Aereo Changes Focus, Tries to Become a Cable Operator - The UpStream

Aereo Changes Focus, Tries to Become a Cable Operator

posted Sunday Jul 13, 2014 by Nicholas DiMeo

Aereo Changes Focus, Tries to Become a Cable Operator

Two weeks ago, the Supreme Court essentially killed Aereo, at least in its current business state. CEO Chet Kanojia said that the company was going to find a way to continue to operate and it appears Aereo has found that way. Now, Aereo is going to try to become a cable operator.

It started with a letter sent to US District Judge Alison Nathan on Wednesday, which explained Aereo's new path and focus.

Under the Second Circuit's precedents, Aereo was a provider of technology and equipment with respect to the near-live transmissions at issue in the preliminary injunction appeal. After the Supreme Court's decision, Aereo is a cable system with respect to those transmissions. If Aereo is a 'cable system' as that term is defined in the Copyright Act, it is eligible for a statutory license, and its transmissions may not be enjoined (preliminarily or otherwise).

So, Aereo now looks to become a cable company and is going to try and pay the necessary fees and licenses to do so. The entire letter basically outlined that new plan and that it would operate in "accordance with the terms of the Supreme Court's decision," which makes all of this very interesting. Obviously the broadcasters have already spoken up and said that this is only happening because of the ruling. CBS wrote on Wednesday that, upon hearing the news about Aereo's major business model shift, the Aereo case that's made its way back to a Manhattan federal court should be dismissed.

Aereo's refusal to clearly specify whether, when and in what fashion it intends to continue operating. Aereo never before pled (much less litigated) Section 111 as an affirmative defense. Whatever Aereo may say about its rationale for raising it now, it is astonishing for Aereo to contend the Supreme Court's decision automatically transformed Aereo into a 'cable system' under Section 111 given its prior statements to this Court and the Supreme Court.

Many analysts predicted this case was far from over, and they were completely right. Several people, including myself, predicted that Aereo would try and claim a different stance and go the cable operator route, and it appears all of that has come to fruition. Now, whether or not that actually happens is a whole other thing to deal with. Naturally, we'll have the updates as they occur but for now, you can read the joint letter that was filed to the courts in the source link below.


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