* Appeals court hears arguments over Internet start-up
* Judges consider technology used in streaming service
* Aereo launched in March for New York-area customers
By Basil Katz
NEW YORK, Nov 30 Aereo Inc, an online television
venture backed by billionaire Barry Diller, was scrutinized on
Friday by U.S. appeals court judges who questioned whether the
service was stealing U.S. broadcasters' copyrighted
Broadcasters are challenging a July decision by a U.S.
district court that rejected a request for a preliminary
injunction against Aereo, a service that lets subscribers
stream live broadcasts on phones, tablet computers and other
Aereo was launched in March to New York-area subscribers for
$12 per month. The TV industry sees the service as a threat to
its ability to control subscription fees and generate
advertising income, its two main sources of revenue.
David Hosp, a lawyer for Aereo, told a three-judge panel of
the 2nd U.S. Circuit Court of Appeals on Friday that the
start-up did not violate broadcasters' rights because it was
simply a technology that allows individual consumers to decide
what to watch.
"Supplying the technology to accomplish this does not ...
constitute the direct infringement of any copyright," Hosp said.
The judges, however, asked whether the technology, a system
of miniature antennas each assigned to one subscriber, was
devised in part as a sly way to comply with copyright laws.
"It's kind of like building your business to avoid paying
taxes," said judge John Gleeson, calling Aereo a "belt and
suspenders approach" to avoid violating copyright laws.
Hosp responded that Aereo had been conceived to fall within
a 2008 decision by the 2nd Circuit in favor of Cablevision
Systems Corp for its remote-storage digital video
recorder (RS-DVR) system. The system also allowed consumers to
record programs on remote servers.
"This court decided what the law is and Aereo is following
it to a T," Hosp said.
Before Aereo's launch, broadcasters including Walt Disney
Co's ABC, CBS Corp, Comcast Corp's
NBCUniversal and News Corp's Fox filed lawsuits
accusing it of copyright violations.
In rejecting their bid for a preliminary injunction several
months ago, a federal judge said that a temporary ban "may
quickly mean the end of Aereo as a business."
The broadcasters disagree with Aereo's claims that its use
of individual antennas make the broadcasts private, since they
are available to anyone who wants to use the service. They also
say that Aereo amounts to a service that retransmits their
copyrighted programming without paying any fees.
Paul Smith, representing one group of the broadcasters,
said that if the appeals court were to allow Aereo to operate
unfettered, "everybody could engage in license free
The cases are CBS Broadcasting Inc., et al v. AEREO, Inc.
and WNET, et al v. AEREO, Inc, 2nd U.S. Circuit Court of
Appeals, Nos. 12-2807 and 12-2786.