In latest legal move, Aereo says it complies with Cablevision settlement

Michelle Clancy | 23-10-2012

Barry Diller's over-the-top (OTT) local broadcast streamer Aereo has taken its court case with the major networks up a notch: it has filed a brief with the U.S. Court of Appeals for the Second Circuit, arguing that its technology was designed to fall within the precedent set by the Cablevision network DVR case, which the MSO won back in 2009.

Aereo offers access to live local broadcast feeds over the Internet to consumers in the New York area for $8-$12 per month or $80 per year—and it comes with DVR capability. It argues that it is essentially acting as any other free-to-air channel reception enabler thanks to the tiny dime-sized antennae that it issues to subscribers, but the major broadcast networks say Aereo is just one more copyright infringer trying to offer licensed content over the Internet without paying the networks for it. CBS, FOX, NBC and Univision filed for a preliminary injunction to shut down the service—a motion that was denied by a U.S. district Judge for the Southern District of New York. A lawsuit from the four is still pending.

Now, Aereo is proactively shooting across the bow in the next level court as it prepares for the trial to get underway—a trial that could take months, if not years. It said in its 84-page court filing that the networks were essentially looking to hamstring technology innovation in the name of fixing the competition.

"Indeed, contrary to what may be the view of certain Appellants, copyright laws were never intended to be used to confine consumers to outdated technology," reads the filing. "The reality is that the networks fought VCRs, and they fought remote DVRs, and they lost in both cases. This is simply another attempt to preserve the status quo as a business matter without regard to fundamental copyright principles."

Cablevision won its case by successfully arguing that its cloud-based DVR technology delivers a single copy of licensed content to consumers, just as a traditional set-top box (STB)-based DVR would, with the only difference being the storage area for recorded content—in that case, Cablevision data servers in the cloud. The court agreed, saying that the network DVR offering did not constitute a new IP-based service that would need to be covered by a separate carriage agreement. Aereo is claiming the same justification, arguing that it simply delivers antennae-based free-to-air local station feeds for personal consumptionjust as a set of rabbit ears would. The IP aspect of its delivery, it says, is merely a back-end technology choice that should not alter the copyright parameters governing its business case.

The company is trying to take its case directly to the Appeals Court, debating that the court would need to overturn Cablevision to find Aereo guilty.

Ironically, Cablevision itself filed an amicus brief in federal court saying that Aereo's service does violate copyright laws. Of course, it has a competitive interest itself in seeing Aereo shut down.

"Both Appellants and amici argue that the Aereo technology is an 'artifice' or some clever attempt to get around copyright law," the brief reads. "Essentially, Appellants are arguing that Aereo carefully designed its system to comply with Cablevision. There is considerable irony in Appellants' suggestion that Aereo is somehow culpable because it carefully designed its system to comply with copyright law."