Aereo's online TV service faces off against broadcast networks

Last month, the Supreme Court ruled that TV streaming service Aereo was in violation of the Copyright Act, leaving the company dead in the water. But even if things had gone differently, paperwork from the US Copyright Office suggests that the startup was already in trouble. Recode reports that Aereo had 77,596 subscribers at the end of the 2013. 27,000 of its users came from the New York City area, while Boston and the Atlanta area hosted 12,000 and 10,000 subscribers, respectively. With established brands like Netflix and Hulu already providing millions of users with premium content, it's small wonder that Aereo had difficulties breaking into the market.

It may not be curtains for internet television broadcasting company Aereo, which shut down last month following a ruling by the US Supreme Court that it violated the Copyright Act. In a new court filing today, the company says it believes it can operate once again, and within the confines of the Supreme Court decision by existing legally as a cable system instead of an equipment provider. Under current law, that would protect any transmissions it's picking up from being prohibited, the company wrote in a joint letter to US District Judge Alison Nathan.

Last week saw the Supreme Court, in a 6-3 ruling, effectively wipe Aereo off the map by making the company's streaming service illegal. The decision had swift ramifications, with the company alerting customers over the weekend that it would suspend its offerings until it worked out next steps with the courts. In a last-ditch effort, CEO Chet Kanojia today sent a letter to customers urging them to notify Congress that they want the decision reversed.

On the heels of its Supreme Court loss, Aereo has announced it will suspend service starting today at 11:30am, Eastern Standard Time. CEO Chet Kanojia announced the suspension in a letter to customers this morning, saying the service would be temporarily paused as the company consults with the court on possible next steps. All users will also receive a refund for their last paid month of service.

The broadcast industry can breathe again: Aereo — the startup that streamed broadcast TV over the internet for cheap — is dead. Or at least, the incarnation of Aereo that wasn’t paying copyright fees is dead, thanks to a Supreme Court ruling this morning. So what happens now?

A decision in favor of Aereo would have changed things quite a bit for the television industry, but today’s ruling means back to business as usual. While some have raised fears that the opinion will impact cloud computing services, the court intended for the ruling to apply narrowly to Aereo.

The Supreme Court struck a dramatic blow against Aereo today in a ruling that puts the TV streaming service as it currently exists on its deathbed. In a 6–3 ruling, the court found that Aereo's service violates the Copyright Act by playing back recordings of broadcasters' TV shows — even though it legally captures those shows over the air and obtains individual copies for each viewer. Aereo had argued that it was merely providing technology that its subscribers were renting in order to watch TV, positing that the viewers were responsible for playing back those recordings.

"Insofar as there are differences, those differences concern not the nature of the service that Aereo provides so much as the technological manner in which it provides the service," the ruling reads. "We conclude that those differences are not adequate to place Aereo’s activities outside the scope of the [Copyright] Act."

The Supreme Court heard arguments today for and against Aereo, the startup that streams broadcast television to subscribers over the internet without paying copyright fees to broadcast networks.

The court didn't give many indications of which way it will rule, but the questions centered around a few themes: the impact of the ruling on cloud computing, whether Aereo is transmitting content or merely providing equipment, and whether the company's antenna farm is more than a sleight of hand to skirt copyright law.

Aereo, a startup that streams broadcast television over the internet, is headed to the Supreme Court tomorrow just two years after its debut, and stakeholders across the internet and television industries are watching closely.

The case is arguably the most important to hit the television industry since the landmark ruling over Sony’s Betamax format in 1984, which legalized home recordings. It will determine to some degree how broadcast television will be offered online in the future, and could restrict cloud storage services like Dropbox and Google Music as well.

Major US broadcasters have found an ally in their case against Aereo, the streaming television service that uses thousands of micro antennas to pull in free over-the-air signals. Deadline reports that the US Supreme Court has granted a motion from the Deputy Solicitor General to appear during oral arguments on April 22nd as an amicus curiae in support of broadcaster's claims that Aereo infringes their copyrights.

The Obama Administration earlier requested permission to argue its perspective on the case before the justices on grounds that the decision will make important decisions about "the scope of the public-performance right in the context of novel technologies for transmitting and viewing copyrighted audiovisual works using the internet." The White House made clear in an amicus brief that it believes Aereo should have to pay the same retransmission fees to networks like CBS, ABC, NBC, and FOX as cable and satellite providers. The Deputy Solicitor General will now have ten minutes out of the hour-long oral arguments to present the government's position on the matter.

Aereo is trying to win over public support ahead of its big battle with broadcasters in the Supreme Court next week. The service, which allows customers to stream broadcast TV on demand, has launched a website called Protect My Antenna to explain how Aereo works and what challenges it's facing in the court. Aereo CEO Chet Kanojia also sat down for a lengthy interview with Katie Couric, which includes with a lengthy explainer on how Aereo works and why it believes those methods to be legal too.

The court battle, which has been brought by a consortium of broadcasters including Disney, NBC, Fox, and CBS, revolves around whether Aereo should be paying fees for recording freely broadcast TV shows on the behalf of its customers and then streaming those recordings to their specific computers, phones, and tablets. In most situations, companies have to pay retransmission fees for taking broadcasters' content and making it available to their customers, but because Aereo's antennas capture unique copies for every user, it argues that it's simply offering infrastructure that allows viewers to watch and make copies of broadcasts in ways that they're already legally allowed to do.

Aereo has some formidable new opposition in the courts. According to Deadline, the White House has recommended that the Supreme Court rule against Aereo when broadcasters bring its service to trial this April. The administration made the recommendation in an amicus brief filed today, which argues that Aereo's use of discrete antennas to record broadcast television for its customers does not change the fact that it is later retransmitting those recordings to the public. "Like its competitors, [Aereo] therefore must obtain licenses to perform the copyrighted content on which its business relies," reads the brief.

Broadcasters have brought Aereo to court over its refusal to pay retransmission fees on copyrighted content — a fee that Aereo says should not apply to it. Rather than licensing content and transmitting it out to a number of customers, Aereo captures the content through an individual antenna for each customer and will only allow its customers to control and interact with their own specific stream. It offers the service for a monthly fee, and as an obvious threat to broadcasters, they've quickly brought Aereo to court.

Internet television broadcasting company Aereo hit a legal road bump today after a Utah judge granted a temporary injunction to bar the service in eight US states. On that list are Colorado, Kansas, Oklahoma, New Mexico, Utah, and Wyoming, along with some of Idaho and Montana. However the decision mainly affects Aereo in Salt Lake City and Denver, cities where the company already provides service.

The Supreme Court announced today it will hear the arguments between Aereo and television networks Walt Disney, Fox, ABC, NBC, and others on April 22nd, according to Deadline. This date comes just one month after the court agreed to hear an appeal from the networks that claim Aereo's TV streaming service violates copyright law by retransmitting signals without paying the fees that cable and satellite providers pay.

Broadcasters want the Supreme Court to specifically review a decision made on April 1st, 2013, by the US Court of Appeals in New York that rejected their request for a preliminary injunction against Aereo. This hearing will likely not be the final battle Aereo will fight against networks, but as CEO Chet Kanojia has said in the past, the company is ready and willing to go to court believing its antenna technology system is legal.

Last year, the country's largest broadcasters petitioned the Supreme Court to rule on Aereo, a service that streams broadcast TV over the internet using thousands of mini-antennas. Now, the Supreme Court is saying that it will hear an appeal from networks including Walt Disney, Fox, ABC, NBC Universal, and CBS. Dana McClintock from CBS corporate communications tweeted a statement, saying that "we are pleased that our case will be heard and we look forward to having our day in court."

Ever since it launched, Aereo has been the subject of a complex legal battle — networks have sued Aereo in many of the places it launched, and the company has counter-sued in some cases. The main complaint from the networks is that Aereo is violating copyright law be retransmitting signals without paying the same retransmission fees that cable and satellite providers pay. Aereo has tried to get around that by installing an antenna for every single customer it has, making the argument that it is essentially operating as an internet antenna for the content that is already free over the airwaves.

Aereo wants to take on broadcasters in the Supreme Court. In a brief filed today, Aereo urged the court to hear a case brought by broadcasters questioning its legality. "We are unwavering in our belief that Aereo’s technology falls squarely within the law," Aereo CEO Chet Kanojia says in a statement. Since launching last year, Aereo has been seen as a thorn in the side of broadcasters: it offers consumers an option to stream broadcast TV online through a personal stream, something that traditional broadcasters have argued infringes on their content rights. Aereo has been to court several times and in several different markets to address the matter, and it's largely come out the winner so far.

But over the last several months, a group of broadcasters has begun escalating the matter by petitioning the Supreme Court to hear a case against Aereo. According to Deadline, the group includes Disney, Fox, NBCUniversal, CBS, and Univision — among others — and it seems that they're interested in quickly finding out whether Aereo is legal or not, regardless of the conclusion. Stopping the service soon might maintain the status quo, while finding out that Aereo is legal could potentially prompt broadcasters to address it competitively. Aereo similarly appears eager to get these lawsuits over with. "Broadcasters appear determined to keep litigating the same issues against Aereo in every jurisdiction that we enter," Kanojia says. "We want this resolved on the merits rather than through a wasteful war of attrition."

Aereo CEO Chet Kanojia.

The NFL and MLB are pushing for the Supreme Court to hear a challenge to Aereo, the service that allows viewers to stream privately broadcast television feeds online. In an amicus brief, the leagues argue that Aereo is designed solely to avoid paying copyright holders for retransmission fees. Those lost fees, they write, could force all copyright holders to move to paid cable networks like ESPN or TNT, "where Aereo-like services cannot hijack and exploit their programming without authorization."

TV network executives like CBS' Les Moonves have warned that they would take their networks cable-only if streaming services like Aereo succeed in court, and it looks like they'll have plenty of motivation: Bloomberg reports that top cable providers have been considering adopting Aereo-style services on their own to save money. DirecTV, Charter Communications, and Time Warner Cable are among those said to be contemplating the move, with Time Warner having looked at the option of simply buying Aereo outright.

The issue, of course, is money. Services like Aereo work by capturing broadcast television signals and then transmitting them directly to users over the internet. By using one antenna per customer, the legal argument goes, the companies are not actually copying anything — and therefore aren't breaking copyright laws. The networks have disagreed, filing lawsuit upon lawsuit, and recently asked the Supreme Court itself to step in.

Aereo CEO Chet Kanojia.

The country's largest TV broadcasters have petitioned the Supreme Court to rule on the legality of Aereo, the web TV service that employs thousands of mini rabbit ears to help users access live, over-the-air broadcasters, according to CNET.

Aereo will be able to continue operating as usual in Boston as it prevails in yet another court ruling that could have had it shutting down services. District Court Judge Nathaniel Gorton today denied a request for a preliminary injunction against Aereo, which was put forth by the local broadcaster Hearst. An injunction would have required that Aereo stop streaming local-only content from Heart's Boston news channel, WCVB, until the court made a final decision on the case. In his ruling, Gorton notes that Hearst was unable to prove that it would be irreparably harmed during this period of time, and thus denied the request.

"Today’s victory belongs to the consumer," Aereo founder Chet Kanojia says in a statement. "Today’s decision makes clear that that there is no reason that consumers should be limited to 1950s technology to access over-the-air broadcast television."

The country's largest TV broadcasters want a final showdown with Aereo, sooner rather than later. Citing anonymous sources, Variety reported this evening that sometime in the next week the programmers will petition the Supreme Court to review lower court rulings regarding the legality of Aereo's web TV service.

Aereo does all this without paying a penny to retransmit the broadcasters material. The company argues that over-the-air signals are freely available to people with TV antennas, and Aereo is really just an antenna rental service. A federal district court and appellate panel in New York each sided with Aereo. But the broadcasters also sued FilmOn and prevailed against that company in district courts in Washington DC and California. So, when these types of conflicts occur, the Supreme Court is typically called on to settle the matter.

Aereo is aggressively expanding its streaming broadcast TV service — a setback in Chicago notwithstanding — but so too are angry broadcasters expanding the reach of their lawsuits in an attempt to shut down Aereo's business. The latest battleground is Utah, where Fox, CBS, and local TV affiliates have just filed a lawsuit in district court.

As before, the broadcasters claim that Aereo is retransmitting their valuable content without their permission, and without paying a fee. "No amount of technological gimmickry by Aereo changes the fundamental principle of copyright law that those who wish to retransmit copyrighted broadcasts may do so only with the copyright owners' authority," the broadcasters charge.

Some hostile, accusatory, and cryptic messages were sent Sunday afternoon from the Twitter account of Alki David, the billionaire owner of FilmOn web TV service. The tweets were directed at Aereo CEO Chet Kanojia, and early Monday morning David confirmed by email that he was the one who sent them.

In a response to an interview request made by The Verge, David made it clear that he believes Kanojia was responsible for a recent Denial of Service attack that was launched against FilmOn's website. "Yes. FIlmOn has been under attack for the past two weeks from a ddos at times over 30 Gig per second," David wrote. "We have information which leads us to believe that it is sponsored by Kanojia. The attacks continue and at great expense we have had to build a huge layered firewall. Makes me really mad."

Aereo CEO Chet Kanojia

Aereo, FilmOn, and the major TV broadcasters are in a seesaw legal contest in courtrooms around the country, but in Boston, Aereo appears to have the upper hand. District Judge Nathaniel Gorton, who is overseeing the copyright complaint brought against Aereo by Hearst TV Stations, said yesterday that he's "inclined at this point" to rule in favor of the web TV service.