Fox and other broadcasters are asking a New York appeals court to reconsider its decision to give a green light to Aereo, a controversial start-up that uses tiny antennas to retransmit over-the-air TV to mobile devices for $8 a month.
In a new court filing (embedded below), the broadcasters claim the decision “threatens to cause massive disruption to the television industry” and “will wreak commercial havoc,” and request a full panel of the US Second Circuit Court of Appeals to revisit the ruling.
The start-up Aereo has been at the center of a storm in recent months because its technology threatens to blow-up the existing model of pay TV, which is based on selling viewers a bundle of channels, that include over-the-air stations like NBC, ABC, CBS and Fox. Aereo is backed by a $58 million investment from media mogul Barry Diller and others, and lets customers watch and record TV without a subscription for $1 a day or $8 a month.
In the past, other companies have retransmitted TV signals over the internet but broadcasters quickly smashed them for copyright infringement. Aereo, however, has survived two major court challenges thanks to its technology which assigns a mini-antenna (see pic below ) to each subscriber; the service is now live in New York City and is slated to arrive imminently in 22 more markets.
In the new filing, broadcasters howl that Aereo’s individual antenna system is just a loophole to get around a copyright regimes that requires any company that plays over-the-air signals, including cable and satellite firms, to pay retransmission fees. The brief also cites a paidContent story to warn that Aereo wants to team up with distributors like Dish network and Time Warner Cable to expand its reach.
On a broader level, the legal manœuvreing is part of a great game between Aereo and the broadcasters over the future of TV that could end up at the Supreme Court. In the coming battle, the broadcasters are pinning their hopes on a recent California court case, which shut down an Aereo clone and rejected the theory that a private antenna means a transmission is not “public” under copyright law – a theory accepted by two out three judges on the Second Circuit court.
In the new filing, the broadcasters rely heavily on the opinion of dissenting judge Denny Chin, who described Aereo’s technology as a “sham” and a “Rube Goldberg” device that “over-engineered” to dodge copyright.
While the dissent and the California case provide the broadcasters with ammunition, the request for a review by all of the judges on the New York court is a long shot. This is because, unlike other appeals courts, the Second Circuit almost never agrees to hear so-called “en banc” appeals; in the event it did rehear the case, the judges would be reluctant to accept the broadcasters’ invitation to declare that they were wrong on an earlier case that formed the basis of their opinion for Aereo.
This means the Supreme Court — or Congress — is the broadcasters’ best hope. Time is not on their side, however, because it would take years for the legal case to be heard and decided. By that time, technology and consumer habits for TV may have changed dramatically.
The CEO of Aereo will offer his two cents on the bigger picture of TV at paidContent Live which is taking place on Wednesday in New York City.
Legal types — here’s a marked up version of the broadcasters’ very well drafted legal brief:
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