In a letter to U.S. District Judge Alison Nathan on Wednesday, Aereo’s legal team is claiming that it is eligible for the same statutory license that cable companies pay in providing broadcast transmissions to their subscribers.
Aereo cites the Supreme Court majority opinion, which was rooted in the idea that because Aereo was “substantially similar to” a cable system, it fell under provisions of the 1976 Copyright Act that target such multichannel distributors.
“The Supreme Court’s holding that Aereo is a cable system under the Copyright Act is significant because, as a cable system, Aereo is now entitled to the benefits of the copyright statutory license pursuant to the Copyright Act,” the company’s lawyers said in their letter to Nathan. “Aereo is proceeding to file the necessary statements of account and royalty fees.”
Broadcasters, however, object to Aereo’s shift in strategy, noting that Aereo previously said that it did not fall under the definition of a cable company. The issue came up during oral arguments before the Supreme Court, but Aereo’s attorney David Frederick said it was an equipment provider, not a cable service.
“Whatever Aereo may say about its rationale for raising it now, it is astonishing for Aereo to contend the Supreme Court’s decision automatically transformed Aereo into a cable system under Section 111 given its prior statements to this court and the Supreme Court,” broadcasters’ lawyers wrote.
But Aereo said that it was taking the approach because the Supreme Court “has announced a new and different rule governing Aereo’s operations last week.”
Other broadcast streaming services have pursued such an approach, but have lost in court. In 2010, ivi Inc. claimed that it should be eligible for a statutory license because it was functioning like a cable company, but the 2nd Circuit Court of Appeals rejected that approach. The company ceased operations.
Aereo contends that the Supreme Court’s decision essentially overturned the 2nd Circuit’s ivi decision. That would have tremendous implications for all sorts of over-the-top services, but broadcasters are likely to argue that the Supreme Court’s ruling was limited in scope.
Aereo also suggests that if Nathan rejects their effort to qualify for a statutory license, their would seek to limit any injunction to the simultaneous or near-simultaneous streaming of broadcast signals. “The Supreme Court did nothing to prohibit — and indeed reaffirms the vitality of — non-simultaneous playback from copies created by consumers,” Aereo’s lawyers wrote.
The complete letter is here.
Several days after the court ruling, Aereo announced that it was pausing its operations. The company’s founder, Chet Kanojia, sent a message to its users on Wednesday that linked to the letter and was headlined, “Our Path Forward.”
“From the beginning, it has been our mission to build a lawful technology that would provide consumers with more choice and alternatives in how they watch television,” he wrote. “We believed that providing an innovative cloud-based individual antenna would provide consumers with a convenient way to use an antenna to watch the live, free-to-air signals broadcast over public spectrum that belongs to them.”