Television Antenna - WTVR (2235691874)

Today’s TV antenna — soon to be a relic?

Barry Diller-backed startup Aereo is challenging the “big boys” of broadcast television, and so far, it has been winning. Here’s how Aereo describes its service:

Watch live TV online. Save shows for later. No cable required. With Aereo, you can watch real, live TV through a tiny remote antenna you control over the Internet — from home or anywhere in your home coverage area.

Aereo is a system that allows customers to access live broadcast over-the-air television (no cable or satellite channels) via their computers or other devices, with additional DVR features such as rewind or pause. Aereo doesn’t require rabbit ears or a rooftop antenna — customers rent (for about $8 – $12 per month) a dime-sized antenna in a vast array of TV antennas at an Aereo-owned location that pick up over-the-air broadcast signals and offer a very high speed Internet connection to a DVR-type device in the “cloud.” A nifty diagram of how it works is here.  Customers can launch Aereo on a smart phone, tablet, computer, or (with AppleTV or a Roku) watch on an existing TV set. The service is available in 11 United States broadcast markets, and the company plans to add more.

TV networks rake in enormous amounts of revenue from the carriage fees that cable and satellite companies pay to retransmit local broadcast channels. It is a multibillion dollar business, and broadcasters argue that Aereo is stealing TV signals without paying. Aereo says the tiny antennas it uses to capture signals before relaying them over the Internet should be treated no differently than antennas people legally use on their rooftops to pull in broadcast TV signals for free. The difference is only the length of the “cable” from the antenna to the TV device.

In March 2012 broadcasters including PBS, Fox, and Univision, filed two separate lawsuits against Aereo (collectively representing most of the major media outlets in New York City). They claimed that Aereo infringes on broadcasters’ copyrights. Broadcasters sought an injunction to prevent Aereo from releasing its product on the market, and sought monetary damages, but Aereo won at both the district court and appeals court levels in that suit.

In April 2013, the U.S. Second Circuit Court of Appeals rejected an appeal from TV networks by a 2-1 vote, concluding that Aereo’s system does not infringe the broadcaster’s copyrights. The broadcasters also argued that Aereo lacked the proper license to operate, but the court ruled that the license doesn’t matter, because Aereo customers are streaming their own unique copies to themselves. The decision cleared major legal hurdles for Aereo, forcing broadcast networks to win an appeal either at the full Second Circuit, or at the Supreme Court if they want to shut the streaming service down.

Last October Aereo won an important ruling in a Massachusetts federal court, when a U.S. District Judge denied an injunction request made by Hearst Station, owner of ABC affiliate WCVB-TV. The broadcaster had argued in its copyright lawsuit that Aereo’s system of capturing over-the-air TV signals and delivering them to subscribers’ digital devices is a violation of public performance rights and amounts to delivering copyrighted works. Also in October, Aereo was sued in Utah. Fox, CBS, and local TV affiliates have just filed a lawsuit in district court, claiming that Aereo is retransmitting their valuable content without their permission, and without paying a fee.

Aereo argues that,

consumers are legally entitled to access broadcast television via an antenna and they are entitled to record television content for their personal use. Innovations in technology over time, from digital signals to Digital Video Recorders (‘DVRs’), have made access to television easier and better for consumers. Aereo provides technology that enables consumers to use their cloud DVR and their remote antenna to record and watch the broadcast television signal to which they are entitled anywhere they are, whether on a phone, a tablet, a television or a laptop.

Aereo’s CEO believes that the TV networks will go to Congress if necessary, and both CBS and News Corp have threatened to drop broadcast TV altogether if Aereo isn’t stopped. Even if the chances of that seem slim, it shows how much of a threat the networks believe Aereo poses to their lucrative revenue stream.

A Utah judge on Wednesday issued a preliminary injunction stopping Aereo from operating in several Western states until the U.S. Supreme Court takes up a related case in April:

The U.S. Supreme Court, which will begin hearing arguments in the Aereo case on April 22, will aim to resolve different rulings in different districts. A ruling in the 2nd District Court of Appeals, which covers New York, Connecticut and Vermont, that said Aereo was not violating copyrights and allowed it to continue operating. [U.S. District Judge Dale] Kimball’s ruling applies to the jurisdiction of the 10th District Court of Appeals, which covers Oklahoma, Kansas, New Mexico, Colorado, Wyoming, Utah and the parts of Yellowstone National Park that extend into Montana and Idaho.

In a statement, Aereo CEO Chet Kanojia said,

…Aereo is extremely disappointed that the district court in Utah has chosen to take a different path than every other court that has reviewed the Aereo technology. Consumers have a fundamental right to watch over the air broadcast television via an antenna and to record copies for their personal use. The Copyright Act provides no justification to curtail that right simply because the consumer is using modern, remotely located equipment.

The broadcast TV landscape may continue to change in the coming weeks if Aereo wins the suits in these courts or at the Supreme Court. Stay tuned!

Photo: Jim from Richmond, VA via Wikimedia Commons