Updated 7/17/2014 by Ryan Waniata: Aereo’s initial efforts to gain cable system status were thwarted, as the U.S. Copyright Office sent the company a letter Wednesday stating that it would not process its application for a compulsory license to broadcast network TV content. The license in question is the same license that must be obtained by cable companies to carry network feeds. “In the view of the Copyright Office, Internet retransmissions of broadcast television fall outside the scope of the Section 111 license,” the letter stated.
However, the Wall Street Journal reported that the Copyright office did accept Aereo’s application to pay royalty fees for content on a “provisional basis.” Earlier this month, Aereo made its case to be re-classified as a cable operator before the U.S. District Court in New York, in a last ditch effort for legitimacy. According to the letter, the decision as to whether or not the compulsory license will be granted to Aereo will depend upon the lower court’s ruling.
Aereo continues to support its argument by stating that the Supreme Court overruled a previous ruling by a lower court in which a Seattle-based streaming startup called Ivi wasn’t allowed to be classified as a cable system under the rules of the Copyright Act. Aereo also claims that the Supreme Court did not prohibit the use of the cloud-based DVR service that allowed Aereo subscribers the ability to record live programming for consumption at a later time.
Of course, Aereo is also arguing that a stay remain in place rather than the case being dismissed, thus allowing the company to continue operations. Alternatively, the broadcasters want the stay lifted in order to pursue litigation related to collecting monetary damages from the company. Legal representatives of the broadcasters responded to Aereo’s motion today stating “Whatever Aereo may say about its rationale for raising it now, it is astonishing for Aereo to contend the Supreme Court’s decision automatically transformed Aereo into a ‘cable system’ under the law.”
Even if the U.S. District Court in New York considers Aereo’s new claim to be valid, the company will still have to work with the FCC and the U.S. Copyright Office to be classified as a cable operator. Aereo claims that the broadcasters will have to negotiate “in good faith” regarding fees related to the transmission of network content.