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.
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.