Since mogul Barry Diller and other venture capitalists launched Aereo in February, 2012, it has been a television industry bogey-man and “bad guy,” the legal bane of media companies, winning two key federal court decisions in New York and defeating lawsuits by twelve broadcasters over claims of copyright violations. Major networks such as CBS, NBC and FOX see Aereo’s business model — retransmitting live television content through its small antennas without paying any licensing fees to broadcasters — threatening traditional means of content distribution and revenue generation; the broadcasters had gotten backing in their battle with Aereo from their distribution partners like Time Warner Cable and Comcast.
But as the tech site The Verge has noted, Time Warner Cable and Comcast have shown recent shifts in attitude toward Aereo, possibly strengthening its legal arguments as it seeks to expand into new cities:
- As part of its battle with CBS over retransmission fees, Time Warner has turned to an Aereo-based bargaining tool, threatening to encourage subscribers to try online streams of network broadcasts. The cable provider sprung this tactic after failing to reach a deal with CBS over carrying its shows and facing a possible blackout of network programming. While the two sides continue to negotiate and have averted a worst-case scenario, thus far, this situation is similar to last year’s stand-off when Viacom blacked out its channels for 20 million Direct TV customers until the two companies reached an agreement.
- As it starts up a cloud-based digital video recording service, Comcast has not sought new licenses from programmers and is relying on a legal strategy that some analysts see benefiting Aereo. That’s because Comcast, in its new venture, reportedly is relying on the U.S. Court of Appeals for the Second Circuit decision in Cartoon Network, et al., v. CSC Holdings, Inc., and Cablevision Systems Corp. There, the appellate court in New York ruled that Cablevision’s DVR system did not directly infringe on copyrights when customers used it to copy broadcasts. Cablevision also played a key and controversial part of the Second Circuit decision favoring Aereo. And others’ reliance on it offers indirect endorsement of the Aereo argument for the legality of its service, which it is expanding to Salt Lake City and Chicago; it’s already up and running in New York, Boston and Atlanta. In reaction to The Verge article, Comcast said in a statement: “We think the courts will ultimately agree that Aereo must follow the rules the Congress has established for all businesses that retransmit broadcast signals for a profit. We also believe that these same legal rules permit platforms that properly license programming to provide their customers with the efficiency of a network DVR. In our view, the courts will ultimately conclude both of these positions are compelled by current copyright law.”