updated 03:00 pm EDT, Fri August 1, 2014
'Catch 22' generated by court, US copyright office
Aereo is "figuratively bleeding to death," according to a court filing made last night by the Supreme Court-impacted Internet video service. The filing cites "staggering costs" that it is still paying to stay alive as a business entity while the court and the US Copyright Office debate if it should be treated like a cable company, as the Supreme Court alluded in its ruling against Aereo.
"Unless it is able to resume operations in the immediate future, the company will likely not survive," said the court filing made yesterday to the Manhattan US District Court less than five hours after the federal appeals court refused to grant Aereo an injunction permitting it to operate as a cable company.
Aereo provided thousands of micro antennas for recording individual programs unique to their subscribers, rather than using a single antenna and repeating content to every subscriber. However, the company did record a program once, and replayed that recording to multiple users. In the court's opinion, Aereo operated as if it was a cable company, and should be subject to the same requirement to obtain licenses for retransmission of content.
Supreme Court Justices Breyer, Ginsburg, Kagan, Kennedy, Roberts, and Sotomayor voted in favor of the decision, with Justices Alito, Scalia, and Thomas dissenting. Aereo could opt to negotiate licenses for rebroadcast, but this would dramatically increase pricing to customers.
The US Copyright Office disagrees with the Supreme Court. It says that Aereo meets none of the wickets for rebroadcast licenses held by cable companies, as Aereo's Internet retransmissions of broadcast material "fall outside the scope of the Section 111 license." While this is bad news for Aereo, there is still some hope -- as the US Copyright Office will accept the filings "provisionally" as the case is still being debated by the courts.
The future of Aereo, and potentially the entire Internet video industry, has been jeopardized by the court's ruling and Copyright Office's denial of the ruling. The Supreme Court claims that despite the ruling, "given the limited nature of this holding, the Court does not believe its decision will discourage the emergence or use of different kinds of technologies."