The major US broadcast networks are seeking to prove that Aereo is no Cablevision.
In a petition to the Supreme Court late last week, ABC Inc. , CBS Corp. (NYSE: CBS), NBC Universal , and Fox Broadcasting Co. have asked for a ruling that declares Aereo Inc. in violation of copyright law. While the US Second Circuit Court in April agreed with Aereo's argument that it, like Cablevision Systems Corp. (NYSE: CVC), delivers individualized and private performances of network content, broadcasters contend that the transmission of thousands of simultaneous streams is in fact a public performance and therefore illegal without payment of retransmission fees.
The Second Circuit Court's decision last spring was based on an earlier US Supreme Court ruling that found in favor of Cablevision and its remote storage digital video recording (RS-DVR) service. In that landmark 2008 case, the RS-DVR service was deemed legal because subscribers are each given their own copy of a recording that is saved on the cable company's network. Similarly, Aereo, a Web video service backed by former broadcasting mogul Barry Diller, uses an individually assigned antenna for each of its subscribers and delivers custom video streams over the Internet. (See Aereo: Suited Up to Disrupt Pay TV.)
Broadcast networks, however, state in their petition that the Cablevision ruling shouldn't protect Aereo. They claim the company's technology is a "Rube Goldberg-like contrivance" designed to "take advantage of [the] perceived loophole in the law."
Along with the nation's top four broadcast networks, Univision, Telemundo, and PBS also signed the petition to the Supreme Court, as did local broadcast stations WNJU-TV, WNET-TV, and WPIX-TV.
The Aereo case could have major implications for free-to-air networks that now generate a significant portion of their revenue from content licensing fees. SNL Kagan predicts network retransmission fees will top $6 billion by 2018. If Aereo's streaming solution is granted legal status, that revenue could disappear. (See 'Free' TV Model Under Threat.)
Meanwhile, Cablevision itself is less than pleased with the broadcasters' court plea. The cable company fears that a ruling against Aereo could also hurt its own RS-DVR service and other cloud-based TV offerings. As reported by several news outlets, Cablevision said in a statement that "if Aereo ends up prevailing, it will serve the broadcasters right."
But Cablevision also disputes the notion that its RS-DVR case was comparable to Aereo's. In its own legal brief last week, the MSO reportedly argued that its case was different because, unlike Aero, it "pays statutory licensing and retransmission content fees for the content it retransmits."
— Mari Silbey, special to Light Reading Cable