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Aereo Gets OK From Bankruptcy Court To Auction Technology Assets

Posted by samzenpus on from the everything-must-go dept.

An anonymous reader writes Judge Sean Lane of the U.S. Bankruptcy Court in Manhattan gave permission to Aereo to sell its remaining assets to the highest bidder. The decision came after Aereo reached an agreement with the major broadcast networks that are suing the service. From the article: "Now a bankruptcy court in New York has granted Aereo permission to sell off its assets, with one big caveat: those angry broadcasters who shut them down in the first place? They get to approve any sales that go down. The auction will take place on February 24, at which point the broadcasters have two weeks to decide if they're okay with the highest bidder."

42 comments

  1. wow by Anonymous Coward · · Score: 2, Insightful

    so this means the broadcasters can approve a lowballed sale from their own subsidiary and then offer the same service as the now defunct aereo. status quo will remain status quo

    1. Re: wow by Anonymous Coward · · Score: 0

      In theory, the court has to approve the sale, so that won't be an issue...in theory. In reality, the major media outlets control America. If you don't believe me, watch international news and compare to find what doesn't fit the narrative.

    2. Re: wow by Anonymous Coward · · Score: 0

      Failed loophole technology?
      What is the value of get around the law technology? Did there system have any other use?

    3. Re:wow by alexander_686 · · Score: 2

      Probably not. Think of it more of a veto. In order for one network to win the bid on a sweetheart low ball bid – which implies free money - all of the other networks would have to agree. What is the chance of that happening? Zero. The networks are competitors of each other. They would rather see the assets destroyed and burned than one of their competitors getting a free lunch.

    4. Re:wow by tlhIngan · · Score: 1

      They would rather see the assets destroyed and burned than one of their competitors getting a free lunch.

      True, but the bankruptcy court is also working for the interest of creditors.

      Just because the networks have veto power doesn't mean the courts can't overrule that. If a good bid comes in that gets vetoed and no one else puts in as good a bid, the courts may just allow the sale because their job is to recover as much money as possible.

      So yeah, the networks may veto an all out buy to set up Aereo 2, but if another one comes in to buy bits of equipment and such of similar value, they may not have their veto respected especially if the courts can't recover similar value elsewhere.

    5. Re: wow by jedidiah · · Score: 1

      ANY technology is ultimately "loophole" technology. Aereo is not unique in this. People will sell anything to anyone as long as it makes them a buck and doesn't get them arrested. Even an arrest might not slow some people down.

      That's capitalism.

      Agile rats try to outmanuver lumbering dinosaurs.

      --
      A Pirate and a Puritan look the same on a balance sheet.
    6. Re:wow by nytes · · Score: 1

      I'm curious as to why the broadcasters were given any voice over the sale.

      I would think that the court would allow any sale to go through that would maximize the funds available to pay off Aereo's creditors, whether or not the broadcasters are considered to be among those creditors.

      --
      -- I have monkeys in my pants.
    7. Re:wow by Obfuscant · · Score: 1

      I'm curious as to why the broadcasters were given any voice over the sale. I would think that the court would allow any sale to go through that would maximize the funds available to pay off Aereo's creditors,

      While conspiracy theories are common for /., it is more likely that the low-ball bids will come from groups who want to set up competition without spending a lot of money, or to just get a lot of cheap hardware for other uses. The veto is to allow the people who are owed the money to keep the sale price reasonable, not to guarantee that they themselves can buy it for $1. I.e., it is intended to maximize the funds, not minimize them.

    8. Re:wow by nytes · · Score: 1

      The veto is to allow the people who are owed the money to keep the sale price reasonable, not to guarantee that they themselves can buy it for $1.

      Then I would think that veto power would be extended to all the creditors. If it is, maybe that little tidbit was omitted because it would remove some of the zing from the article.

      --
      -- I have monkeys in my pants.
    9. Re: wow by Anonymous Coward · · Score: 1

      ANY technology is ultimately "loophole" technology.

      Precisely. The development of fire and smelting copper were just an end-run around Sumerian IP laws...

    10. Re:wow by alexander_686 · · Score: 1

      For 2 reasons.

      First, the networks are creditors. They are owed damages. Remember, this is a civil, not criminal matter. Nobody goes to jail but money is owed.

      Second, the court and networks do not want a company buying the assets then relaunching a clone version.

    11. Re: wow by ultranova · · Score: 1

      What is the value of get around the law technology?

      When the law is for sale to the highest bidder, technology that lets everyone else get around it is quite valuable indeed.

      --

      Forget magic. Any technology distinguishable from divine power is insufficiently advanced.

    12. Re:wow by Anonymous Coward · · Score: 0

      so this means the broadcasters can approve a lowballed sale from their own subsidiary and then offer the same service as the now defunct aereo. status quo will remain status quo

      Why in the world would the broadcasters want to buy millions of antennas to pick up their own signal?

  2. Nope by Anonymous Coward · · Score: 0

    Not first

  3. online DVD rental service by Anonymous Coward · · Score: 0

    So- the government basically shut Aero down on a technicality (there only being one antenna), but what if we solve that problem? Couldn't we simply rent access to the antenna and let the user connect the rented hardware?

    It sounds like the approach could work for other things besides broadcast TV. For instance what about entertainment?

    If I buy 10 DVDs the law says I can rent those out. No question about this. There were court cases with VHS tapes in the 80s I believe which concluded this. No special licenses required.

    Now what if I rented rooms with power and a computer, an internet connection, and a DVD drive, all with special software (all locked down of course). Then had rental agreements with tenants. Then I dropped in physical DVDs into those tenants rented computers upon them renting the DVD of course. Now the software on these computers enabled users to stream these movies via NBD. That is network block device. It would not bypass encryption as the software on the end users computer would still have to decrypt it and since the user was doing the streaming it should be legally OK.

    1. Re:online DVD rental service by Anonymous Coward · · Score: 1

      there only being one antenna

      No, they had one antenna per customer. They did this specifically to try to evade the existing law requiring royalty payments for CATV distributors, which originally started by putting an antenna on a mountaintop and running a cable down into the valley to sell the signal to the locals who couldn't otherwise get it through the mountain. After all, if each customer had their own personal antenna on the end of a wire then it's totally different than everyone sharing one antenna on the end of a wire, right? (oh, I forgot to add: on the internet!) The Supreme Court ruled that the number of antennas was not the deciding factor on whether you were a cable TV company or not.

    2. Re:online DVD rental service by RenderSeven · · Score: 2

      I think it sounds like a good idea, and I'd be your first customer. Then again, I thought Aereo was a good idea too, and on solid legal ground as well. I'm dumbfounded the courts shut them down, but given that they did it seems pretty clear they will shut down whatever derivative or similar business model you come up with, on whatever technicality they can get to stick. It would seem that legality or common sense or "public benefit" doesnt play as much as a role as we would like to imagine.

    3. Re:online DVD rental service by Ninety-9 · · Score: 1

      The idea was solid, but the laws are antiquated and the cable companies are greedy. Laws that would prevent me from re-broadcasting a cable signal to non-cable subscribers, or prevent me from streaming a signal over the internet to another region are what ultimately did this company in.

      From any common sense I can possibly understand, there was no moral or legal reason to shut Aereo down. If anything, the Television companies would benefit by retaining viewers. Cable is nothing more than a utility that brings you the product, the definition of stealing cable doesn't apply, here. The backwards thing is that Cable cutters aren't just eliminating the utility, they're eliminating the product. Live Television doesn't matter anymore. Waiting for your favorite TV show to come on at 7:00PM every Wednesday has become a "Back in my day" story we tell our kids.

      The cable companies own the networks and the networks are forced to participate in fast-declining business model. This is the reason why "television networks" may not be around in another 10 years.

    4. Re:online DVD rental service by Anonymous Coward · · Score: 1

      Zediva. It was already tried and shut down by the courts a couple years ago.

      https://gigaom.com/2012/03/19/zediva-liquidation-assets/
      ----
      Zediva launched [~Early 2011] with a unique proposition: The company offered to stream current-release DVD titles for $1.99 per movie – much less than customers would have to pay to VOD services like Amazon or iTunes. Zediva was able to achieve these low rates through a complex workaround: Instead of licensing the movies from Hollywood studios, it simply bought them on DVD, and then “rented” those DVDs to customers, who got to see a stream of the DVD as it played in one of Zediva’s many DVD players.

      Hollywood took the company to court, and Zediva lost. The company agreed to pay the studios $1.8 million in damages and suspended its operations in August of 2011. Its website, which at the time stated that it hoped “to be back online soon,” has since been taken offline.

    5. Re:online DVD rental service by jedidiah · · Score: 4, Interesting

      The law isn't the problem. Judges are corrupt and willing to consider inappropriate things like "will this cause the profits of a corporation to suffer" rather than just applying the law. It was a well crafted bit of technical trickery meant to follow the letter of the law.

      The court chose to ignore that. Lower courts then chose to ignore the mental gymnastics the higher court came up with.

      They changed the rules and refused to allow Aereo to change to accommodate them.

      --
      A Pirate and a Puritan look the same on a balance sheet.
    6. Re:online DVD rental service by unrtst · · Score: 1

      mod parent up.
      Rulings like those in Aareo and Zediva's cases almost make it seem like normal DVD rentals and TiVO's will be the next on the chopping block. Of course, they tried, but somehow (luckily) those won.

      Why the hell Zediva got shut down is beyond me.
      Aereo was actually more likely to be shut down than Zediva (it could be argued that Aereo put some load on the existing system to sell a rebroadcast to users that were not possible customers of said broadcasts which, while technically should have skirted the laws, was a fairly obvious attempt at getting something for nothing and charging for it while playing tricks to avoid the law). I still thought it was a good service, but it was obviously a kludge.

      Ideally, at least in my view, the content owners, or those they've licensed to, would make all their content available at a reasonable rate over the internet. The aggregation and post processing should, IMO, happen at the customer premise. Just like TiVO, but pull the streams from various sources rather than requiring cable TV, satellite TV, Hulu, Netflix, Amazon, Vudu, etc etc etc. In addition, metadata should be free (ie. tv guide data) from anyone broadcasting anything over anything - I mean, why the hell not?

      My prediction is that things will continue on what is now the obvious path. Re: see iTunes and mp3's. Essentially, some balance/semi-standard will be set for cost-per-show and cost-per-movie, and a handful of big companies will get access to nearly the entire library, and people will cut back on pirating and kludges such as aereo will no longer be profitable. And yes, dvd sales will drop as quickly as cd sales, and cable tv subscriptions will slowly decline, but that's all just the transport medium. Cut down on cable TV subscriptions, and cable may be able to be more competitive with FiOS for internet access :-)

    7. Re:online DVD rental service by SydShamino · · Score: 1

      As I understand the law from previous readings, it is legal to rent or buy an antenna and install it on land you rent or own, but it is not legal to rent or buy access to an antenna on land you neither rent nor own.

      Think of the scenario of living at the bottom of a hill that blocks access to all the TV signals from the nearby town. If the guy who owns the top of the hill installs an antenna and runs a cable down to your property line, he can't sell you access to that cable. Likewise, you can't buy an antenna and install it on his property, and run your own cable to your property. (As I understand the law, stupid as it may be.)

      What you might be able to do is rent 10 square feet of land on the top of the hill, and sign an access agreement to that land for you and your cable. Then you should be able to do whatever the hell you want with those ten square feet (subject to your rental agreement) including install an antenna. This wasn't aero's business model so it wasn't explored by this case. Of course, in a city there may be laws that limit where and how sub-parcels of land can be rented. I suspect someplace advertising themself as "roof top storage units with gigabit Ethernet connections) would be legal even if you happen to install an antenna and network-controlled DVR in them. Hard to know.

      --
      It doesn't hurt to be nice.
  4. Sounds good by Anonymous Coward · · Score: 0

    So long as, if they turn down the highest bidder, they then pay that bidder's offer to recycle the material

    1. Re:Sounds good by Qzukk · · Score: 2

      Given that the bankruptcy is mostly due to the lawsuit demanding that Aereo pay them a bajillion dollars, they'd basically be paying that money to themselves. If they turn down a $1 billion dollar offer for the gear, then they don't get a billion dollars, because there's no other way they're going to get this money legit.

      Personally I think the first post is the most insightful for once: they'll create a front company, put in an offer to buy the gear for $1 or whatever, reject everything else, kill off Aereo, then open CBSeo at ten times the price and half the features then when everyone quits they'll whine about piracy until the feds pass new laws giving the government more power. Wins all around! (except for us little people, but who cares about us little people?)

      --
      If I have been able to see further than others, it is because I bought a pair of binoculars.
    2. Re: Sounds good by AvitarX · · Score: 1

      But cbs owns content, they don't need aero (which was trying to distribute ota content legally, but without paying, note I think this should be legal without trickery, the content is in therory paid for with ads, more viewers is better).

      I suspect a Canadian company may buy it, if memory serves correctly, rebroadcasting unaltered content is legal in Canada.

      --
      Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
    3. Re: Sounds good by Anonymous Coward · · Score: 0

      That's probably exactly what the broadcasters would veto. They probably want to prevent rebroadcasting in Canada, and preventing a Canadian company from getting Aereo's technology is probably how they'd accomplish that.

  5. Place Your bets Everyone!! by laurencetux · · Score: 1

    Okay i can see this going down a few ways 1 at 16:55 on feb 28 the broadcasters deny the highest bidder (thus allowing ongoing expenses to suck what little value there is left out) 2 the "highest bidder" is one of A secretly the broadcasters themselves B another company that just happens to share staff with the broadcasters 3 a sudden disaster takes out the Aria location with most of the actual assets In all cases the broadcasters will within 9 months offer a service that allows Aria type functions for an actually reasonable cost. so who wants to set ODDS??

    1. Re:Place Your bets Everyone!! by Monoman · · Score: 1

      This.

      The broadcasters, FCC, and courts drove out the little guy Aereo. Now we start to hear talks about changing the laws/policies to specifically allow Aereo's type of service. Why didn't they consider this while Aereo was in business?

      --
      Keep the Classic Slashdot.
  6. fly on the wall at the auction... by swschrad · · Score: 2

    "Alright, let's get this party started. Lot Number One... a pallet cube... we have a jumble of some sort of boxes of geegaw stuff, half have power cords. there are no manuals or labelling on the devices. let's start bidding at a dollar... one dollar dollar dollar, lot 1... still one dollar... do I hear 50 cents?"

    --
    if this is supposed to be a new economy, how come they still want my old fashioned money?
    1. Re:fly on the wall at the auction... by Anonymous Coward · · Score: 0

      Perhaps we can frighten away the ghost of so many years ago...with a little illumination, gentlemen!

      *ORGAN*

  7. Tiny Antennas!?! by The+New+Guy+2.0 · · Score: 1

    According to their explanation, Aereo used "tiny antennas" to connect each customer with their content. Wonder if those are going to be sold off...

    1. Re:Tiny Antennas!?! by gnupun · · Score: 1

      Yes, there might be huge market for these tiny antennas if they work at a satisfactory distance from the OTA transmitting antennas.

    2. Re:Tiny Antennas!?! by The+New+Guy+2.0 · · Score: 1

      I need some funny points for the post I made above... Anything smaller than rabbit ears or that thing you put on the roof is too small for TV to work.

    3. Re:Tiny Antennas!?! by Anonymous Coward · · Score: 0

      Doesn't have to be... If you put it very close to the transmission tower any random wire will work. Especially with digitlal TV.

  8. They can't be abusive by alexander_686 · · Score: 2

    Do we know who the creditors are?

    I was under the impression that it was the networks. If that is the case, the primary goal won't be to extract as much cash from the corpse or (as the conspiracies in this thread suggest - which is where my post was pointed to) cheaply take over the company. Rather, it would be to drive a stake through Aereo's heart. Yes, the court is supposed to oversee the process for abuses – but somebody has to contest the issue. I just don't see anybody pushing the issue to hard.

    If there are other actors other than the networks, then there would be somebody else to contest the issue.

    1. Re:They can't be abusive by pla · · Score: 1

      Do we know who the creditors are? I was under the impression that it was the networks.

      Typically, "real" creditors take precedence over tort claimants in the US.

      In the case of Aereo, a 2019 filed recently lists Quality Investment Properties, L3 (yes, that L3), and C7, basically for providing physical space, power, and telecom services.

  9. Why Zediva got shut down? by Anonymous Coward · · Score: 1

    Zediva was shutdown because like Aero they tried to work around the laws to skip paying for a license from the content provider.

    They were purchasing regular DVDs and renting them in violation of the DVD license. Rental DVDs require a totally different license.

    Not that I agree with the licensing scheme, but just stating the reason.

    1. Re:Why Zediva got shut down? by unrtst · · Score: 2

      Zediva was shutdown because like Aero they tried to work around the laws to skip paying for a license from the content provider.

      They were purchasing regular DVDs and renting them in violation of the DVD license. Rental DVDs require a totally different license.

      [bolded by me] That part is not true AFAICT. See The Consumer Video Sales/Rental Amendment of 1983.
      In that case, the doctrine of first sale was upheld, and you can do whatever you want with something that you have legitimately acquired a copy of (ex. VHS or DVD).
      Just one of many examples:
      http://thinkprogress.org/ygles...

  10. I have no idea where you are getting your "facts" by Anonymous Coward · · Score: 0

    Because they are 100% wrong.

    The issue has NOTHING to do with antennas and everything to do with the fact that Aero was SELLING content they didn't have the rights to. They use the antenna thing as a cheap excuse to try to avoid licensing the content from the providers.

  11. What's the point by Anonymous Coward · · Score: 0

    ... two weeks to decide if they're okay with the highest bidder.

    The broadcasters aren't agreeable with the guy who has it now. How can they be agreeable to the next guy getting this 'run your own entertainment network' technology? The only people allowed to have this setup, are the broadcasters themselves. Besides, people interested in talking to a certain population will already use a broadcast/multicast technology.

  12. So selling illegal hardware OK? by Anonymous Coward · · Score: 0

    Funny, that selling illegal hardware is OK, but one wonders why anyone would buy stuff already deemed illegal to use? Maybe, some of it can be used for other things. Or cannibalized for other uses?

  13. Re:I have no idea where you are getting your "fact by SydShamino · · Score: 1

    You are a troll. DIAF and have a nice day.

    --
    It doesn't hurt to be nice.