majority found that Aereo’s technology is consistent with an early case called Cablevision that found remote DVR’s to be legal.

In the bigger picture, Aereo is a strategic attempt, funded by the deep pockets of media mogul Barry Diller’s IAC, to blow up the existing TV model in which consumers are forced to buy expensive bundles of channels, even though they don’t watch most of them.

Correction: an earlier version of this story that suggested Barry Diller is a director investor in Aereo; Diller is the chairman of IAC, which invested in Aereo.

Here’s the ruling:

2nd Circ Upholds Aereo en Banc

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