Akamai - leaderboard - 11-5-17
  • Broadcasters and Aereo Head to the Supremes: Nothing But Heartaches?

    When we last left Aereo in its battles with the broadcast TV networks, our trusty (or not so trusty - it's complicated) over-the-top service was in the midst of a maelstrom of litigation and new market rollouts.  The dynamic has only gotten more heated, highlighted by the broadcasters' petition for relief from the U.S. Supreme Court filed just over a week ago.

    For all of the attention of the broadcasters petition to the Court, the finish line here is far from in sight. The Court is not obligated to take this case, and in fact grants less than 2% of all 'cert' petitions.  The broadcasters are seeking resolution of what they say is a 'split' among Circuit Courts, which is certainly a well-established basis for the Court to step in. Yet to date no other appellate court has ruled in opposition to the 2d Circuit - only other lower district courts.  So while I would fully expect the Court to eventually take this case, the timing may not be ripe in their eyes. So we may well be back to sorting through the continuing morass for some time.  So what is happening in the hinterlands?

    Last May the U.S. 2d Circuit Court of Appeals rejected the attempt by the largest broadcast television networks to halt the operation of the Aereo service.  But far from solving the riddle of Aereo’s legality under copyright law, that decision simply added to the spreading bonfire. There are a total of 11 federal Circuit Courts of Appeal in the U.S., and today a full 5 of them have ongoing court proceedings that directly or indirectly implicate the legality of not just Aereo’s business but of any entity that might seek to provide consumers with over the top access to broadcast network programming without permission.  

    A quick rundown of current litigation demonstrates some of the legal complexities and uncertainties.  For example, in addition to its victory in the 2d Circuit, Aereo most recently won a big victory and prevented shutting down its service in Boston. The U.S. District Court for the District of Massachusetts (part of the 1st Circuit) followed the legal logic of the 2d Circuit and held that halting Aereo's service was not warranted at least until a final resolution of the legal issues.  Thus Aereo at least for now has been given the legal green light throughout New England and Puerto Rico as well as New York. National and local broadcasters opened another front against Aereo in the District Court for Utah (10th Circuit), but the court there has not yet ruled.
     
    By comparison, the broadcasters have fared better in proceedings elsewhere, where the broadcasters are not battling Aereo, but FilmOn X (formerly known as Aereokiller, aka 'barrydriller.com'), a more 'roguish' actor on the OTT stage. The U.S. District Court for the Central District of California (Los Angeles) halted the operation of FilmOn X throughout the 9th Circuit in 2012.  This case is now on appeal to the 9th Circuit (that court heard oral arguments, but has not yet rendered its decision).  And in the District of Columbia federal court (the D.C. Circuit), the judge not only held in favor of the broadcasters but issued an injunction to prevent FilmOn X from operating everywhere in the country other than in the 2d Circuit.   And only yesterday FilmOn X admitted that even after this ban, it tested its service in the Boston area, in violation of the D.C. decision, thus further highlighting the divergence of approach in the 1st and D.C. Circuits.  

    Wow…this is such a mess that Congress will obviously step in and clarify the important public policy issues here…right? Uh….never mind.

    Meanwhile on the business front it has been more or less full speed ahead for Aereo.  In addition to metropolitan New York City, the service is now available in Boston, Atlanta, Houston, Dallas and Utah, and nothing would indicate that Aereo has backed off from its plan to hit another 15 plus markets including Chicago, Denver, Detroit, Minneapolis and Philadelphia. From a technology perspective, the company expanded its mobile availability beyond iOS platforms by launching last week on Android as well.   

    The more opaque question surrounding Aereo is how is the service is actually performing? Aereo has not released subscriber or revenue numbers (they typically offer a free trial period to start), so other than buzz its market impact if any is difficult to discern.  About the only thing we know for sure is that the battles - judicial, political and business - will continue for some time to come.

    Howard Homonoff is Principal/Managing Director of Homonoff Media Group LLC, a management consulting firm focused on traditional and digital media content distribution, social media analytics and regulatory strategy. He is a frequent industry speaker and producer/host of Media Reporter, carried on cable systems throughout New York City. He can be found at www.homonoffmedia.com.

     
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