Editorial: All-In on Aereo

No split in the federal circuits yet, could come soon

Broadcasters have decided to go all-in on Aereo at the Supreme Court. Then again, it’s not like they had much choice. Last week was the deadline for petitioning the Second Circuit Court of Appeals decision not to block the Barry Dillerbacked company from delivering TV station signals over the Internet to subscribers without paying broadcasters for the privilege.

There is as yet no split in the federal circuits, but that could come soon if the Ninth Circuit federal appeals court decides to uphold an injunction against similar service FilmOn, granted by a California judge.

Even without that decision, however, there is definitely a difference of opinion in the courts that needs to be resolved over whether the Aereo/FilmOn model is or is not a public performance, subject to the same copyright payments as cable and satellite operators retransmitting signals. Needless to say, that resolution will have repercussions in the industry.

There is, of course, no such difference of opinion among broadcasters, including all the major networks and the public broadcasting service, as noncoms are allied with commercial broadcasters in wanting to protect their signals.

Broadcasters have reason to be concerned. They are currently in “defend your life” mode on multiple fronts. The FCC is trying to cajole, prod and push them off spectrum so it can be turned over to wireless broadband companies. They are fighting Dish Network in court over the Hopper’s ad-skipping DVR that records and deletes commercials from some broadcast network primetime programming. And then there are Aereo and FilmOn, whose model they argue threatens the future of over-the-air television.

Fox has claimed the network will not be available over-the-air much longer unless the courts make Aereo and FilmOn pay for delivering that broadcast signal, a point the network and other broadcasters made to the Supreme Court.

That is in part because they have been reading the tea leaves, and they see the precedent of “pay for no play” extending to cable operators seeking to get out from under retransmission consent fees. Those fees are on the rise as broadcasters try to lock down a second revenue stream from their programming, which continues to out-deliver cable programming even as the latter collects bouquets at Emmys time.

Broadcasters are also concerned that with Aereo viewing unmeasured by Nielsen, if the service catches on, or spreads, it could adversely affect ad rates.

Broadcasters need legal certainty so they can decide how to proceed. Technology does not cool its heels while the courts deliberate, and broadcasters need to base their business models on rules of the road that don’t potentially change with each succeeding lower court decision.

We wish broadcasters a speedier resolution to the issue than is likely.

Even if the Supreme Court takes the case — which one veteran attorney said would surprise him — the court likely will not render a decision until mid-2014 at the earliest. In the meantime, Aereo continues to expand, and though a D.C. court has enjoined FilmOn everywhere but the Second Circuit, execs at the service have pledged to launch it in Boston despite the injunction, given that a Massachusetts judge agreed with the Second Circuit and rejected an Aereo injunction sought by Hearst.

Yes…it’s complicated and it’s messy. And that pretty much describes the video marketplace in general, which has been upended by the Internet and continues to outrun government efforts to figure out how to update its video regulations, or apply its copyright laws, to keep pace.

We wish there was a clearer path to the video distribution future, but it is in the hands of a legal system whose wheels turn slowly, and a government that has a hard enough time keeping its lights on, much less illuminating this difficult copyright issue.