The New York-based startup Aereo has recently been making waves in the digital television world by creating a low-cost option for consumers to watch and record live broadcast television, providing a service similar to Internet-based streaming websites such as Hulu. Aereo, however, stands apart from these services: Aereo leases to each subscriber an individual remote antenna, allowing these subscribers to view and record certain live television broadcasts on Internet-connected devices without having to purchase a subscription to the entire broadcast packages offered by cable companies.
Although Aereo has enjoyed tremendous success in the two years since its founding, Aereo has recently been embroiled in legal battles over whether its business model constitutes a public performance, which would legally require Aereo to obtain retransmission consent from the content providers. Last month, the District Court of Utah became the first to temporarily shut down the service. Judge Dale A. Kimball of the District Court of Utah granted a preliminary injunction sought by broadcasting companies such as Fox claiming that Aereo is stealing their broadcast signals for profit, shutting down Aereo’s services in Salt Lake City and Denver. Such injunctions have been previously denied in the New York and Boston.
Aereo founder and CEO Chet Kanojia states that the television industry is terrified of Aereo, and that the company was “extremely disappointed” in the recent decision. Kanojia claims that the antennas used in this service must be treated the same as antennas that people use to pull TV signals for free.
This argument rings true in one deep respect – any individual can travel to Radio Shack and upgrade their television antenna. Yet, retransmission is currently illegal, and Aereo has created a service that works around this by renting antennas and virtual connections, a method that is hanging on by a mere technicality.
Broadcasting companies such as ABC, Fox, NBC, and CBS have the highest stake in seeing Aereo fall; they currently claim that Aereo is stealing their content, and that their practice could even lead to the end of broadcast television. Major broadcasters have expressed concern that cable providers, who currently pay broadcasters to the tune of $4 billion in transmission fees per year, may set up services similar to Aereo and will no longer pay fees, depriving broadcasters of all profit.
American Broadcasting Companies v. Aereo will be heard in front of the Supreme Court in April, featuring “two American archetypes in a battle that could upend the television industry.” As the New York Times states, this decision will have “far-reaching implications for a television industry already in upheaval, facing challenges from online streaming, Internet-enabled TVs, ad-skipping devices, and now, the tiny antennas that Aereo uses to capture broadcast signals.” The Aereo issue demonstrates the fundamental difficulty in technology and law – technology is outpacing law faster than ever, while legal standards struggle to keep up with ever-evolving industries.