State Laws/Franchising

Aereo Flies Into Broadcasters’ Lawsuits

3/05/2012 12:01 AM Eastern

Major broadcasters and TV-station groups
are suing Aereo, which plans to launch a subscription service
this month that would allow users to watch broadcast
signals on their smart
phones, tablets or any Internet-
enabled device.

The pair of separate
lawsuits, filed in U.S. District
Court for the Southern
District of New York,
allege that the Aereo service
— which uses dimesized
antennas to pick
up over-the-air TV signals,
then encodes them
for real-time delivery to
iPhones, iPads and other
devices — violates copyright
laws. The suits ask
the court for an injunction
to block the service,
as well as damages and
court costs.

Aereo’s antennas are
housed in giant arrays in
a Brooklyn, N.Y., location,
where the signals are received,
encoded and sent
for delivery with no need
for a set-top box. The company’s
legal justifi cation:
Each antenna is dedicated
to an individual Aereo
subscriber, so the service
isn’t subject to the same
retransmission-consent
laws as pay TV operators.

“NAB strongly supports today’s legal action against
Aereo,” said National Association of Broadcasters executive
vice president of communications Dennis Wharton.
“Copyright and TV-signal protections promote a robust
local broadcasting system that serves tens of millions of
Americans every day with high-quality news, entertainment,
sports and emergency weather information.”

One of the lawsuits filed in federal court in New York
named the American Broadcasting Cos., Disney Enterprises,
CBS Broadcasting, CBS Studios, NBC Universal Media,
NBC Studios, Universal Network Television, Telemundo
Network Group and WNJU-TV as plaintiffs against Aereo.

A statement from ABC, CBS and NBC issued to Multichannel
News
noted that “this service is based on the
illegal use of our content. Beyond that, we believe the complaint
speaks for itself.”

In the other suit, PBS,
Fox Television Stations,
Univision Television
Group, the Univision Network,
20th Century Fox
Film Corp. and WNET
have joined together as
plaintiffs against Aereo,
also alleging copyright violations
and unlawful competition.
Th e suit also seeks
to block the Aereo service
and seeks damages, attorney
fees and court costs.

Aereo, which has raised
about $25 million from
such backers as Barry
Diller, went public with
plans in mid-February to
launch a $12-per-month
subscription service in
New York on March 14
(“Aereo Tunes Web TV
With Legal Angle,” Feb.
20). The company
eventually hopes to expand
nationwide.

Aereo noted that the
signals for each subscriber
are received on separate
coin-sized antenna.
It then takes those signals,
encodes them and sends
them out over the Internet,
where they can be accessed by iPhones, iPads and other
Internet-connected devices.

Because each subscriber has their own antenna located in
Aereo’s facility, the company claims no copyright violations
occur. Similarly, its digital video recorder service — which
provides up to 40 hours of storage per account — allocates
dedicated storage to each user so as not run afoul of copyright
laws.

At the press conference announcing the service, Aereo
founder and CEO Chet Kanojia admitted the firm expected
legal challenges.

“We understand that there
will be challenges,” he said.
“We are building a transformative
business, and there
will be challenges.”

As reported, the beta version
of the service went live
on Feb. 9; the company declined
to say how many
micro-antennas it has deployed
but put the number
in the thousands. Broadcasters have previously been successful
in blocking Internet-streaming services in court
and they won a major suit last year against ivi TV.

“Aereo has no rights, under any license, statute or case
law, to any of the copyrighted
programming
that is the basis of its subscription-
only Internet
service,” the lawsuit filed
by ABC, CBS, NBC and
others argued.

“Aereo just helps itself
— without permission
and on a round-the-clock
basis — to programs created,
owned and broadcast
by plaintiffs,” the
suit said. “Although other
distributors, including
cable and satellite operators
and telephone companies,
pay to retransmit
the same programming,
Aereo’s business is based on circumventing the carefully
balanced distribution system mandated by Congress. That
is infringement.”


George Winslow is a contributing editor to Broadcasting &
Cable.
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