The nation’s biggest television broadcasters are collectively asking for the Supreme Court’s support in their quest to stop Aereo, a small Internet start-up that threatens some of the underpinnings of the TV business.
[h=6]Bebeto Matthews/Associated Press[/h]Chet Kanojia is the founder of Aereo, a streaming service.
In a filing on Friday, the media companies petitioned the court to determine whether Aereo’s method of sending television signals to paying subscribers from small antenna farms violates decades-old copyright law. Aereo says it does not, but the companies say it does. Lower court rulings on the matter have mostly favored Aereo to date.
“Today’s filing underscores our resolve to see justice done,” one of the petitioners, Fox Television Stations, said Friday. “Make no mistake, Aereo is stealing our broadcast signal.”
The other petitioners included divisions of the Walt Disney Company, which owns ABC; Comcast, which owns NBC and Telemundo; CBS, PBS and Univision. All of the companies own local television stations that transmit over the public airwaves and normally compete with one another; by joining together they are presenting a united front against what they say is Aereo’s illegal disruption of their business model. They are aware that they face long odds: the court grants about 1 percent of all petitions filed.
Aereo declined to comment on the petition on Friday, other than to say, “We will respond, as appropriate, in due course.”
The deepening dispute has the potential to affect every American television viewer. The broadcasters have said they will go to extreme lengths to halt Aereo and services like it — even if they have to yank their signals from the public airwaves.
Aereo, which is backed by the former Fox network co-founder Barry Diller, exploits what some analysts have called a loophole in copyright law involving public performances. It picks up the signals of local television stations using arrays of antennas in each city it operates in, like New York, Atlanta and Salt Lake City. Then it streams the signals to subscribers who pay $8 a month. In effect Aereo makes it easy to turn smartphones and tablet computers into personalized TV sets — something that the broadcasters haven’t moved swiftly to do.
Because it assigns individual antennas to every viewer, Aereo says its Internet streams are not public performances. Thanks to the antennas, it says, it has no obligation to pay what are known as retransmission consent fees to local stations. Those fees, routinely paid by cable and satellite providers, have become an important supplement to advertising revenue for local stations (like WNBC in New York) and their network partners (like NBC).
What the station owners fear more than Aereo is the possibility that cable and satellite providers, emboldened by Aereo, will set up their own antenna arrays to avoid paying retransmission fees. In their petition on Friday, the broadcasters said that “certain cable and satellite companies” have threatened to use a Second Circuit court ruling in favor of Aereo “as a road map for re-engineering their own delivery systems so they too can retransmit broadcast signals without obtaining the broadcasters’ permission.”
Aereo was upheld by a three-judge panel of the Court of Appeals for the Second Circuit last spring, although in a dissent one of the judges likened the streaming service to “a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act.” The Second Circuit has jurisdiction over New York, Connecticut and Vermont.
Aereo won in court again on Thursday, this time in Boston, where a district court rejected a local station’s request for an injunction against the service.
The broadcasters have had more luck against an Aereo copycat called FilmOn X in the Ninth Circuit, which has jurisdiction over much of the western United States. A district court in California issued an injunction late last year, and FilmOn has appealed. Paul Gallant, a Guggenheim Partners analyst, said the Ninth Circuit could rule any time before the end of the year.
“Should the Ninth Circuit create a circuit split in the coming months by ruling in favor of broadcasters, the odds of Supreme Court review clearly would rise,” Mr. Gallant wrote in an analyst note earlier this week.
There was skepticism in some quarters on Friday, partly because the broadcasters were perceived to be resisting a form of technological convenience — streaming TV on Internet-connected devices — that consumers have shown they want.
The broadcasters “feel they have somehow been uniquely violated,” said James McQuivey of Forrester Research. But “to be heard by the Supreme Court of the United States, it helps if you have an important legal footing on which to stand — feeling really, really bad about something isn’t sufficient.”
[h=6]Bebeto Matthews/Associated Press[/h]Chet Kanojia is the founder of Aereo, a streaming service.
In a filing on Friday, the media companies petitioned the court to determine whether Aereo’s method of sending television signals to paying subscribers from small antenna farms violates decades-old copyright law. Aereo says it does not, but the companies say it does. Lower court rulings on the matter have mostly favored Aereo to date.
“Today’s filing underscores our resolve to see justice done,” one of the petitioners, Fox Television Stations, said Friday. “Make no mistake, Aereo is stealing our broadcast signal.”
The other petitioners included divisions of the Walt Disney Company, which owns ABC; Comcast, which owns NBC and Telemundo; CBS, PBS and Univision. All of the companies own local television stations that transmit over the public airwaves and normally compete with one another; by joining together they are presenting a united front against what they say is Aereo’s illegal disruption of their business model. They are aware that they face long odds: the court grants about 1 percent of all petitions filed.
Aereo declined to comment on the petition on Friday, other than to say, “We will respond, as appropriate, in due course.”
The deepening dispute has the potential to affect every American television viewer. The broadcasters have said they will go to extreme lengths to halt Aereo and services like it — even if they have to yank their signals from the public airwaves.
Aereo, which is backed by the former Fox network co-founder Barry Diller, exploits what some analysts have called a loophole in copyright law involving public performances. It picks up the signals of local television stations using arrays of antennas in each city it operates in, like New York, Atlanta and Salt Lake City. Then it streams the signals to subscribers who pay $8 a month. In effect Aereo makes it easy to turn smartphones and tablet computers into personalized TV sets — something that the broadcasters haven’t moved swiftly to do.
Because it assigns individual antennas to every viewer, Aereo says its Internet streams are not public performances. Thanks to the antennas, it says, it has no obligation to pay what are known as retransmission consent fees to local stations. Those fees, routinely paid by cable and satellite providers, have become an important supplement to advertising revenue for local stations (like WNBC in New York) and their network partners (like NBC).
What the station owners fear more than Aereo is the possibility that cable and satellite providers, emboldened by Aereo, will set up their own antenna arrays to avoid paying retransmission fees. In their petition on Friday, the broadcasters said that “certain cable and satellite companies” have threatened to use a Second Circuit court ruling in favor of Aereo “as a road map for re-engineering their own delivery systems so they too can retransmit broadcast signals without obtaining the broadcasters’ permission.”
Aereo was upheld by a three-judge panel of the Court of Appeals for the Second Circuit last spring, although in a dissent one of the judges likened the streaming service to “a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act.” The Second Circuit has jurisdiction over New York, Connecticut and Vermont.
Aereo won in court again on Thursday, this time in Boston, where a district court rejected a local station’s request for an injunction against the service.
The broadcasters have had more luck against an Aereo copycat called FilmOn X in the Ninth Circuit, which has jurisdiction over much of the western United States. A district court in California issued an injunction late last year, and FilmOn has appealed. Paul Gallant, a Guggenheim Partners analyst, said the Ninth Circuit could rule any time before the end of the year.
“Should the Ninth Circuit create a circuit split in the coming months by ruling in favor of broadcasters, the odds of Supreme Court review clearly would rise,” Mr. Gallant wrote in an analyst note earlier this week.
There was skepticism in some quarters on Friday, partly because the broadcasters were perceived to be resisting a form of technological convenience — streaming TV on Internet-connected devices — that consumers have shown they want.
The broadcasters “feel they have somehow been uniquely violated,” said James McQuivey of Forrester Research. But “to be heard by the Supreme Court of the United States, it helps if you have an important legal footing on which to stand — feeling really, really bad about something isn’t sufficient.”