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Aereo Embraces Ruling, Tries To Re-Classify Itself As Cable Company

samzenpus posted about 3 months ago | from the bend-like-the-broadcast-reed dept.

Television 147

An anonymous reader writes Rather than completely shuttering its TV-over-the-internet business, Aereo has decided to embrace the Supreme Court's recent decision against it. In a letter to the lower court overseeing the litigation between the company and network broadcasters, Aereo asks to be considered a cable company and to be allowed to pay royalties as such. Cable companies pay royalties to obtain a copyright statutory license under the Copyright Act to retransmit over-the-air programming, and the royalties are set by the government, not the broadcasters. The broadcasters are not happy with this move, of course, claiming that Aereo should not be allowed to flip-flop on how it defines itself.

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If it looks like a duck (5, Funny)

Anonymous Coward | about 3 months ago | (#47430267)

Aereo to broadcasters: "quack".

Re:If it looks like a duck (5, Insightful)

NotDrWho (3543773) | about 3 months ago | (#47430457)

Maybe the broadcasters should have listened to Admiral Ackbar before they argued so persuasively that Aereo was a cable company.

Re:If it looks like a duck (1)

Bos128 (3494835) | about 3 months ago | (#47430895)

Not to worry. Congress can simply say that it's "Duck Season" and let the incumbents hunt Aereo down.

Re:If it looks like a duck (2)

ZipK (1051658) | about 3 months ago | (#47431605)

Congress can simply say that it's "Duck Season"

The court will then counter by saying, "rabbit season."

Re:If it looks like a duck (2)

Cajun Hell (725246) | about 3 months ago | (#47431723)

Would you like to shoot me now or wait till you get home?

Re:If it looks like a duck (1)

sconeu (64226) | about 3 months ago | (#47431843)

Shoot him now! shoot him now!

Re:If it looks like a duck (0)

Anonymous Coward | about 3 months ago | (#47430931)

I'm starting to wonder if this was Aereo's intentional long game. I mean, they aren't clairvoyant, but if they deduced out what would happen by way of law and SCOTUS ruling against them, it's quite the game they've played, and box they've painted broadcastors into.

Or, maybe I've been reading/watching too much GofT's.

Re: If it looks like a duck (0)

Anonymous Coward | about 3 months ago | (#47431763)

Unlikely. They have patents on the antenna tech and not much defensibility with this approach.

Re:If it looks like a duck (0)

Anonymous Coward | about 3 months ago | (#47431343)

Maybe the broadcasters should have listened to Admiral Ackbar before they argued so persuasively that Aereo was a cable company.

IT'S A TRAP!!

Re:If it looks like a duck (0)

Anonymous Coward | about 3 months ago | (#47432479)

They get their compulsory licenses. They're happy that people who could otherwise pluck the stream out of the air for free (however difficult it may be due to the surrounding geography) are now paying them.

It's only fair (2, Insightful)

Anonymous Coward | about 3 months ago | (#47430275)

They weren't happy with the disruptive competition. Now they're still not happy with the disruptive competition. Quelle surprise.

Given how the cable companies divied up the market into little monopolies for each, it might actually be best for their customers to let aereo do this, and not allow the multi-monopolies to devour an unwanted competitor.

Re:It's only fair (3, Insightful)

DarkOx (621550) | about 3 months ago | (#47430343)

Right, its a complex balance of power the networks have with the cable operators and what they really don't want is people making waves.
Just looks at the fights CBS and ABC have been in lately (NBC is a little different given they are COMCAST subsidary ).

On the one hand royalties from Areo might be a new revenue stream on the other hand premium cable seems to be where the eyeballs are going to the point the cable operators have started expressing less willingness pay to carry the networks. Its probably a smallish number of very vocal cable subscribers that push them to continue to pay CBS's extortion fees. If those folks could just pick up a cheap Areo subscription well it might actually weaken the hand of broadcast networks to charge the other cable operators. ABC has nothing to worry about though because their parent Disney will just make carrying ABC a condition of carrying ESPN which no cable operator would dare drop.

Re:It's only fair (4, Interesting)

Mr D from 63 (3395377) | about 3 months ago | (#47430449)

If they are considered a cable company, then they won't need all those antennas. That should reduce their operating cost, and maybe offset some of the new re-transmission costs.

Re:It's only fair (2)

DarkOx (621550) | about 3 months ago | (#47430683)

Oh definitely; and they or someone a little bigger ( Amazon? Netflix? ) who could potentially acquire them might be able to deliver profitably service dirt cheap like single digit dollars per month.

I don't want pretend to understand all the dynamics involved with the network to cable co contracts, FCC must carry requirements, local monopolies granted to cable companies, etc.

That last one was never hard to enforce, but how will $MUNICIPALITY enforce the cable monopoly agreement against a cable company like Areo with no cables? Suddenly they or someone like them are going to be a new player in the game like the SAT TV providers were, and it will at least slowly shift the balance somewhat.

Re:It's only fair (1)

idontgno (624372) | about 3 months ago | (#47431851)

That's an interesting thought. Aereo goes from being a self-described game-changer to a Trojan horse for other content streaming concern. I can't see entrenched cablecos being happy about that either. Maybe someone on their side has figured that out?

Re:It's only fair (2)

Applehu Akbar (2968043) | about 3 months ago | (#47430783)

I was also wondering about the relevance of Aereo's technology in this new business model. If it gets classified as cable carrier, which is what the SCOTUS decision requires, then why not pick up its signal in the same way as all the other cable companies? Then it can trump everyone by offering networks a la carte over the Internet.

Re:It's only fair (1)

Mr D from 63 (3395377) | about 3 months ago | (#47431259)

They could still only deliver local OTA stations, and could not send them out of region. Making the stations available out of region would require a negotiated contract with the network/station.

Re:It's only fair (1)

nine-times (778537) | about 3 months ago | (#47430845)

Well also the networks want people to subscribe to cable specifically because the owners of the networks also own other cable channels.

Re:It's only fair (1)

ArhcAngel (247594) | about 3 months ago | (#47431455)

Another company is quietly doing its own shaking these days and I find its approach very interesting. ION [iontelevision.com] has local stations in most of the large metropolitan markets. It has started leveraging those stations by selling a set top box [airbox.com] that decodes sub channels on its local broadcast to deliver premium channels from Showtime and Starz as well as PPV content. It uses your existing antenna and you still get all the local channels. If Aero were to offer something like that for ~$30-$40 like ION does I'd be very interested.

Re:It's only fair (2)

ZipK (1051658) | about 3 months ago | (#47431677)

It has started leveraging those stations by selling a set top box [airbox.com] that decodes sub channels on its local broadcast to deliver premium channels from Showtime and Starz as well as PPV content.

It's surprising to find that the FCC has no rule against the broadcast of encrypted PPV content on public television channel allotments. Or maybe it's not surprising at all.

Re:It's only fair (0)

Anonymous Coward | about 3 months ago | (#47431725)

Right, its a complex balance of power the networks have with the cable operators and what they really don't want is people making waves.

I see what you did there...

Re:It's only fair (0)

Anonymous Coward | about 3 months ago | (#47431791)

Disney will just make carrying ABC a condition of carrying ESPN which no cable operator would dare drop.

Why?

I would drop ESPN (all variants therof), and any other sports channel in a heartbeat.

Sports are a waste of human and financial resources - absolutely nothing good comes from them, and so many permanently injured just so some sick fans can fap in the stands or lose their life's savings betting on them.

Re:It's only fair (4, Funny)

nedlohs (1335013) | about 3 months ago | (#47431865)

Unsurprisingly you do not make up 100% of cable operator revenue. In fact you make up approximately 0% and hence your particular preferences mean exactly diddly squat to their decision on how to value the sports stations that drive a large portion of their revenue.

You can still sit comfortable in your knowledge of your superiority to the people who do enjoy watching sports, of course.

Re:It's only fair (1)

I'm New Around Here (1154723) | about 3 months ago | (#47432243)

Someone on a geek site is saying people who don't watch sports are "approximately 0%" of the population.

How far up your ass can you fit your head?

Re:It's only fair (1)

nedlohs (1335013) | about 3 months ago | (#47432661)

That's not what I said. Maybe try reading comprehension next time?

Re:It's only fair (1)

ganjadude (952775) | about 3 months ago | (#47432079)

computers are a waste of human and financial resources - absolutely nothing good comes from them, and so many permanently injured just so some sick fans can fap in their basements s or lose their real life gaming on them.

see how easy that is???

hate to tell you but you are a small minority here. Half the people i know who still have cable only have it for sports.

Re:It's only fair (1)

I'm New Around Here (1154723) | about 3 months ago | (#47432277)

So, is he wrong on his points?

I figure he has the right to either enjoy sports or lament their existence, along with the multi-billion dollar companies that own and support them.

Re:It's only fair (1)

bluefoxlucid (723572) | about 3 months ago | (#47430959)

Wait until they start talking to Verizon, and learn how to swap their definition to get multi-billion-dollar government grants, then reclassify to avoid all regulatory statutes tied to the grants.

Idiots (3)

qbast (1265706) | about 3 months ago | (#47430293)

What the hell they are complaining about now? If court ruled that how Aereo previously defined itself was illegal, then obviously it has to change it. First they win now they complain about it?

Re:Idiots (2)

cdrudge (68377) | about 3 months ago | (#47430397)

Networks don't want Aereo as it will rock the boat and introduce competition in markets that have long been dominated by oligopolies. In most areas, you have one cable company that services the area, and if you're lucky, the local telco might also offer television service. You also have Dish and DirecTV.

Most networks opt to charge the cable/telco/satellite company a fee instead of forcing them to be carried as a must-carry station. If a more convenient or alternate source of locals were available, it could result in lower revenues from fees. So stations have a reason to want to keep availability scarce. Networks obviously have a vested interest in keeping the stations happy, so they fight the fight. Cable companies also join in as they may also own the local tv station. Or the TV network. Or are the content producers. Or all the above.

It's all about maximizing revenue while stifling competition that may take a portion of their pie.

Re:Idiots (4, Insightful)

fuzzyfuzzyfungus (1223518) | about 3 months ago | (#47430413)

What the hell they are complaining about now? If court ruled that how Aereo previously defined itself was illegal, then obviously it has to change it. First they win now they complain about it?

As best I can tell, they are whining because they preferred the imaginary world where the lawsuit against Aereo was actually over whether the filthy, disruptive, upstarts shoudl be burned to the ground and have the earth beneath them salted, rather than whether they were more like an antenna rental service or more like a cable company.

Aereo obviously didn't want to be a cable company, hence its ongoing defense; but the tone of the rhetoric against them was never "Yeah, because of a raft of tedious reasons, Aereo ought to be classified as a cable company for regulatory purposes"; but rather a bunch of fire and brimstone nonsense about the signal-stealing piratepocalypse.

Re:Idiots (1)

nine-times (778537) | about 3 months ago | (#47430893)

but rather a bunch of fire and brimstone nonsense about the signal-stealing piratepocalypse.

And I think you're implying this, but all of the pirateocalypse nonsense, whether it's regarding Aereo or Bittorrent-- all of it really comes down to "we want to maintain our current extremely profitable business model in the face of changing technology which renders it obsolete." Like record labels and news organizations and all the other forms of media and information-related industries, they will need to be dragged kicking and screaming into the Internet age.

Re: Idiots (0)

Anonymous Coward | about 3 months ago | (#47431381)

Keep dreaming, while Big Money drags the internet kicking and screaming to the slaughterhouse.

Re:Idiots (1)

Mr D from 63 (3395377) | about 3 months ago | (#47430419)

The networks would love to end free OTA broadcasting, anything that makes it harder to do so is an enemy of the networks.

Re:Idiots (4, Informative)

Simozene (899342) | about 3 months ago | (#47430469)

They can end free OTA broadcasting... they just need to give the wireless spectrum back to the US Government. Not going to happen.

Re:Idiots (1)

grahammm (9083) | about 3 months ago | (#47431569)

Or they could encrypt the OTA transmissions and require viewers to use a CAM [wikipedia.org] to decode them.

Re:Idiots (0)

Anonymous Coward | about 3 months ago | (#47431881)

Not without losing the spectrum they can't.

Re:Idiots (1)

grahammm (9083) | about 3 months ago | (#47432113)

Why not? Here the OTA terrestrial TV is a mixture of 'free to view' and encrypted 'subscription or pay-per-view' channels all using the same spectrum. The encrypted and unencrypted channels not only use the same spectrum but also share the same MUX..

Re:Idiots (1)

sjames (1099) | about 3 months ago | (#47432819)

The spectrum they are allocated comes with a mandate to provide a public benefit. They have been allowed some slack on encrypted sub-channels as long as their primary broadcast still meets the public service mandate. If they encrypt that too, they'll be forced to give their allocation back and cease transmitting.

Re:Idiots (0)

Anonymous Coward | about 3 months ago | (#47430587)

They haven't really won at all. In fact, they lost hilariously hard.

They had their own argument turned against them so hard they don't know what to do.

I highly expect they will pay some botnet owner to DDoS it in the coming year. Honestly wouldn't be surprised, they have done it before if they can't get their ways. RIAA did so for "piracy websites". (completely legit searching sites that had nothing to do with the actual torrent trackers they were searching, not to mention actual torrent trackers, not that it did much)

Re:Idiots (1)

Applehu Akbar (2968043) | about 3 months ago | (#47430827)

What the networks fear is delivery of TV content over the Internet. Now that everyone is getting streaming boxes of one make or another, this would invalidate their entire business model.

Re:Idiots (0)

Anonymous Coward | about 3 months ago | (#47432599)

What the networks fear is delivery of TV content over the Internet.

If so, then they ought to start acting like it. When a paying customer says "Sickbeard works with every single show, hassle-free. But I'm having trouble with my HDHomeRun. It seems some of your channels are encrypted," they need to say "We have thought about it and decided that we would prefer to keep you as a customer. Therefore, all our channels are returning to plaintext standard QAM by the end of this business day. So please, please keep paying us. We offer a valuable service."

Instead, their reaction is "Fuck you. We never wanted your money and always resented those automated monthly payments you keep giving us."

I don't know, maybe I'm too much of a behavioralist but I am pretty sure they want everyone switching to content over the Internet, and are frustrated that it's not happening fast enough. They are also obviously frustrated that so many people switched to a legal streaming services which pays royalties (Netflix). So they're trying to encouraging TV viewers think in terms of time-shifting instead of realtime (which is more vulnerable to "Internet weather"), not transferring during peak "congested" times, etc. Everything the cable companies are doing, suggests they consider torrents and nzbs to be the ideal solution that all their former customers need to transition toward.

At least that's the message I'm hearing from them, every time they yell "fuck you!" at all their paying customers. I am not perceiving the slightest amount of fear on their part. They are totally at peace with the suicide plan.

Re: Idiots (1)

fermion (181285) | about 3 months ago | (#47431315)

The US taxpayer gave away airwaves to broadcasters in exchange from free service. The broadcaster can recoup costs and make a profit through advertising. Cable companies pay because they collect all signals and transmit to everyone. Aero rents an antenna and a DVD and records specific shows. I think the SCOTUS only looked at present revenue, no the long term impact of limiting broadcaster viability in the age of the internet. I have the right to place an antenna anywhere and receive a personal signal or recording of the signal. If the broadcasters are not going to honor the original mandate, they should give our airwaves back.

On a related note, broadcaster have been increasingly ignoring the public service mandate, and our government has been complicit in this. Aero is just another example of the giveaway of public resources to the privileged few.

Not Flip Flopping (3, Insightful)

Anonymous Coward | about 3 months ago | (#47430307)

They aren't flip flopping at all. They're accepting the ruling against them and adjusting how they do business to remain in accordance with the court ruling.

Tough shit broadcasters. Deal with it.

Re:Not Flip Flopping (1)

Sockatume (732728) | about 3 months ago | (#47430433)

That all hinges on whether Aereo changes the way it does business so it qualifies for the requisite cable licence, and the channels it wants to rebroadcast give it permission to carry their content, which after months of arguing that it isn't a cable company, and directly antagonising said channels, is probably not terribly likely.

Re:Not Flip Flopping (0)

Anonymous Coward | about 3 months ago | (#47430565)

Except it's the government's role to step in here, not those broadcast channels, as for various reasons, the government has decided to serve as the arbiter and decision maker, and the government, being such a power, is required to engage in its behavior in a scrupulously neutral fashion.

Thus if the broadcast channels get the government to declare Aereo a cable company, then as a cable company, the government must treat Aereo the same as any other cable company.

Re:Not Flip Flopping (0)

Anonymous Coward | about 3 months ago | (#47430665)

Either they are or they aren't. The Supreme Court said they are. In order to not be one, they Supreme Court would have to reverse their ruling and allow Aereo to operate as they have until now.

Re:Not Flip Flopping (1)

gabebear (251933) | about 3 months ago | (#47430861)

Not following too closely, but seems Aereo wasn't antagonizing the channels. Since the Channels make money from ads it would seem the channels should be all for another cable company.

Simplified summary (5, Funny)

cdrudge (68377) | about 3 months ago | (#47430321)

So a simplified summary of the issue is:

Aereo: We're not a cable company, we don't have to pay royalties.
Networks: Yes you are, you have to pay us
Aereo: No we aren't. Sue us.
Networks: Ok
Lower Courts:You're like a cable company.
Aereo: Are you sure?
SCOTUS: Yes.
Aereo: Crap. We'll be a cable company and pay the royalties then.
Networks: You're not a cable company
Aereo: C'mon man!

Re:Simplified summary (1)

jbmartin6 (1232050) | about 3 months ago | (#47430339)

Looks like you got this in just before robbak [slashdot.org]

Re:Simplified summary (0)

Sockatume (732728) | about 3 months ago | (#47430427)

It makes a little more sense like this:

Aereo: For the purposes of copyright, we're not a cable company.
Networks: Yes you are.
Aereo: No we're not a cable company in any way.
Courts: Yes you are.
Aereo: Okay, if we're a cable company for the purposes of copyright, then we're exactly the special kind of cable company that gets statutory rates.
Networks: You're a cable company, but you're not that kind of cable company.
Aereo: Yes we are.
Networks: No you're not.

Re:Simplified summary (1)

Joel Cahoon (2906501) | about 3 months ago | (#47430535)

I thought this was supposed to be a simplification? I'm no expert, but I'm not entirely unfamiliar with the issue, either; and I wasn't aware that there were so many different ways to classify cable companies.

What exactly is the difference between:
i) a cable company for the purposes of copyright, and
ii) a special kind of cable company that gets statutory rates?

What determines where Aereo falls on this spectrum?

Is there a Venn diagram I can consult?

Re:Simplified summary (1)

jedidiah (1196) | about 3 months ago | (#47430713)

I wasn't aware that there were "special kinds" of cable companies. This seems like a crass attempt to move the goalposts. Someone is trying to change the rules in their favor and it's not the disruptive upstart.

"Rule of Law", perhaps you've heard of it.

Re:Simplified summary (1)

Sockatume (732728) | about 3 months ago | (#47430865)

Basically if you want to be a cable company that deals with the government at special rates rather than with the content providers for whatever they feel like charging, you have to obey certain government rules. Aereo probably doesn't in its current form.

Re:Simplified summary (1)

Immerman (2627577) | about 3 months ago | (#47430917)

That's the rule that says the people with money and power get to write the laws, right? /sarc

Re:Simplified summary (1)

NotDrWho (3543773) | about 3 months ago | (#47430477)

Networks: Your honors, if it pleases the Court, we would like to offer a political bribe to Congress.
SCOTUS: We'll allow it.

Re:Simplified summary (0)

Anonymous Coward | about 3 months ago | (#47430483)

Lower Courts:You're like a cable company.

Actually, most of the lower courts said they were not like a cable company (I think there was only one that said they were).

Re:Simplified summary (3, Insightful)

Solandri (704621) | about 3 months ago | (#47430923)

Close, but what's happening here is similar to what happened with Pandora and online music broadcasters. They tried to get by by paying the same royalty rates as radio stations, which are negotiated between the RIAA and all radio broadcasters en masse. The RIAA smelled an opportunity and finangled the courts so Internet radio got defined as something new and different, and thus they could negotiate rates against a much smaller and less established entity. Consequently, Internet radio pays much higher royalties than broadcast radio.

I suspect the TV stations are trying for a similar play here. It's completely illogical (like saying you're not buying the movie, you're just buying a license to view it; but then saying you need to buy a new one at full price if you're upgrading from VHS to DVD to Blu-ray), but logic is secondary to them if there's an opportunity to extract more money from people. I think that's my biggest gripe with Copyright law - since it's a completely artificial monopoly I think the rules governing it must make logical sense in order for supply and demand to work as with natural property. But instead the copyright holders are twisting that artificiality to completely illogical means that break how markets naturally work.

Re:Simplified summary (1)

Col. Klink (retired) (11632) | about 3 months ago | (#47431103)

> Lower Courts:You're like a cable company.

Not exactly. Every lower court agreed entirely with Aero. It was only the Supreme Court that said "You look like a cable company, so the copyright that was written just for cable companies applies to you."

So, how does this go? (4, Insightful)

robbak (775424) | about 3 months ago | (#47430327)

Companies: Hey Courts, Aero is a cable company!
Aero: We really aren't.
Courts: I agree with the Companies. Aero is a cable company.
Aero: Sigh, I guess we'll have to become a cable company then.
Companies: I Object! Aero isn't a cable company!

Go Aereo! (3, Insightful)

Simozene (899342) | about 3 months ago | (#47430333)

The cable companies simply want to put Aereo out of business using whatever means necessary. The SCOTUS ruling might actually be a blessing in disguise. If they can legally be classified as a cable company, and therefore obtain a compulsory license to the content, they will be able to rearchitect their entire system to make it more efficiently able to serve a large number of customers. Even after paying for the compulsory license I believe they will still be able to keep the costs way down and provide a great and inexpensive service to their users.

Re:Go Aereo! (1)

bluefoxlucid (723572) | about 3 months ago | (#47431065)

If the companies raise a suit in the opposite direction, Aereo can point back at prior suits, enter in prior arguments against them as evidence, and try to classify the whole tirade as a SLAPP.

That is to say: Aereo can reference back that the same people suing them "because they're not a cable company" made arguments and successfully sued them "because they are a cable company." It can show the same entities suing them, successfully, with arguments diametrically opposed to the premise of the current case. It can then have the courts declare the lawsuits as strategic and not legal, and force them to repay legal fees.

Backtracking is harder. The Supreme Court sided against Aereo. I've read that the lower courts didn't have a firm decision, or that only one lower court found Aereo substantially similar to a rebroadcaster because Aereo is unicasting to individuals on a case-by-case basis. The debate is largely over whether Aereo's time and space shifting counts as copying content, or if they're logically and legally similar to a person renting a small space on your roof and putting an antenna and a small computer there.

Even given all that, it's hard to go back after you hit the Supreme Court. Aereo would have to appeal to the Supreme Court again, have them reverse their decision, then point back at the long history of suit and point forward at the sudden opposing suit and say, "Look, they sue us in any case, they're just being dicks," and get the courts to retroactively apply SLAPP and make the plaintiffs pay full legal fees all the way back. I don't think there's actually statute or precedent for any such thing; it would be monumental.

Re:Go Aereo! (1)

EvilJoker (192907) | about 3 months ago | (#47431435)

I'm not sure it would fall under SLAPP [wikipedia.org] (perhaps something else, though)

Regardless, the idea of a "gotcha" moment does not work in US courts. The evidence would be shared with the other side well in advance of the court date, and arguments would be tailored accordingly.

Re:Go Aereo! (2)

bluefoxlucid (723572) | about 3 months ago | (#47431599)

If you sue someone for putting a fence on their lawn and screwing up your nice, pretty neighborhood with a fence--because fences are universally visually disruptive--and then sue them for not having a fence, something else is going on.

In this case, there are obvious business dynamics in play here. What those dynamics imply may not be obvious, but that the dynamics exist is blatant. A business raising conflicting lawsuits is obviously trying to play some kind of legal three card monty, and forcing the courts to rule another business as X and then coming to court to complain that the business cannot be X is exceedingly easy to hit with SLAPP rules: suddenly you have to show, before discovery, that you can reasonably win this case, all while you just won a case where a judge ruled that the thing you were previously demanding and that you are now against is in fact the thing that must be done. You've already won the case against this, and you are now bringing bullshit to court.

As for backtracking, it's extremely unlikely. I said it would be monumental; but it's possible. If the courts hit the plaintiffs with SLAPP, there opens an argument that the lower courts often sided against the final ruling or made opinions to the effect that their judgment was extremely borderline and the issue is unclear from both a legal and logical perspective. If that's the actual case, then the supreme court has a lot of opinion to take into account to re-evaluate its position: the supreme court could decide that the situation is not clear-cut and, although their opinion does lean in the direction of the prior ruling, it was never strong and there is no strong legal opinion in the courts in general.

In such a situation, the court can stretch this analysis to infer that the plaintiffs, having forced the defendant into a court-ordered position and then attacked the defendant in court from exactly the opposite position, were never interested in he legal position the courts were actually examining. Given that the courts aren't *exactly* sure how to approach that issue, the plaintiff's motives become much more important: to engage in long, drawn-out legal battles they don't have strong likelihood of winning.

Having one legal battle on a nebulous issue that's not well understood by legal precedent or statue is fair. This happens, it's a normal part of civil disputes. Going through all that and then immediately reversing your position and starting over signals to us that you're just trying to drag the defendant through as much legal bullshit as possible, which suddenly makes every suit you've filed the whole way up look like SLAPP. Ironically, there is neither precedent nor statute to guide the courts in matters where it becomes clear you've been abusing the court system for a very long time; if any such legal case does come up, it would end in a landmark decision telling us whether the statute of limitations is measured in years or in how far out the door you can get before the judge smells bullshit.

Re:Go Aereo! (2)

Solandri (704621) | about 3 months ago | (#47431069)

Yeah, this could lead to the demise of the cable companies as we know them. For a long time I've said cable TV/Internet needs to be regulated as a utility. With a utility like gas or electricity, the utility company owns the pipes but is prohibited from selling the content that's carried over the pipes. They can set up a subsidiary to sell the content, but they must also allow other gas/electric suppliers to sell to customers at the same transport rates they charge their subsidiary. Those transport rates are set by a public utilities commission. Effectively, the utility company has a monopoly on the pipes (it makes no sense to install multiple gas or electric lines to each house), but due to the monopoly its transport pricing is subject to government approval and it must offer the same pricing to all sellers. Thus maintaining a free competitive market for gas and electricity.

In the U.S., cable TV/Internet has been the big exception. Because it doesn't make sense to install multiple cable lines, most municipalities only grant access to a single cable company. Yet that artificial monopoly is not regulated like a utility - the cable company completely controls the pipes and the content that's sent over those pipes. (This is a necessary step when an industry is first developing. Different companies have to be allowed to try different ways to lay down pipe and offer content over those pipes for the market to determine the most efficient way to distribute that content. But once the best method is determined, the industry is essentially a utility. At this point I think we all know TV/Internet delivery is headed towards fiber to the home.)

If Aereo can get themselves classified as a cable company, that does to cable TV what VoIP did to phone service. Right now the cable companies sell you TV, and oh by the way you can get Internet access too. With Aereo's model, you only need to get Internet from the cable company, and you can get your TV from Aereo. The cable company essentially becomes a utility giving you only Internet service. Companies like Aereo could then sell you TV service delivererd over the Internet.

Unfortunately, this means Aereo is going to have both the broadcasters and cable companies arguing against them to the FCC and the courts. While I hope they succeed like VoIP did, the influence of money in politics makes me think their chances are slim.

Can't have it both ways (0)

Anonymous Coward | about 3 months ago | (#47430365)

You can't have it both ways broadcasters, if you don't want Aereo "rebroadcasting" over the air signals fine, they should be able to license themselves under the next best option. The fact that you don't like the competition is not reasonable grounds for denying them access to the market. Personally I'd love an internet "cable company".

Re:Can't have it both ways (0)

Anonymous Coward | about 3 months ago | (#47430377)

One solution for the broadcasters would be to provide an internet feed of their programmes at a lower cost (to the viewer) than Aereo

No, no, no..... (1)

Primate Pete (2773471) | about 3 months ago | (#47430633)

......the whole point is to avoid competition, restricting consumers' choices and forcing them to pay premium prices. A low-price offering doesn't really fit into that model, now, does it?

Why not? Learn from Verizon.. (2)

i_want_you_to_throw_ (559379) | about 3 months ago | (#47430507)

The broadcasters are not happy with this move, of course, claiming that Aereo should not be allowed to flip-flop on how it defines itself.

Verizon has been on a tear to get itself reclassified as a common carrier [gizmodo.com] for a while.

Loopholes: not just for big companies anymore.

Re:Why not? Learn from Verizon.. (0)

Anonymous Coward | about 3 months ago | (#47431915)

Only for certain advantages.

Then where it would be a disadvantage, they vociferously deny being common carrier.

Just make every ISP, Cellular, Communications backbone operator Common Carrier and be done with it.

Then we can get one single unified architecture for Cellular networks, rearrange the towers for coverage anywhere, and any company can provide phones to use on the Nation's only cellular network that isn't under control of any of the big 3 (Verizon, AT&T, Sprint).

Flip, flopping.... (1)

Anonymous Coward | about 3 months ago | (#47430515)

Quote: "The broadcasters are not happy with this move, of course, claiming that Aereo should not be allowed to flip-flop on how it defines itself."

Actually, one of the essential features of our legal system is just that ability to flip-flop. I recall one murder case where the defense announced that it'd be using three arguments on behalf of the accused:

1. That the defendant was no where near the crime scene and thus could not have committed the murder. If that failed, then:

2. That the defendant killed the victim is a perfectly reasonable act of self-defense. If that failed, then:

3. That the defendant was insane at the time of the crime and cannot be held responsible for what he did.

Given that, it's more than legitimate for Aereo to argue in one series of court disputes that it's not a cable company and, losing on that, initiate a new series of that agrees with the court and are based on it being a cable company.

What's really at issue here is the messy logic it would take for the court to argue that Aereo should be legally disadvantaged for being the equivalent of a cable company and yet denied the advantages of being a cable company. Either it is or it isn't. All else is madness.

Keep in mind that, if Aereo wins this second time around, virtually every cable system in the company that offers broadband with quickly have Aereo as a competitor in their backyard. Denied the ability to be a remote TV receiver, Aereo is restructuring itself as a nationwide cable company.

Re:Flip, flopping.... (1)

Anonymous Coward | about 3 months ago | (#47430919)

Why shouldn't they be allowed to change how they define themselves?
Precedence has already been set.
Obama care is not a tax!
Oh wait, if your going to sue, then Obama care is a tax!
 

skynet is upon us.. (1)

davethomask (3685523) | about 3 months ago | (#47430573)

alast we forget, the mighy seamean monster

Re:skynet is upon us.. (1)

davethomask (3685523) | about 3 months ago | (#47430605)

mastodon leviathan ahab In Soviet Russia, Russia remembers American Traitorship!

lol (1)

Charliemopps (1157495) | about 3 months ago | (#47430581)

The Television networks really like bullet holes in their feet don't they? I'm always amazed by their insane drive to live in the 1960s while the rest of us have moved on. If Aereo has wanted to really play unfair, they'd have moved to a country without copyright law, hid their Antenna arrays and VPN's the signal overseas to redistribute it. There'd be nothing the networks could do. Instead they offered them cash and are getting frowned on... pfft.

Which non-Berne country has home Internet? (1)

tepples (727027) | about 3 months ago | (#47431391)

If Aereo has wanted to really play unfair, they'd have moved to a country without copyright law

Which country is industrialized enough to have home broadband Internet access yet is not a member of the WTO?

Surprising... (0)

Anonymous Coward | about 3 months ago | (#47430621)

Cable companies afraid of redefining how things are done? What a surprise.

Technicality, they are really a mobile company not (1)

Stan92057 (737634) | about 3 months ago | (#47430647)

Technicality, they are really a mobile company not a cable company cable company's push there content through cables not the air. Thats how lawsites get won on technicalities ;) I dont care either way, im never going back to using an antenna ever. Most of you guys and girls don't know what life was like not having cable. I sure as hell do remember.....

Re:Technicality, they are really a mobile company (1)

BonThomme (239873) | about 3 months ago | (#47431011)

my antenna rocks. HD free over the air to a Tivo with a lifetime subscription. I remember life without cable, too.

Re:Technicality, they are really a mobile company (1)

Stan92057 (737634) | about 3 months ago | (#47432093)

I'm glad it works for you. You get what you want, i get what i want we both win. But i will never go back to an Antenna ever.

Whats the problem? (1)

jonwil (467024) | about 3 months ago | (#47430705)

If Aereo is now considered a cable company then presumably it will be paying the same fees to, say, WABC7 in New York as any other cable company operating in New York. So why would WABC7 (or any other station) be unhappy with that?

They get more eyeballs watching their ads and they get the same money from Aereo as they do from cable companies.

Re:Whats the problem? (0)

Anonymous Coward | about 3 months ago | (#47431089)

Stations are bundled. This is the problem, cable providers sell you as the product to the advertisers, the content producers want as many advert slots as they can get, so they force providers to carry channels few people want. Having an upstart come in trying to make a deal with a single station upsets the status quo, which is making billions for those that control it.

From our point of view, Aereo is a step forward to paying for what we want, not what's bundled. This is why they will ultimately fail.

Re:Whats the problem? (1)

EvilJoker (192907) | about 3 months ago | (#47431529)

Cable stations are bundled. OTA stations are not.
Most markets only have a handful of OTA stations anyway (usually the local affiliates of ABC, NBC, CBS, Fox, and PBS)

Sometimes these are all owned by a single corporation [wikipedia.org] .

Re:Whats the problem? (1)

Imagix (695350) | about 3 months ago | (#47431433)

Because the people paying for ads to show on WABC7 in NY are expecting viewership in NY to be the ones consuming the ads. If the audience is now nationwide, then the value per eyeball goes way down since now a smaller percentage of the eyeballs matter. So actually both sides of the equation don't like it. The advertisers aren't advertising to the demographic they want, and since the demographic is now much wider, WABC7 can't charge as much per eyeball since many of them are useless to the advertiser.

Re:Whats the problem? (1)

chuckugly (2030942) | about 3 months ago | (#47431695)

Aereo never showed content outside the broadcast coverage area and I don't see evidence they intend to now. This has been pointed out slightly less than a million times so far in similar threads, and is blatantly obvious if one visits the company site.

Re:Whats the problem? (1)

thebrieze (1102809) | about 3 months ago | (#47431787)

WABC7 loses negotiating power with existing cable companies. The big barrier to entry in the cable industry is distribution. You either need cables - usually most neighborhoods are wired for a single cable, or you needs satellites/dishes. This lowers the barrier to entry to just about anyone - not just Aerero. Currently if WABC7 disagrees with Comcast over some negotiation, and it withholds distribution to ABC, or ESPN, Comcast will end up with a lot of very angry customers - which gives WABC7 tremendous power during negotiations.

Conversely - competition will drive down prices across the board, reducing Comcast's ability to pay WABC7's rates.

Ultimately there will be room for both, since the cable companies own the pipes, and there are advantages to having TV be independent of internet, but this will level the playing field significantly - Think of what the low cost airline industry did to aviation.

The Comcast - NBC - TWC merger is a strategic play to get ahead of precisely this scenario.

How might their cost structure / roll-out change? (1)

Bourdain (683477) | about 3 months ago | (#47431051)

According to Ars:

the royalties are set by the government, not the broadcasters

--> Is the above true, does someone know this for certain?

--> If so, what would the marginal cost be per user?

One other thing to consider is that Aereo has pretty good software developed right now and if they don't need farms of antenna's with local presence anymore, they could theoretically be located anywhere if they are, effectively, a retransmission service and would no longer need to build out local infrastructure (i.e., which I suspect was one of their larger costs) and could just use cloud type services (e.g., amazon/rackspace) to host their DVR/transcoding/etc. services

Everyone's Missing the Point (0)

Anonymous Coward | about 3 months ago | (#47431053)

The broadcasters know they'll lose this argument in court. They're just making it clear that they're going to make it as expensive as possible for Aereo to compel them licenses. If I were Aereo I would just continue providing customers with content and start mailing the broadcasters checks by certified mail for the statutory amount, and let the broadcasters assume the cost to sue me again.

Good and bad for Aereo (1)

Monoman (8745) | about 3 months ago | (#47431113)

Good for them for not giving up. Now they don't really have to stick with just local channels either. It will be interesting to see what the cable companies do to compete if Aereo starts doing well.

What about the ads (5, Interesting)

jandrese (485) | about 3 months ago | (#47431213)

As I understand it, if they get classified as a cable company Aero will be legally allowed to put their own ads into the stream, overwriting the ads the original broadcaster put in there or maybe removing them entirely if they still want to be an entirely subscription driven service. They could really seriously piss off some OTA broadcasters with this approach.

Re:What about the ads (1)

cdrudge (68377) | about 3 months ago | (#47432031)

Where do you understand that from? AFAIK cable companies don't insert ads into the local networks (ABC, CBS, NBC, Fox, etc). They do insert ads into "cable channels" but those ad slots are specifically designed for the cable companies to sell ad space for. There may be a default commercial that plays for the national feed, but it can be overlaid with a local ad if the slot sells.

Re:What about the ads (1)

jandrese (485) | about 3 months ago | (#47432341)

I understood it to be the entire reason they have to pay fees to rebroadcast the material: because they were denying ad revenue to the broadcasters.

Re: What about the ads (2, Interesting)

Anonymous Coward | about 3 months ago | (#47432593)

You understood wrong. Multichannel providers pay the local stations who wish to be paid, and don't pay the ones who request their must-carry rights. Never does a cable company insert their own programming over a local station (except in the case of sports blackouts, and this is often done by literally blacking out the station instead of replacing it with other programming).

Plan B (0)

Anonymous Coward | about 3 months ago | (#47431355)

I thought they said they had no Plan B. Clearly they do.

Good for Aerio (0)

Anonymous Coward | about 3 months ago | (#47431369)

I think this is a good move on Aerio's part. I think broadcasters (over the air broadcasters) where the content is coming from would be much more willing to accept this solution over the previous. Aerio has absolutely NO business model without the OTA broadcasters. Cable companies can suck it. As far as I'm concerned, they have no legitimate stake in this. Aerio is not using cable companies signals and retransmitting over the internet. It is only local OTA broadcasters that suffered a loss. Now that Aerio has agreed to pay royalties for the content they are delivering they should be much more agreeable. Aerio still won't be able to broadcast ESPN or Disney channel... because those are only available on cable. Not free OTA. So if the cable companies are upset.... boo hoo, cry me a river.

Cable companies welcome Aereo to the fold! (1)

ZipK (1051658) | about 3 months ago | (#47431547)

The broadcasters are not happy with this move, of course, claiming that Aereo should not be allowed to flip-flop on how it defines itself.

Which, of course, Aereo didn't. The broadcasters and the supreme court defined Aereo, and Aereo's is just working within the space in which they were confined by the law.

Does not matter to me (2)

paiute (550198) | about 3 months ago | (#47431639)

The reason I subscribed to Aereo was that it was cheap enough that those few times I wanted to watch local TV on my tablet were reasonable. If they raise their rates, I will just go out and buy an HD antenna of my own and not pay them anymore.

Re:Does not matter to me (1)

HornWumpus (783565) | about 3 months ago | (#47432129)

HD antennas are just UHF antennas. Don't be a sucker.

"flip-flop"? (1)

Anonymous Coward | about 3 months ago | (#47431939)

"...claiming that Aereo should not be allowed to flip-flop on how it defines itself."

They're not CHOOSING to flip-flop. They were ORDERED to. By the Supreme Court of the United States.

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