Media Companies ask U.S. Supreme Court to Declare Aereo Services Illegal

Washington, DC, Oct. 16, 2013 — The biggest U.S. media companies have asked the U.S. Supreme Court to rule Aereo Inc., which provides broadcast signals to online viewers, as an illegal operation. Petitioners to the suit include — Walt Disney Co., 21st Century Fox Inc., Comcast Corp. (CMCSA)’s NBCUniversal, CBS Corp. (CBS), Univision Communications Inc., the Public Broadcasting Service and station WNET, and Tribune Co. owned New York station WPIX — filed the petition on Friday with the court after litigation in lower courts failed to stop Aereo.

According to the petitioners, Aero’s retransmission service over the Internet “enables its subscribers to watch broadcast television programs over the internet for a monthly fee” as an obvious copyright violation because Aero simply captures over-the-air broadcast signals without authorization and then profits from retransmitting those broadcasts to its subscribers.

They said Aero is able to offer access to their “live TV” programming more cheaply than its competitors in part because, unlike cable and satellite services or licensed Internet video on-demand services, Aereo has not paid anything or obtained any kind of permission to offer this programming.

Analysts see Aereo to be a threat to the $3 billion in fees that broadcast station owners will receive this year from pay-TV systems to provide signals to subscribers.  If allowed, pay-TV systems could offer their own work-around to avoid paying so-called retransmission fees. Bloomberg Industries estimates that broadcast stations will collect $3.02 billion in retransmission fees from pay-TV systems this year, doubling to $6.05 billion by 2018.

Fox spokesman Dan Berger has told reporters that “Aereo is stealing our broadcast signal.”

Earlier this year, Chase Carey, president and chief operating officer of New York-based Fox, has even threatened that the company would convert its Fox TV network into a cable channel and cease broadcasting if U.S. courts permit Aereo to continue taking its signals without compensation. Reports say Leslie Moonves, CBS’s chief executive officer, and Haim Saban, chairman of Univision, have said they would follow Fox off the air if necessary.

The petition in the Supreme Court was prompted by the broadcasters and media companies’ setback on October 10 when federal judge Nathaniel M. Gordon of Massachusetts ruled in favor of Aereo and denied a motion for it to stop operating.

“Hearst has not demonstrated a sufficient likelihood of success on the merits nor the requisite irreparable harm and therefore it is not entitled to that ‘extraordinary and drastic remedy,’” Gordon said.

In a string of earlier setbacks for media companies, the Southern District of New York on July 11, 2013, and the Second Circuit Court of Appeals on April 1, 2013 and July 16, 2013, also denied their appeal to stop Aero. The judges have permitted Aereo to operate during legal challenges.

Aereo CEO and founder Chet Kanojia said last week their victory belongs to the consumer, adding “that there is no reason that consumers should be limited to 1950s technology to access over-the-air broadcast television.”

Using Aereo, a consumer can simply and easily use an individual remote antenna and cloud DVR via the Internet to record and watch-over-the air programs.

In the meantime, Aero has announced an Aereo Android app will available for download in the Google Play store on October 22. With the new app, Android devices can also be used to connect Roku to an Aereo account.

Kanojia said “...we believe consumers should have more choice and control over how they watch television and a big part of that is expanding the universe of devices that they can use to access Aereo’s remote antenna and DVR technology.  This year, our focus has been on growing our footprint across the country.”