December 12, 2013 / 6:45 PM / in 4 years

Cablevision says broadcasters overreaching in Aereo case

Dec 12 (Reuters) - Cablevision Systems Corp said on Thursday that broadcast networks are seeking a “radical” legal ruling that would spell trouble for cloud-based content services and threaten Cablevision’s ability to offer DVR recording to its customers.

The position taken by Cablevision is the latest development in hard-fought litigation involving Aereo, an online television venture backed by Barry Diller, as well as broadcast networks and cable providers.

Broadcasters including Walt Disney Co’s ABC and Comcast Corp’s NBCUniversal claim that Aereo’s streaming service violates their copyright. Aereo does not pay licensing fees to the broadcasters, while pay-TV operators, such as Cablevision and Comcast, shell out billions in retransmission consent fees to broadcasters.

The television industry is closely watching the case to see whether it could disrupt the traditional TV model. The industry sees Aereo and similar services as a threat to its ability to control subscription fees and generate advertising income, its two main sources of revenue.

Earlier this year a federal appeals court in New York refused to shut down Aereo, and broadcasters including ABC and NBCUniversal appealed to the U.S. Supreme Court. The high court has not yet said whether it will hear the case.

Like the broadcasters, Cablevision thinks the 2nd U.S. Circuit Court of Appeals should have ruled against Aereo. However, in a white paper released on Thursday, Cablevision argued that the broadcasters were asking the U.S. Supreme Court to go much further and undo the legal underpinnings of cloud-based content services.

Cloud-based computing refers to services that are offered remotely via the Internet.

Representatives for Comcast, CBS and Aereo declined to comment. Representatives for Walt Disney Co, CBS and Twenty-First Century Fox Inc could not immediately comment.

Subscribers to Aereo 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 at a cost to subscribers of $12 a month. The company has since expanded to about 10 cities with plans to enter several more next year.

Under U.S. law, copyright owners have the exclusive right to publicly perform their work. Broadcasters argue that Aereo’s transmissions of television programs while the programs are airing is a public performance of the broadcasters’ copyrighted works.

Earlier this year Aereo’s chief executive, Chet Kanojia, said the technology “falls square within the law” and called it “a great thing for consumers.”

According to Cablevision, broadcasters are overreaching in arguing that downloaded content should be considered public performances akin to contemporaneous live streaming. That would impose vast new liability on Cablevision’s DVR service.

“Their approach poses a fundamental threat to cloud technologies,” Cablevision said. “And it would also upset the settled distinction between downloading and streaming.”

The case in the U.S. Supreme Court is American Broadcasting Companies Inc et al. vs. Aereo Inc., 13-461.

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