Aereo Embraces Ruling, Tries To Re-Classify Itself As Cable Company

An anonymous reader writes Rather than completely shuttering its TV-over-the-internet business, Aereo has decided to embrace the Supreme Court's recent decision against it. In a letter to the lower court overseeing the litigation between the company and network broadcasters, Aereo asks to be considered a cable company and to be allowed to pay royalties as such. Cable companies pay royalties to obtain a copyright statutory license under the Copyright Act to retransmit over-the-air programming, and the royalties are set by the government, not the broadcasters. The broadcasters are not happy with this move, of course, claiming that Aereo should not be allowed to flip-flop on how it defines itself.

Comments

If it looks like a duck

[Anonymous Coward]

Aereo to broadcasters: "quack".

Re:If it looks like a duck

[NotDrWho]

Maybe the broadcasters should have listened to Admiral Ackbar before they argued so persuasively that Aereo was a cable company.

Idiots

[qbast]

What the hell they are complaining about now? If court ruled that how Aereo previously defined itself was illegal, then obviously it has to change it. First they win now they complain about it?

Re:Idiots

[fuzzyfuzzyfungus]

What the hell they are complaining about now? If court ruled that how Aereo previously defined itself was illegal, then obviously it has to change it. First they win now they complain about it?

As best I can tell, they are whining because they preferred the imaginary world where the lawsuit against Aereo was actually over whether the filthy, disruptive, upstarts shoudl be burned to the ground and have the earth beneath them salted, rather than whether they were more like an antenna rental service or more like a cable company.

Aereo obviously didn't want to be a cable company, hence its ongoing defense; but the tone of the rhetoric against them was never "Yeah, because of a raft of tedious reasons, Aereo ought to be classified as a cable company for regulatory purposes"; but rather a bunch of fire and brimstone nonsense about the signal-stealing piratepocalypse.

Re:Idiots

[Simozene]

They can end free OTA broadcasting... they just need to give the wireless spectrum back to the US Government. Not going to happen.

Not Flip Flopping

[Anonymous Coward]

They aren't flip flopping at all. They're accepting the ruling against them and adjusting how they do business to remain in accordance with the court ruling.

Tough shit broadcasters. Deal with it.

Simplified summary

[cdrudge]

So a simplified summary of the issue is:

Aereo: We're not a cable company, we don't have to pay royalties.
Networks: Yes you are, you have to pay us
Aereo: No we aren't. Sue us.
Networks: Ok
Lower Courts:You're like a cable company.
Aereo: Are you sure?
SCOTUS: Yes.
Aereo: Crap. We'll be a cable company and pay the royalties then.
Networks: You're not a cable company
Aereo: C'mon man!

Re:Simplified summary

[Solandri]

Close, but what's happening here is similar to what happened with Pandora and online music broadcasters. They tried to get by by paying the same royalty rates as radio stations, which are negotiated between the RIAA and all radio broadcasters en masse. The RIAA smelled an opportunity and finangled the courts so Internet radio got defined as something new and different, and thus they could negotiate rates against a much smaller and less established entity. Consequently, Internet radio pays much higher royalties than broadcast radio.

I suspect the TV stations are trying for a similar play here. It's completely illogical (like saying you're not buying the movie, you're just buying a license to view it; but then saying you need to buy a new one at full price if you're upgrading from VHS to DVD to Blu-ray), but logic is secondary to them if there's an opportunity to extract more money from people. I think that's my biggest gripe with Copyright law - since it's a completely artificial monopoly I think the rules governing it must make logical sense in order for supply and demand to work as with natural property. But instead the copyright holders are twisting that artificiality to completely illogical means that break how markets naturally work.

So, how does this go?

[robbak]

Companies: Hey Courts, Aero is a cable company!
Aero: We really aren't.
Courts: I agree with the Companies. Aero is a cable company.
Aero: Sigh, I guess we'll have to become a cable company then.
Companies: I Object! Aero isn't a cable company!

Go Aereo!

[Simozene]

The cable companies simply want to put Aereo out of business using whatever means necessary. The SCOTUS ruling might actually be a blessing in disguise. If they can legally be classified as a cable company, and therefore obtain a compulsory license to the content, they will be able to rearchitect their entire system to make it more efficiently able to serve a large number of customers. Even after paying for the compulsory license I believe they will still be able to keep the costs way down and provide a great and inexpensive service to their users.

Re:It's only fair

[DarkOx]

Right, its a complex balance of power the networks have with the cable operators and what they really don't want is people making waves.
Just looks at the fights CBS and ABC have been in lately (NBC is a little different given they are COMCAST subsidary ).

On the one hand royalties from Areo might be a new revenue stream on the other hand premium cable seems to be where the eyeballs are going to the point the cable operators have started expressing less willingness pay to carry the networks. Its probably a smallish number of very vocal cable subscribers that push them to continue to pay CBS's extortion fees. If those folks could just pick up a cheap Areo subscription well it might actually weaken the hand of broadcast networks to charge the other cable operators. ABC has nothing to worry about though because their parent Disney will just make carrying ABC a condition of carrying ESPN which no cable operator would dare drop.

Re:It's only fair

[Mr D from 63]

If they are considered a cable company, then they won't need all those antennas. That should reduce their operating cost, and maybe offset some of the new re-transmission costs.

What about the ads

[jandrese]

As I understand it, if they get classified as a cable company Aero will be legally allowed to put their own ads into the stream, overwriting the ads the original broadcaster put in there or maybe removing them entirely if they still want to be an entirely subscription driven service. They could really seriously piss off some OTA broadcasters with this approach.

Re:It's only fair

[nedlohs]

Unsurprisingly you do not make up 100% of cable operator revenue. In fact you make up approximately 0% and hence your particular preferences mean exactly diddly squat to their decision on how to value the sports stations that drive a large portion of their revenue.

You can still sit comfortable in your knowledge of your superiority to the people who do enjoy watching sports, of course.

Re:It's only fair

[DarkOx]

Yet don't you dare encrypt anything in an amateur radio band!