Aereo Hits Roadblock in Effort to Become Cable System

After the U.S. Copyright Office says it won't process the tech upstart's paperwork, Aereo will need to get support from a federal court or the FCC before its efforts to pay statutory license fees for secondary transmissions are processed.
Aereo CEO Chet Kanojia

The U.S. Copyright Office has told Aereo in a letter that it won't process the upstart tech company's paperwork aimed at paying a statutory license as a cable operator.

After Aereo's defeat at the U.S. Supreme Court last month, the company signaled its newfound posture as a cable system. Previously the company maintained that it was merely a provider of equipment allowing its users to receive over-the-air broadcast transmissions on digital devices. But after the high court likened the service to a cable company, Aereo decided to move completely in that direction by calling itself one.

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Section 111 of the Copyright Act established a compulsory licensing system under which cable systems may make secondary transmissions of copyrighted works.

Other digital TV upstarts like Ivi and FilmOn have previously attempted to wrap themselves in the Section 111 banner, but in August 2012, the 2nd U.S. Circuit Court of Appeals ruled that "Congress has not codified a statutory provision for Internet retransmissions."

Aereo's interpreted the Supreme Court's decision to mean that the Ivi precedent had been overruled, but the Copyright Office points to the Ivi ruling's holding that Section 111 is meant to encompass "localized retransmission services" that are "regulated as cable systems by the FCC."

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"We do not see anything in the Supreme Court's recent decision ... that would alter this conclusion," writes Copyright Office general counsel Jacqueline Charlesworth.

As a result, the $5,310.74 that Aereo attempted to tender as its royalty and filing fees won't be processed. But with knowledge that Aereo is challenging the applicability of Section 111 for its service, the Copyright Office says it won't refuse Aereo's filings but will instead accept them on a provisional basis.

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Attention now turns to both the New York federal court, where broadcasters are fighting Aereo on the scope of an injunction, as well as the FCC, which could also be asked to weigh in on the matter.

Read the full letter from the Copyright Office to Aereo below.

Twitter: @eriqgardner