Light Reading

Is This Aereo's Back-Up Plan?

Mari Silbey

If something looks like a duck and quacks like a duck, then you have to treat it like a duck.

That's the essential argument Aereo is making in the wake of the US Supreme Court's ruling in favor of broadcasters two weeks ago. In a 6-3 decision, the Supreme Court held that Aereo "is for all practical purposes a traditional cable system." Given that pronouncement, Aereo now says it's entitled to a copyright statutory license just like its cable company fellows. A license would enable Aereo to negotiate retransmission fees with broadcasters in the same way that other cable operators do today. (See Supreme Court Halts Aereo's Flight.)

Not surprisingly, broadcasters aren't buying Aereo's argument, which was made in a letter filed with the lower court handling the broadcast companies' injunction request. They point out that in the Supreme Court case, Aereo was adamant about not being classified as a cable operator. However, the streaming company now says the situation has changed.

"Under the Second Circuit's precedents, Aereo was a provider of technology and equipment with respect to the near-live transmission at issue in the preliminary injunction appeal. After the Supreme Court's decision, Aereo is a cable system with respect to those transmissions."

Aereo's lawyers also have another argument in their arsenal. In the filing with the lower court, the lawyers say that even if Aereo isn't granted a statutory license, any injunction against the company should still be limited. They claim that because the Supreme Court only objected to Aereo's system of "near simultaneous" streaming of broadcast TV programs, the company should still be allowed to deliver time-shifted content.

Whether or not Aereo ultimately succeeds on any legal grounds, the company's business is still in jeopardy. As a cable company, Aereo would be subject to the same rising retransmission fees that have threatened the profits of so many other operators. In addition, any negotiations with broadcasters would likely suffer from the bad blood generated through years of legal battles.

Even prominent Aereo investor Barry Diller appeared to throw in the towel after the Supreme Court decision saying, "We did try, but it's over now." (See Aereo Presses Pause… for Good?.)

Aereo CEO Chet Kanojia has remained optimistic, however. He told consumers in a public letter recently that "our journey is far from done."

As the latest court filing shows, the company isn't ready to close its doors yet.

— Mari Silbey, special to Light Reading

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User Rank: Light Sabre
7/11/2014 | 12:10:16 PM
Re: Where can I buy Aereo's dime-sized antennas?
That $100 million will help lower the tax bill for IAC. The company's portfolio is filled with initiatives that are likely to have short shelf lives, as you suggest.
User Rank: Light Sabre
7/11/2014 | 5:24:02 AM
Re: Where can I buy Aereo's dime-sized antennas?
..and if I may humbly add, trying to save $ 100 Million that IAC has sunk into this will force some rather creative moves to save the franchise.   This is as some other components of IAC seems to be faced with potential challenges.    
User Rank: Light Sabre
7/10/2014 | 1:44:42 PM
Re: Where can I buy Aereo's dime-sized antennas?
nasimson, the Supreme Court ruling on Aereo is ambiguously specific and narrow to Aereo.... The Supreme Court didn't make Slingboxes illegal. It introduced a strange concept of "if it looks like a duck.." legal bar that equated Aereo with a cable broadcaster... So presumably, if you don't ACT like a cable video service, you're not crossing into an infringing business. (but it's not 100% clear, and the "looks like a duck" legal concept will have to be challenged in courts in order for anyone to really predict anything.)
User Rank: Light Sabre
7/10/2014 | 12:11:30 PM
This show is OVER
If Aereo is insane enough to pursue this course, it's another couple of years in legal challenges and lawyer fees, this time without Barry Diller's money.
User Rank: Blogger
7/10/2014 | 9:34:32 AM
Re: Where can I buy Aereo's dime-sized antennas?
Can't blame them for trying to make a new argument, but also seems more like the predictable move of trying to parse the legal language to find a loophole, and less like a new business plan.
User Rank: Light Sabre
7/10/2014 | 7:29:20 AM
Re: Where can I buy Aereo's dime-sized antennas?
@mhh If supreme Court has termed Aeros service illegal, how can the product be legal?
User Rank: Light Sabre
7/10/2014 | 1:24:32 AM
Where can I buy Aereo's dime-sized antennas?
I would like to see Aereo start to sell its equipment to consumers directly -- and offer a more fully functional version of hardware. I don't think Aereo is dead, but its ROI for investors might be a bit different as it pivots to a totally new business model.
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