Analysis: Should Aereo win, next move for broadcasters could be at FCC

Aereo's antennas are the size of a dime.
Aereo’s antennas are the size of a dime.

The Supreme Court is expected to rule later this week or next week on whether Aereo -- the start-up service that streams local TV signals on the Internet via remote antennas -- is legal or violates copyright law.

Launched in 2012 with backing from media mogul Barry Diller, Aereo is available in several major cities across the United States including New York. It offers customers access to a cloud-based digital videorecorder that holds up to 60 hours of content and the service costs $8 to $12 a month.

Aereo does not disclose the number of subscribers it has. Broadcasters charge that they need to be compensated by Aereo, otherwise the company is engaging in copyright theft.

While broadcasters -- including CBS, Fox, ABC and NBC -- are hopeful that the Supreme Court will side with them, if not they won’t be throwing in the towel.


Fox and CBS have made noise about switching their broadcast networks to cable channels. CBS has also suggested creating its own version of Aereo.

But more likely to happen if Aereo prevails in court is that the broadcasters will seek other legal or regulatory roadblocks.

One approach may be to try to force Aereo to comply with the same rules that require cable and satellite operators to have to negotiate with local TV stations in order to carry their signals.

Currently, over-the-top providers are not regulated as multichannel video programming distributors (MVPD). That means they are immune from certain Federal Communication Commission regulations including retransmission consent, which gives local broadcasters the ability to charge a distributor a fee for carrying their signals.

The key difference between an over-the-top service and a traditional MVPD is that the former uses the public Internet to distribute content while the latter uses facilities they own or control.

In 2012, the FCC said it was looking into whether it needed to change what defines an MVPD. However, that proceeding has been idle since then.

The industry is divided about whether OTTs should be regulated as traditional MVPDs. Some distributors, including DirecTV, told the FCC that if an OTT is going to compete with MVPDs, they should be regulated the same way.

The FCC should “establish a level playing field where competitors operate under a core set of common rights, protections and obligations,” DirecTV said.


But others, including NBC parent Comcast Corp., said OTTs should not be viewed as MVPDs. Its rationale was that it is a growing platform that should not be burdened by the regulatory commitments that traditional cable and satellite operators are required to fulfill.

Aereo, which has argued all along that it is an antenna service and not a video distribution platform or subscription TV provider, probably would try to make those same arguments to the FCC.