Aereo, the digital company that transmits local television signals to consumers via the Internet, said it will not oppose the efforts of broadcasters to have the Supreme Court hear their legal arguments against the start-up service.
"We want this resolved on the merits rather than a wasteful war of attrition," said Aereo Chief Executive Chet Kanojia in a statement.
CBS, NBC, ABC and Fox asked the Supreme Court in October to over turn a 2-1 decision made earlier this year by the U.S. Court of Appeals for the Second Circuit in New York, which found that Aereo's transmissions and recordings of broadcast content are not "public performances" of copyrighted material.
Broadcasters fear that Aereo, which does not pay them for their content, could grow in popularity and threaten distribution fees it gets from pay-TV distributors including cable and satellite companies.
In its Supreme Court filing, broadcasters said the Second Circuit decision "threatens to upend" the television industry by "blessing a business model that retransmits 'live TV' to paying customers without obtaining any authorization or paying a penny to copyright owners."
Aereo, which is available in nine cities including New York, Boston and Detroit, charges between $8 and $12 a month for its service, which includes a small antenna to receive signals and access to a cloud-based digital video recorder that can hold up to 60 hours of programming.
While consumers can purchase an antenna to receive over-the-air television signals, broadcasters argue that copyright law "has been mindful of the potential for third parties to exploit this arrangement by profiting off of the 'retransmission' of broadcast programming -- i.e., by capturing these free broadcasts and retransmitting them to the public for a fee, without the approval of or compensation to those responsible for making these broadcasts available to the public."
Aereo's Kanojia countered in his statement that broadcasters are "trying to deny consumers the ability to use a more modern antenna and DVR by trying to prevent a consumer's access to these technologies via the cloud."
Much of the media industry is watching the battle closely. Pay-TV distributors, who now shell out substantial fees to transmit broadcast signals to their subscribers, could use an Aereo win as grounds to wage their own fight against the so-called retransmission consent rules.
It’s a complex issue for some cable operators: Cablevision Systems Corp. on Thursday released its own white paper saying Aereo violated copyright laws, but has also taken issue with the argument broadcasters made in their Supreme Court filing, charging that it is a "willful attempt to stifle innovation." Cablevision is concerned about protecting cloud-based DVR services, which also come under attack in the petition filed by broadcasters.
“The broadcasters’ overreaching copyright arguments would, if accepted, cause grave harm to consumers, cloud-based technology and future innovation," Cablevision said. "In a case about Aereo, the broadcasters go well beyond Aereo and attack the legal underpinning of all cloud-based services, everything from the Apple iCloud to Cablevision's own remote storage DVR service. In short, the broadcasters are asking the Court to throw the baby out with the bathwater – a move that could cripple cloud-based innovation in the U.S.”
The Supreme Court has not said if it will hear the Aereo case. If it refuses, the broadcasters would likely continue the fight in the lower courts and then proceed to the Supreme Court if necessary.
Follow Joe Flint on Twitter @JBFlint.
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