Aereo's plan C for cable

Aereo's plan C for cable

Summary: Aereo has concocted a new legal plan to try to bring its internet TV service back to life.

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When the Supreme Court ruled that Aereo's over-the-air (OTA) TV over the internet service was illegal, everyone assumed that the company's plan B was to try to make a deal with the media companies. It turns out Aereo has a plan C.

Aereo-Trancoder
Aereo may yet come back to stream local television stations to its internet cord-cutting customers.

In an appeal from its law firm Debevoise & Plimpton, Aereo argues that it's a cable company and as such Section 111 of Copyright Act of 1976 grants it the "compulsory licenses" needed to retransmit over-the-air (OTA) television content.

The logic is that since the Supreme Court in its decision stated that Aereo "is for all practical purposes a traditional cable system," they have the right to be treated as a cable company.

The broadcasters aren't having any part of this shift in defense: "Aereo never before pled (much less litigated) Section 111 [of the Copyright Act] as an affirmative defense. 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 Section 111 given its prior statements to this court and the Supreme Court."

So, while the Aereo service is still off, the legal fight continues in the US Court of Appeals for the Second Circuit. US District Judge Alison Nathan must now decide whether to issue the media companies' preliminary injunction or allow Aereo to return to operating.

If this plan doesn't work, Aereo has another card up its sleeve even if the Court finds they are not entitled to a statutory license"

"The Supreme Court held that Aereo only publicly performs when its technology allows near simultaneous transmission of over-the-air television broadcasts to its users." Therefore, Aereo argues, the "Supreme Court opinion did nothing to prohibit — and indeed reaffirms the vitality of — non-simultaneous playback from copies created by consumers."

Were the Court to opt for this interpretation, Aereo could go back into business as an internet-based, OTA DVR service.

You may be asking yourself, "Wouldn't it be easier for Aereo to just sign a deal with the media companies to pay them the same fees that cable and satellite companies pay to retransmit OTA television shows?" Well, yes, it would be — if the broadcasters were willing to do so.

They're not. There's been no sign that they're willing to sign a contract with Aereo for any price.

Aereo is also deliberately skirting another issue. There are two legal definitions of a cable company. One is the Telecommunications Act of 1996, which requires cable companies to pay retransmission fees to media companies. The other is the Copyright Act, which Aereo is using, does not. 

I give Aereo full points for chutzpah. I am not a lawyer, but I think they've made an interesting point with their Section 111 defense. If the District Court supports this view, Aereo would return to business and I've no doubt that the conflicting laws on what a cable company is, or isn't, will eventually end up in front of the Supreme Court.

Aereo's second argument, to operate an online OTA DVR service, strikes me as having far more merit on the face of it. If the Judge agrees, a modified Aereo service would return. No matter what the Court decides, we should see a decision within the next three months.

So Aereo fans, don't give up yet. This cord-cutter service may yet return thanks to its plan C for cable.

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Topics: Networking, Broadband, Legal

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10 comments
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  • Three Cheers For Aereo

    I wish them the best. Lets see that the cord cutters get a break.
    lloydkuhnle@...
  • Be carefull what you wish for!

    Pay TV implies NO COMMERCIALS! ;-)
    kd5auq
  • Brilliant!

    I applaud their decision.

    If the SC says they are a cable company, then they can retransmit local broadcasts.

    Nice, very nice indeed.

    However, if they opt for DVR only services, wouldn't that mean someone not in the local area would be able to subscribe to their services? I'd really like to be able to watch NY and LA broadcasts.
    THavoc
  • Aereo good plan..

    I have discontinued cable tv. It's been 6 months now, do not miss it by much expect for some major sporting events like world cup soccer/espn3; as I have a-prime, netflix and youtube at my finger tips.

    If Aereo provides tv shows through internet and keep to about $10 a month I'd go for it.

    I had cable tv and was sick of it as they used to repeat the movies and shows over and over again at premium price.

    Aereo go for it. Do not give up.
    ug123
  • Shooting themselves

    The networks are just shooting themselves in the foot with this. The cord cutter movement is gaining steam, and people are finding other sources of entertainment as the networks make it harder and harder for people to watch their content without paying $70.00 a month for the TV portion of basic cable. There was a time when you got all your entertainment over the air for free. You just had to endure a few commercials. Then cable rolled in and you got 100 channels you mostly never watched, and a cable bill that kept increasing year over year. Then, to add insult to injury, networks and cable companies have begun adding prominent, huge watermarks to the movies they show, to encourage consumers not to tape them. Yet all this does is make the movies unwatchable to begin with. And now Hulu+ has begun adding these same watermarks.

    I'm basically done with these bozos. Spitting in my face and telling me its rain. Greed is going to kill the big media companies. I look forward to a new model of independent, internet based shows. It won't be long at the rate the networks and cable companies a torpedoing their own services by over-pricing and bastardizing their wares.
    dsf3g
    • dsf3g: "the networks"

      There are good networks and there are bad networks.

      I just finished watching the 2014 World Cup yesterday via OTA broadcasts from Univision. Pretty much, the whole thing. In the latter part of Stage 1, when there were 4 games played per day (2 games simultaneously), UniMas also carried the games OTA allowing viewers to choose.

      This was not overpriced. All that was required of me was to watch commercials (which, mostly, were pretty good) before the game, if I tuned in a little early. and during half-time.

      Compare this to ESPN broadcasts via ABC OTA. There were few games aired. I didn't bother. ESPN and ABC are the worst.
      Rabid Howler Monkey
  • An Opportunity Just Waiting for Someone to Exploit

    It doesn't take a lot of imagination to see that cable networks could strike a mutually beneficial arrangement with Aereo (or a firm of similar design.) They could offer inexpensive a la carte programming to disaffected package subscribers giving serious consideration to "cutting the cable." (This would protect existing cable revenue at the margin.) It would also be attractive to basic subscribers who don't find enough value in existing premium bundles to merit upgrading their subscriptions. (This would add new cable revenue at the margin.) And by NOT offering a la carte choices under their OWN programming menu, the cable networks would lessen the likelihood of cannibalizing their existing subscription revenue.

    Such an arrangement would be easier to achieve (and potentially more profitable to both sides of the deal) if it included an impulse-driven micropayments system.

    Striking a deal like this would require the participants on each side have the gumption to swallow their pride and meet in the middle. But wouldn't that be what they call a "win-win" deal???
    heuristic
  • Loophole in Telecommunications Act of 1996?

    If you look at the Telecommunications Act of 1996, I think all its regulations are for a "Multichannel Video Programming Distributor" (MVPD). What if Aereo was to split itself into multiple companies, each of which only broadcasts one channel? That would exempt it from the 1996 Act, including retransmission fees. I don't know if it would get it past the copyright implications of the recent Aereo decision by the Supreme Court.

    The Act assumed nobody would build anything like a dedicated (and expensive) cable system without using it to send multiple channels to customers. They weren't thinking about a company using the public internet and how little it costs to send one channel at a time.
    wilback
    • Even one channel may violate Aereo decision

      I would add that Fox is now using the Aereo decision to ban Slingbox technology (http://www.theguardian.com/media/2014/jun/26/fox-aereo-ruling-against-dish-streaming ), so maybe even transmitting one channel is ruled a copyright violation. But for the courts to rule that, there would probably be a large public outcry.
      wilback
  • Back to the Future?

    Ironically, the cable companies originally BEGAN as the analog-era equivalent of Aereo. Long before "pay TV" or "cable only" channels, cable companies began as a means of allowing TV viewers to pick up stations at "fringe" distances that would otherwise be too noisy to view, or too weak to receive at all, and allowing viewers unable to erect outside antennas for various reasons (e.g. expense or restrictions of the landlord or homeowner association) to receive even local stations adequately. In some cities the only services OTHER than amplifying broadcast signals provided by cable companies were low budget ones, such as a camera panning across various weather gauges and a clock, with the audio of a local weather or airport radio.

    And in those days, the broadcast TV stations did not even THINK of requiring these original cable providers to pay fees, because they automatically received a benefit from the cable companies "stealing" their signals: VIEWERS THEY WOULD NOT OTHERWISE REACH, allowing higher advertising revenues. Apparently, as the TV audience made the transition from primarily over the air to primarily by cable, and "superstations" came along that were carried nationwide by cable companies, they came to expect to be paid for assistance in reaching a larger audience.
    jallan32