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Broadcasters are telling the Supreme Court that they are concerned cable operators and other multichannel video programming distributors will borrow a page from Aereo and bypass retransmission payments — unless the court opts to step in.
The major broadcast networks and PBS have asked the court to rule on whether Aereo’s Internet delivery of TV station signals is a public performance subject to copyright payments, or rather — as Aereo asserts — remote, private access to the free over-the-air signals viewers are entitled to. The answer, broadcasters argue, is critical to their future.
In making their case for why the court should review the Second Circuit Court of Appeals’ denial of an injunction, the broadcasters offered up their arguments for why not doing so would cause them major harm, which is one of the tests for granting a preliminary injunction.
“Certain cable and satellite companies have responded by threatening to use the decision as a road map for re-engineering their own delivery systems so they too can retransmit broadcast signals without obtaining the broadcasters’ permission,” they told the court.
Why This MattersDecisions about how the law treats streaming services could have a make-or-break effect on the broadcasting business.
Broadcasters also specifically pointed out that during the recent CBS/Time Warner Cable retransmission consent impasse, TWC “threatened to develop its own Aereo-like system to avoid compensating copyright owners and broadcasters for the use of their programming.” To this they added that TWC also encouraged customers blacked out during the impasse to sign up for Aereo to receive the stations.
Broadcasters also issued something of a subtle threat, pointing out that some in their ranks might move their content from free over-the-air to pay cable if the courts allow the Aereo model to stand.
Disney, for example, signaled well over a decade ago that it could always move its content to a cable model, though that claim involved the issue of network compensation.
Changing the Model
In April, News Corp. president/COO Chase Carey, speaking directly to Aereo, threatened to scrap the free-TV model and move the Fox network to cable. Carey said he valued the affiliate model, but that unless the legal system compelled Aereo and similar services to pay for their signal, “A [different] business solution is the path we’ll pursue if we don’t get our rights protected any other way.”
Last week, Aereo backer and broadcast vet Barry Diller argued that he is simply trying to give people a direct line to the TV signal broadcasters are required to offer. “That’s really what we are trying to do,” he told a Giants of Broadcasting awards audience — where Diller himself was among those honored.
Broadcasters have some cover in Washington for the move Carey suggests; in the past, Fox would have drawn criticism for abandoning the over-the-air audience they had secured free government spectrum licenses to serve.
The FCC is encouraging broadcasters to give up spectrum in major markets populated by network-owned stations and affiliates, and has even suggested cableonly carriage as one option for those who wanted to stay in the video business — only without the spectrum.
It is unclear whether broadcasters will succeed in catching the Supreme Court’s ear, given that the lower courts have not yet ruled on the underlying case — the petition is based on the rejection of a preliminary injunction.
But in a separate case involving the similar TV station streaming service FilmOn, the Ninth Circuit is considering an appeal of a lower court decision granting an injunction. If that federal court does not overturn the injunctions, there will be a split in the appeals court, which is traditionally one of the reasons the Supreme Court might choose to step in.
Broadcasters’ Supreme Court plea included a request that the justices act with dispatch. “The exceptional importance of the question presented warrants this Court’s resolution now,” they argued.
But the court moves at its own pace. In any event, it probably would not hear the case until the spring. And there is unlikely to be any resolution of the legal question about Aereo and others services’ legal status until the end of 2014 at the earliest, which is just about when broadcasters will have to be deciding whether to give up their spectrum to the FCC.