By Lawrence Hurley
WASHINGTON Jan 10 The U.S. Supreme Court on
Friday agreed to hear a closely watched appeal filed by the four
major broadcasters against an online television service, Aereo
Inc, backed by media mogul Barry Diller that they claim steals
copyright TV content.
Walt Disney Co's ABC network, CBS Broadcasting
Inc, Comcast Corp's NBCUniversal and
Twenty-First Century Fox Inc appealed a decision by the
2nd U.S. Circuit Court of Appeals in April that denied their
request to shut Aereo down while litigation moves forward.
Aereo, backed by Diller's IAC/InterActiveCorp,
charges users a low monthly fee to watch live or recorded
broadcast TV channels on computers or mobile devices. Aereo does
not pay the broadcasters.
In a relatively unusual step, Aereo urged the high court to
hear the case even though it won in the lower court because it
would like a definitive answer on the issue.
The Supreme Court said in a brief order issued on the case
on Friday that Justice Samuel Alito will not participate in it.
The court generally does not disclose why justices are recused.
A ruling is expected by the end of June.
Aereo subscribers can stream live broadcasts of TV channels
on mobile devices using miniature antennas, each assigned to one
subscriber. The service was launched in March 2012 in the New
York area. The company has since expanded to about 10 cities and
plans to enter several more.
The broadcasters claim the service violates their copyrights
on the television programs and represents a threat to their
ability to control subscription fees and generate advertising.
Among those filing court papers in support of the broadcasts
are the National Football League, Major League Baseball and
various media companies, including Metro-Goldwyn-Mayer Studios
CBS said in a statement on Friday that Aereo's business
model is "built on stealing the creative content of others."
Aereo counters that its service does nothing more than
provide users what they could obtain with a personal television
"We believe that consumers have a right to use an antenna to
access over-the-air television and to make personal recordings
of those broadcasts," Aereo Chief Executive Officer Chet Kanojia
said in a statement.
The case is closely watched throughout the television
industry. Cablevision Systems Corp, for example, has
said the legal theory advanced by broadcasters to the high court
would spell trouble for cloud-based content services and
threaten Cablevision's ability to offer DVR recording to its
Cablevision is the fifth-largest U.S. cable provider and
sold video services to 2.8 million subscribers as of Sept 30,
"Cablevision remains confident that while the Aereo service
violates copyright, the Supreme Court will find persuasive
grounds for invalidating Aereo without relying on the
broadcasters' overreaching - and wrong - copyright arguments
that challenge the legal underpinning of all cloud-based
services," the company said in a statement.
Several lawsuits pitting Aereo against television providers
are playing out across the United States, including in federal
courts in New York, Massachusetts and Utah. The Supreme Court
appeal stems from the New York litigation.
While the broadcasters have not had success so far against
Aereo, they did persuade a California federal court to force
Aereo competitor FilmOn X to shut down while a lawsuit there
A district court judge in Washington also ruled in September
that FilmOn X must cease to operate everywhere in the country
while the lawsuit brought by broadcasters there moves forward.
Gordon Smith, president of the National Association of
Broadcasters, welcomed the Supreme Court's intervention.
"Enshrined in the Constitution is the concept that content
creators deserve to be protected from product theft," he said in
a statement. We look forward to the resolution of this case."
The case is American Broadcasting Companies Inc, et al, v.
Aereo Inc, U.S. Supreme Court, 13-461.