Aereo ordered to shut down in Utah and the West

Michelle Clancy | 21-02-2014

Aereo, the controversial over-the-top (OTT) video streamer, has lost its first important legal battle.

A group of broadcasters have won a preliminary injunction against the Barry Diller-backed service in the US District Court for the District of Utah Central Division, prohibiting Aereo from operating in the Salt Lake City DMA and throughout the entirety of the Tenth Circuit.

There is no appeal: the Utah court stayed any further action on the matter until there is a decision from the United States Supreme Court in the ABC vs. Aereo case.

Aereo is facing lawsuits from content companies and broadcasters that are claiming copyright infringement because they allege that the company retransmits local TV affiliate feeds via the Internet without paying retransmission fees. Aereo has counter-argued that because it provides dime-sized antennae to its subscribers who pay $8 per month for access to a couple dozen channels it constitutes an over-the-air, rabbit ears-based service, which is exempt from retrans. It has also argues that its content is delivered to a single cloud-based DVR device for one subscriber and can therefore not be categorised as a public broadcast service, subject to fees and regulations.

Until now, it has succeeded in its arguments, winning legal challenges in a handful of cases.

In Boston for instance, Federal Judge Nathaniel M Gorton issued a pro-Aereo ruling in the United States District Court for the District of Massachusetts in a suit brought by Hearst Stations on behalf of its local TV station, WCVB-TV.

In his decision, Judge Gorton concluded: "After considering the relevant factors, the court finds that a preliminary injunction is unwarranted. 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.'"

He added: "Hearst fails to make a sufficient showing that it is likely to prevail on any of [its] claims and therefore this factor weighs against a preliminary injunction in its favour."

In New York, Aereo has won the right to exist. There, a panel of judges for the 2nd Circuit have ruled that Aereo did not violate copyright law and a review of the decision by the full court was denied.

Thanks to broadcaster appeals, the case is going to the Supreme Court next, and is expected to be decided once and for all this spring or early summer.

In the Utah case, Sinclair's television stations, KUTV and KMYU, as well as KSTU, Nexstar Broadcasting and FOX Broadcasting filed the injunction to prevent Aereo from operating. The court concluded that the broadcasters are likely to succeed on the merits of their copyright infringement claims and will be irreparably harmed if a preliminary injunction were not issued.

"Based on the plain language of the 1976 Copyright Act and the clear intent of Congress ... Aereo is engaging in copyright infringement," the decision reads.

"This is the right decision," said David Smith, president and CEO of Sinclair. "As the court correctly found, the loophole Aereo believed it could take advantage of in the law does not in fact exist and, as a result, Aereo is not able to use copyrighted material without permission."