[opendtv] TVTechnology: McAdams On: Aereo’s Hail Mary
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Sat, 12 Jul 2014 08:16:32 -0400
http://www.tvtechnology.com/article/mcadams-on-aereos-hail-mary-/271251
TVTechnology: McAdams On: Aereo’s Hail Mary
THIMBLERIG— Now that the highest court in the United States has determined that
Aereo is breaking the law, it is countering with the clever strategy of
claiming that it’s not breaking the law because the Supreme Court said it
resembles a cable system. By extension, Aereo says it’s therefore eligible to
negotiate for the carriage of TV signals. That was the upshot of its response
to the district court judge whose denial of an injunction against Aereo was
overturned by the Supreme Court last month.
“If Aereo is a ‘cable system’ as that term is defined in the Copyright Act, it
is eligible for a statutory license, and its transmissions may not be
enjoined,” Bruce P. Keller of Debevoise & Plimpton LLP wrote in a joint letter
with the plaintiffs to Judge Alison Nathan of the U.S. District Court for the
Southern District of New York.
The high court basically told Judge Nathan to issue the injunction. Aereo
basically told Judge Nathan not to issue the injunction because it really isn’t
what it said it was back when she denied the injunction.
Because, you see, Aereo is the mayor on HBO’s “True Blood.”
“The Supreme Court has announced a new and different rule governing Aereo’s
operations.” Keller wrote for Aereo. “Under the Second Circuit’s precedents,
Aereo was a provider of technology and equipment with respect to the near-live
transmissions at issue in the preliminary injunction appeal. After the Supreme
Court’s decision, Aereo is a cable system with respect to those transmissions.”
The broadcast plaintiffs in the case responded with words to the effect of,
“what are these guys smoking?”
“It is astonishing for Aereo to contend that the Supreme Court’s decision
automatically transformed Aereo into a ‘cable system,’” Keller wrote for the
plaintiffs.
Aereo says it’s eligible to carry TV signals pursuant to the Copyright Act,
Title 17, wavy sign 111, which defines the “limitations on exclusive rights:
Secondary transmissions of broadcast programming by cable,” and serves as a
natural alternative to Sominex.
However, Copyright Act, Title 17, wavy sign 111 says secondary transmission is
“permissible under the rules, regulations or authorizations of the Federal
Communications Commission.” And the FCC says in 47 Code of Federal Regulations
wavy sign 76.64(a) that “no multichannel video programming distributor shall
retransmit the signal of any commercial broadcasting station without the
express authority of the originating station,” emphasis mine. Exceptions
include must-carry and distant signals for unserved households, which do not
apply to Aereo.
And so, to the first point: Did the Supreme Court define Aereo as a cable
system, or is this a classic case of language filtering. It was a short-lived
relationship, after all. Here’s what the ruling said, emphasis also mine:
“Because Aereo’s activities are substantially similar to those of the
[community antenna TV] companies that Congress amended the [Copyright] Act to
reach, Aereo is not simply an equipment provider.”
This does not appear to be a classification. Jim Burger, a media and
intellectual property attorney with Thomson Coburn LLC, said in fact that the
court did not formally define Aereo as a cable system, per se. Had it done so,
Aereo and everything like it would have become the FCC’s headache. However, the
opinion leaves much to be desired, according to Gus Horowitz, a telecom
attorney at the University of Nebraska College of Law.
“Even though it reaches the correct outcome, the Supreme Court’s Aereo opinion
is staggeringly, and confusingly, bad. The court’s ‘looks like cable’ analysis
fails to address the difficult questions about the meaning of the Copyright
Act; rather, it has added to existing confusion,” he wrote for Tech Policy
Daily.
Even if Judge Nathan accepts that the high court defined Aereo as a cable
system, there’s that pesky sticky wicket of “express authority,” something the
FCC recently reiterated with a $2.25 million fine against a Texas cable
operator. Media attorney R. Scott Flick with Pillsbury in D.C.:
“The Supreme Court clearly did not rule that Aereo was a cable system for
purposes of applying the compulsory license, and even if it had, it still
wouldn't circumvent the need to get retrans consent from the broadcasters Aereo
wants to carry. More importantly, Aereo’s copyright infringement up to this
point carries potential damages awards to broadcasters in the multi-billions of
dollars, making any rescue effort by Aereo too little, too late.
This goes to what the Mr. Keller wrote for broadcasters in the aforementioned
joint letter:
“Have these guys stepped off a curb and hit their head?”
Or rather, whether or not the court entertains the cable definition defense,
the injunction should be imposed “given the court’s ruling that Aereo has been
violating plaintiff’s exclusive rights to publicly perform their works for over
two years, during which time plaintiffs, as the court held, have suffered
irreparable harm.”
And “irreparable harm,” ladies and gentleman, is a core component of the
justification for an injunction. “Irreparable” in that it can’t be measured in
the way the judges in the Fox-Dish Hopper stand-off suggest is possible. (See
the superbly crafted piece, “Fox v. Dish Hopper: Court Skeptical of
‘Irreparable Damages.”) The Aereo damage is arguably irreparable because the TV
stations in the 13 markets where it launched have no way to measure its impact
on ratings, the universal currency of ad revenue.
Finally, Aereo argues that even if the court grants an injunction for
“near-simultaneous” playback, it should not cover recording under the precedent
set in Cablevision. This conveniently ignores “express authority.” Aereo’s plea
to the district court amounts to a Hail Mary in overtime, or as Mr. Flick
writes: “Aereo is rearranging deck chairs on the Titanic not as it sinks, but
as it sits on the bottom of the ocean.”
One more point peripheral to Aereo is the implication of the Supreme Court’s
ruling, made by Mr. Burger.
“Under this ruling, Google comes up with a local OTT package,” he said. “They
could go to the broadcasters with a check.”
It seems the fun has just begun.
Regards
Craig
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