Detailed by Bloomberg yesterday, the U.S. Supreme Court plans to hear an appeal led by representatives of broadcasters like CBS, ABC and FOX against streaming media company Aereo. The group of broadcasters has been in this legal struggle for nearly two years at this point, but the broadcasters have been trounced by Aereo in the courts nearly every step of the way. The broadcasters have constantly stuck to the claim that the retransmission of network signals without paying retransmission fees is a violation of copyright law.
Aereo claims that paying retransmission fees isn’t necessary since the company installs an antenna that receives free, high definition, over-the-air broadcast signals for every single customer that signs up for the monthly subscription service. Available in multiple major U.S. markets along the East Coast and within the Midwest, customers pay between $8 to $12 a month to access to the signals and receive 20 to 60 hours of DVR space for recording live programming. The most expensive plan also allows users to record two shows at once, similar to a standard two-tuner DVR in a typical cable box.
According to a statement released by Aereo yesterday, company representatives are looking forward to a final resolution to the lawsuit. Specifically, CEO Chet Kanojia said “We look forward to presenting our case to the Supreme Court and we have every confidence that the Court will validate and preserve a consumer’s right to access local over-the-air television with an individual antenna, make a personal recording with a DVR, and watch that recording on a device of their choice.”
Interestingly, a U.S. Supreme Court ruling that’s favorable to Aereo could pave the way for expansion in the western portion of the United States. Up to this point, Aereo has only ventured as far west as Salt Lake City, Utah to expand the service area. This is due to a Ninth Circuit court ruling that ruled against the legality of a service similar to Aereo, basically opposite of the Second Circuit court ruling in New York. The Ninth Circuit ruling covers nine states that include Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington.
At this point, there’s no indication of the timing of the hearing or when the Supreme Court will actually rule on the appeal. However, it’s possible that Aereo will gain a favorable decision since the United States Second Circuit Court of Appeals decided against hearing the broadcaster’s appeal last year.
That being said, representatives of ABC and NBC released a joint statement that read “We are gratified that the Supreme Court has granted our petition to review issues that both sides recognize as significant.” The CBS statement was slightly more incendiary and read “We believe that Aereo’s business model, and similar offerings that operate on the same principle, are built on stealing the creative content of others.”
If the U.S. Supreme Court rules against the broadcasters, it’s possible that each network will consider transitioning exclusively to a cable channel and halt all free over-the-air transmissions. This could be a prudent course of action since DirecTV, Time Warner Cable and Charter Communications are all considering the same legal loophole in order to get away from paying hefty retransmission fees. Hypothetically, these companies could quickly set up similar antenna farms and simply retransmit the free over-the-air signals to all paying subscribers.
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