March 01, 2012 4:37pm PT by Eriq Gardner
Barry Diller-Backed TV Streaming Service Sued By Broadcasters
Fox Television is going to war with Barry Diller, the man who helped found the network. On Thursday, Fox, ABC, CBS, NBC, and several other television broadcasters filed two major copyright infringement lawsuits against Aereo, a service that's planning to launch in the New York area on March 14th to allow consumers the ability to watch broadcast television online through digital streaming.
Aereo announced it had raised $20.5 million in venture funding at a news conference last month.
In making the announcement of the forthcoming launch, Diller, who joined Aereo's board after his company IAC/InterActiveCorp provided major financial backing, told reporters that Aereo "pries over-the-air broadcast television out of [a] closed system.”
A number of those over-the-air broadcasters aren't taking kindly to such a development that could greatly speed up cord-cutting among its customers.
In one lawsuit filed in New York federal court today, the broadcasters say that the $12-a-month service will "provide unlimited streams of Plaintiffs' television broadcasts over the Internet in direct competition with Plaintiffs."
Aereo says it intends to only offer the service locally, first in New York, before expanding to other markets, one at a time. The company touts thousands of tiny antennae where each subscriber will be assigned one. The company had hoped this arrangement would pass legal muster.
The broadcasters wish to test that belief in court.
"Copyright law does not permit Aereo to appropriate to itself the value of Plaintiffs' television programming by retransmitting over the Internet without proper licenses," they say in the complaint.
The broadcasters add that "no amount of technological gimmickry," such as sophisticated rabbit ears, "changes the fundamental principals of copyright law that those who wish to transmit Plaintiffs' broadcasts may do so only with Plaintiffs' authority. Simply put, Aereo is an unauthorized Internet delivery service that is receiving, converting and retransmitting broadcast signals to its subscribers for a fee."
This isn't the first time that broadcasters have objected to upstart tech companies attempting to digitally stream broadcasts. In 2010, all the major broadcasters sued FilmOn and ivi, two services that both felt they were clear from copyright challenges before ending up on the wrong end of injunctions. A judge's order to shut down ivi, which attempted to argue that it only needed to pay a compulsory license fee, was appealed and will be the subject of a hearing at the 2nd Circuit later this month. The ruling might impact this new case against Aereo.
In the lawsuit, the broadcasters say that Aereo has not permitted them to see its systems in action. Nevertheless, they find fault in what the company says it's going to be doing, and point to statutory definitions and interpretations of a "public performance" in making the case that the company can't go forward.
One pair of broadcasters including Fox, Telemundo, and PBS, represented by Steven Fabrizio at Jenner & Block, are seeking a permanent injunction and statutory damages against Aereo. Another pair of broadcasters including CBS, NBC, and ABC, represented by Bruce Keller at Debevoise & Plimpton, are after pretty much the same thing. (The cases are likely to be consolidated.)
Aereo gave us a statement that was also posted on the company's blog. It reads:
"Today, two groups of broadcasters filed two separate federal lawsuits against Aereo in the Southern District of New York claiming that Aereo will infringe their copyrights by making available technology which enables consumers to access broadcast television via a remote antenna and DVR. Aereo does not believe that the broadcasters’ position has any merit and it very much looks forward to a full and fair airing of the issues.
Consumers are legally entitled to access broadcast television via an antenna and they are entitled to record television content for their personal use. Innovations in technology over time, from digital signals to Digital Video Recorders (“DVRs”), have made access to television easier and better for consumers. Aereo provides technology that enables consumers to use their cloud DVR and their remote antenna to record and watch the broadcast television signal to which they are entitled anywhere they are, whether on a phone, a tablet, a television or a laptop.
Aereo looks forward to its upcoming product launch as well as a prompt resolution of these cases."