Broadband services

Aereo Fight Heats Up in DC

The clamorous legal fight over Aereo's future is reaching a new crescendo in Washington, D.C., with more cable companies joining the battle and Aereo seeking the Supreme Court's help in resolving the fight.

Aereo Inc. , a video streaming startup backed by former US broadcasting mogul Barry Diller, uses dime-sized antennas on rooftops to collect local TV station signals before streaming them over the Internet to subscribers for a monthly fee. The company, which just expanded to its 10th major market last week, has enraged the US broadcast industry because it refuses to pay retransmission fees for the broadcast programming, unlike cable companies, telcos, and satellite TV providers. (See Aereo Heads to Charm City.)

With all four major US broadcast networks and several other big broadcasters striving to overturn a Second Circuit Court of Appeals and two lower federal court decisions upholding Aereo's service by taking the case to the Supreme Court, Cablevision Systems Corp. (NYSE: CVC) has waded deeper into the morass. In a white paper issued Thursday, the large MSO agrees with the broadcasters that Aereo is violating US copyright law but blasts what it calls the broadcasters' "radical interpretation of copyright law." (See Aereo Headed for Supreme Court?)

Cablevision attacks the broadcasters for gross overreach in their recent petition to the Supreme Court asking it to review the controversial case. The MSO argues that the broadcasters are attempting to use the case to put the kibosh on all cloud-based services, including Cablevision's own remote storage DVR (RS-DVR) service), which the Supreme Court upheld in another big legal fight several years ago.

"In a case about Aereo, the broadcasters go well beyond Aereo and attack the legal underpinning of all cloud-based services, everything from the Apple iCloud to Cablevision's own remote storage DVR service," the white paper says. "In short, the broadcasters are asking the Court to throw the baby out with the bathwater -- a move that could cripple cloud-based innovation in the US."

On the same day that it released the white paper slamming the broadcasters' petition, Cablevision picked up a new ally in fellow MSO Charter Communications Inc. Charter, which is headed by former Cablevision senior executive Tom Rutledge, issued its own, quieter statement Thursday backing Cablevision's position.

"Without getting into the legal merits of the Aereo case itself, we fully support Cablevision's position regarding remote storage DVR and agree that allowing the broadcasters to use the Aereo case to overturn the remote DVR case would be inappropriate and unnecessary," Charter said. "The remote DVR precedent established in the 2nd Circuit should stand."

Charter's entry into the legal fight is notable not just because of Rutledge's recent career arc. Under Rutledge's leadership, Charter has also started pursuing cloud-based video services aggressively, although it hasn't rolled out a cloud-based DVR service like Cablevision's RS-DVR product yet.

In the meantime, Aereo continues to stoke the fire of controversy. In its latest legal comments, the video streaming upstart actually sides with the broadcasters in urging the Supreme Court to take up the case. Although it disputes the claims of broadcasters and Cablevision that its service violates copyright law, the company wants the High Court to settle the matter once and for all.

"While the law is clear and the Second Circuit Court of Appeals and two different federal courts have ruled in favor of Aereo, broadcasters appear determined to keep litigating the same issues against Aereo in every jurisdiction that we enter," said Aereo CEO & Founder Chet Kanojia in a blog on the company's website. "We want this resolved on the merits rather than through a wasteful war of attrition."

It's now up to the Supreme Court to decide whether to take the Aereo case. That decision could be made as early as next month.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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