updated 10:42 pm EST, Wed February 19, 2014
First legal defeat curtails operations in eight states
Internet "over-the-air" television video streaming service Aereo has been handed its first defeat in its ongoing court battles with conventional broadcasters, and the verdict is a significant one. Judge Dale A. Kimball of the Utah federal court system ruled that the streamer is violating the copyrights of broadcasters with its service in the states of Utah, Colorado, Kansas, Oklahoma, New Mexico, Wyoming, and segments of Montana and Idaho.
As part of the Federal Communication Commission's charter to the broadcasters, they must make their content available over the air, for free, to the locality they serve in exchange for use of the publicly-owned airwaves. Aereo captures this broadcast, using arrays of tens of thousands of mini antennae, and streams this content to subscribers at their convenience.
Aereo argued that with its service, it is guaranteeing users' legal rights to the content that the broadcasters are mandated to serve. Broadcasters argue that Aereo, despite using one antenna for each customer as required by previous rulings relevant to Aereo's use, is still infringing by re-transmitting its content over the Internet. Aereo doesn't strip out television commercials paid for by advertisers, or alter the broadcaster's content in any way.
As a result of the ruling, Aereo's operation in Salt Lake City, UT, and Denver, CO will have to be shuttered. "The 1976 Copyright Act supports the Plaintiffs' position," Judge Kimball wrote. "Aereo's retransmission of Plaintiffs' copyrighted programs is indistinguishable from a cable company," and as such, Aereo must negotiate re-broadcasting fees with the broadcasters.
Aereo founder and chief Chet Kanojia said in a statement about the ruling that "consumers have a fundamental right to watch over-the-air broadcast television via an antenna and to record copies for their personal use. We are very sorry for the effect on our valued customers in the Tenth Circuit, and we will pursue all avaiable remedies."
The case will be heard by the Supreme Court in the future, with the survival of the online service at stake. Should Aereo prevail in the Supreme Court, it will see fewer court battles nationwide, and larger freedom to operate without pressure from broadcasters in markets it enters. Additionally, a Supreme Court ruling in Aereo's favor permitting operation will invalidate the ruling made in the Tenth Circuit.