Aereo’s $12/Month TV-to-Go Likely Illegal

by James Boyajian

New York-based Aereo, a venture funded by a $20.5 million investment from media mogul Barry Diller’s IAC/InterActiveCorp (which owns Ask.com and CitySearch), is offering New Yorkers (and possibly the residents of one hundred other cities) dime-sized antennas that will allow for the streaming of live broadcast television over mobile phones and tablets, and will also allow for cloud based DVR-recording and storage.  See video: “Live Broadcast TV, meet the Internet. Finally.”

With no licensing deals with major networks in place, Aereo shows no intent to compensate the networks or content owners for the retransmissions.  Networks like Walt Disney Co.’s ABC, CBS Corp., Comcast Corp.’s NBCUniversal, and Telemundo are suing to stop the service, as are Fox, Univision, and PBS in a separate suit.  Aereo has filed counter-suits for declaratory relief in these federal cases.  See American Broadcasting Cos. et al v. Aereo Inc, U.S. District Court, Southern District of New York, no. 12-01540; and WNET et al v. Aereo Inc., no. 12-01543.

Aereo claims that it “simply provides to its members the convenience of locating at a remote facility the type of equipment they could otherwise have in use at home.”  On one hand, the tiny antennas are simply picking up the signals of content that broadcasters place into the public airwaves just like traditional TV antennas.  On the other hand, it is likely that encouraging widespread retransmission, reproduction, and distribution of copyrighted works in a broadband-format without proper licensing will raise salient copyright infringement issues.

While the 2008 Cablevision case holding may provide some colorable basis for arguing that Aereo allows each user to watch or DVR their favorite broadcast content (thus deflecting liability to each Aereo user as opposed to Aereo itself), Aereo is not a cable operator that pays statutory retransmission fees to the broadcast networks and is profiting while arguably undermining the profit model of television broadcasters.  As such, these facts are more reminiscent of the recent Zediva holding, where a federal judge ordered the shutting down of a company that streamed live DVDs of films and television shows over the internet.  Though, unlike the company in Zediva, Aereo is not actually streaming the content itself; it is giving its subscribers the technology to catch the content from the public airwaves, stream it on their mobile phones and tablets (arguably analogous to their using antennas on their home television screens), and DVR said content at a third party site as is allowed under Cablevision.  Nevertheless, there is plenty of basis for a federal judge to rule that the unauthorized streaming – reproduction, derivative use, distribution, and/or public performance – is technically an infringement under existing copyright laws.

This would be a good time for Congress to intervene and expand the compulsory licensing system of 17 U.S.C. § 111 to cover non-cable companies like Aereo.  Why should Aereo be treated differently than cable operators who retransmit live broadcast content?  Updating our laws may be the best way to legalize innovators like Aereo while compensating creators for their creative works.

James Boyajian is one of the co-founders of www.StreamIndustry.com, a trade site dedicated to analyzing the convergence of media, communications, and entertainment industries for the public.  James is an intellectual property attorney based in downtown Los Angeles.

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