TV Broadcasters Looking Into Aereo-Dish Network Discussions

Charlie Ergen - House Hearing - 2001
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This week, the Wall Street Journal reported that Aereo and Dish Network had held private talks with each other. The exact nature of those talks isn't known, but TV broadcasters would like to know more.

Dish is attempting to quash subpoenas from the broadcasters.

According to a petition that was filed this week in Colorado federal court, the broadcasters are seeking information including "(i) Aereo's communications with DISH; (ii) any 'actual, contemplated, considered, or proposed' business arrangements between Aereo and DISH; and (iii) 'offers or expressions of interest' by Dish in acquiring Aereo's assets."

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Earlier this week, of course, digital TV distributor Aereo experienced a huge victory at the Second Circuit Court of Appeals, getting the circuit judges there to affirm a lower court's denial of an injunction.

The fight now continues at the trial court and both parties are engaged in a brutal discovery process.

Aereo attempted to gain all sorts of information from broadcasters in an effort to show that the harm from Aereo's technology was overstated. The company backed by Barry Diller demanded the retransmission and licensing agreements that the TV networks have signed.

Late last month, a judge would only permit a narrow request for documents.

In turn, broadcasters including Fox, WPIX, Univision and PBS are making their own demands in the discovery process to learn the other side's secrets. Broadcasters want to know more about Aereo's expansion plans as well as the company's market and competition. And now, the broadcasters are intrigued by Aereo's potential relationship with Dish.

Talks between Aereo and Dish have raised eyebrows. As this week's cover story in The Hollywood Reporter details, Dish's licensing contract with Disney expires in September and the satellite giant is faced with losing ABC. Though neither party has expressly come out and said it, there is a possibility that Dish could decide to stream ABC anyway, without a contract but in partnership with a company like Aereo.

That possibility has even become apparent to judges.

For example, in his dissenting opinion from a majority's ruling, Second Circuit judge Denny Chin wrote, "Today's decision does not merely deny the broadcasters a licensing fee for Aereo's activity; it provides a blueprint for others to avoid the Copyright Act's licensing regime altogether."

Some analysts say that even if MPVDs like Dish don't plan to go that route, it makes sense to bluff.

"With Aereo gaining legal momentum, we think it makes sense for Aereo to talk with pay TV companies," writes Paul Gallant of Guggenheim in a report. "The more that broadcasters believe cable/satellite might actually partner with Aereo, the more leverage distributors gain in future retrans negotiations."

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Dish says that any communications it has had with Aereo is off-limits for broadcasters. The company wants a Colorado court to quash the subpoena because it presents an "undue burden" and may be obtainable from Aereo. The company also says that it is improper because it seeks discovery with respect to future development plans for the Hopper, subject to pending litigation.

Finally, in a bit of a tease, Dish wants a court to reject the subpoena because it is allegedly a commercial secret.

According to a memorandum in support of a motion to quash the subpoena, "To the extent that DISH might have internally valued Aereo, assessed its impact on retransmission fees paid to the networks, or contemplated incorporating Aereo technology into DISH products, the documents would be highly confidential and proprietary."

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