Saturday, January 11, 2014

SUPREME COURT TO HEAR BROADCASTER´S CASE AGAINST AEREO

The high-stakes legal battle over Aereo, a startup that lets users stream or record live broadcast TV content, has reached the highest court in the land.

By Julianne Pepitone and Brian Stelter CNNMoneyTech
The Supreme Court said Friday that it would hear the major broadcasters' challenge to Aereo, which launched in 2012 to great controversy in the media industry.

At the heart of the controversy is Aereo's lack of authorization from broadcasters -- and whether the startup legally needs that approval.
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Aereo houses thousands of tiny antennas in its data centers, and it assigns each customer a unique antenna. Aereo argues that this method works like the perfectly legal antennas and DVRs that anyone can buy off the shelf.
But broadcasters say that this is an unfair dodge, and they have filed a series of lawsuits to stop Aereo in its tracks. They argue Aereo should have to pay them to retransmit their programming, just like cable and satellite providers do.
The networks originally filed their petition to the Supreme Court in October, asking the high court to hear the case. In December, Aereo said it would not fight that effort, and the company added it wanted the case "resolved on the merits."
Services like Aereo gravely undermine the business model for local broadcasters. If the Supreme Court finds Aereo to be operating legally, as most lower court rulings have so far, then big cable and satellite companies that currently pay hefty retransmission fees might stop paying and set up Aereo-like systems instead.
In fact, some distributors have already held talks with Aereo about possible partnerships.
"We look forward to having our day in court," said CBS (CBSFortune 500), one of the plaintiffs in the case. "We believe that Aereo's business model, and similar offerings that operate on the same principle, are built on stealing the creative content of others."
Aereo, in a statement of its own, sought to frame the case as one about consumer access to innovative technology: "We have every confidence that the Court will validate and preserve a consumer's right to access local over-the-air television with an individual antenna, make a personal recording with a DVR, and watch that recording on a device of their choice."
Aereo launched on Valentine's Day 2012. at a splashy press event in New York, helmed by Kanojia and one of his investors, former Fox network president and current IAC (IACI)chief Barry Diller.
Diller said the service "pries over-the-air broadcast television out of that closed system" of cable and satellite distribution. He hinted that Aereo could someday deliver a wide range of television shows -- not just local stations -- to subscribers via the Internet, rivaling cable companies like Comcast.
Shortly after Aereo launched in its first market, New York City, the owners of most of the country's major broadcasters --including ABC (DISFortune 500), CBS, Fox, and NBC(CMCSAFortune 500) -- filed copyright infringement lawsuits.
The legal action continued as Aereo expanded to new cities like Boston. But courts have mostly sided with Aereo, leading to the broadcasters' appeal to the Supreme Court.

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