Court Says Big Broadcasters Can't Stop Aereo's Tiny Antennas

You are surrounded by the radio waves of local television signals. They are available to you for free if you put up an antenna, but there was no easy way to take that free signal and then stream it to all your digital devices. Now there is. Aereo, available only in New York presently, combines an antenna with broadband to transmit television wherever you want it.

Ryan Kim provides the details in a February GigaOm article:

The system works by creating an array of hundreds of thousands of tiny TV antennas the size of a thumbnail and housing them in one data center in a market. When users hook up to Aereo, they take command of an antenna, renting it to get local broadcast channels such as ABC, CBS, Fox and others. They also have access to a cloud-based dual tuner DVR that allows them to initially record up to 40 hours of content.

Customers can view the content on iPads, iPhones, AppleTV, and Roku devices via the web. Rates vary from $1/day to $80/year. The company, backed in part by IAC, aspires to expand nationally.

This is an approach local community networks should follow, particularly those who want to build broadband networks but don't want to get lost in the mind-numbing details of offering a television package.

Needless to say, major broadcasters have gone to the court to stop the ambitious start-up. FOX, the Tribune Company, PBS, Univision, and others, lost their July bid for a preliminary injunction to stop Aereo from rebroadcasting their programming over the Internet. The plaintiffs argued that Aereo violated copyright protections, but Aereo's method does not amount to a copyright infringement according to the court. The individual control over each antenna does not allow sharing of content and does not amount to infringement through public performance.

Staci D. Kramer, from paidContent summed up the judge's rationale for denying the injunction:

U.S. District Judge Alison J. Nathan ruled that the networks and television stations suing Aereo had some points in their favor but were arguing a legal position that was unlikely to win in court based on precedent set by the earlier case Cartoon Network vs. CVC Holdings (Cablevision). In that case, an appellate court agreed with Cablevision that individual delivery to customers of shows recorded via off-site DVR was not the same as a transmission to the public. Aereo’s individually operated antenna-DVR contention dovetails with Cablevision. The judge accused the plaintiffs of trying to twist that ruling by arguing some elements should apply and others should not — and concluded “faithful application of Cablevision requires the conclusion that Plaintiffs are unlikely to succeed on the merits of their public performance claim.”

In addition to the likelihood of success (or lack thereof), the judge had to consider financial impact on both parties, routine elements of preliminary injunctions. The judge agreed that the broadcasters would be negatively affected, but an injunction could shut down Aereo. Balance of hardships tipped the scales in favor of Aereo.

Plaintiff broadcasters immediately announced they would appeal the ruling, stating that an appellate decision in their favor is the primary goal. Aereo, and IAC, were not surprised and seem to have been ready for a substantial legal battle. From the Kramer article:

When the startup’s plans went public earlier this year, networks began asking for payment in exchange for permission to transmit the signal (retransmission fees). But [IAC CEO Barry] Diller says he told them: “When you get Radio Shack to pay you a slice of profit for selling an aerial, we’ll pay you.”

Update: To be clear, Aereo is far from home free and still may be sued out of existence. But the model is what we find intriguing and could be copied depending on how the lawsuits go.

Here are some videos showing product demonstrations.