Aereo asserts ‘lawful’ biz model

Diller-backed service files counterclaim to b'casters' lawsuit

Aereo, the startup that plans to offer Internet streams of broadcast stations, is seeking a court ruling that its service is legal.

The company, which plans to start service on Wednesday in the New York area, was sued by broadcast stations and TV networks on March 1. In two separate suits filed in federal court in Manhattan, the broadcasters claimed that Aereo violated the Copyright Act’s right to public performance, since Aereo has not obtained their consent.

In a counterclaim filed Monday, Aereo says that “settled law” established “conclusively that Aereo’s business is entirely lawful.”

Aereo captures broadcast signals via dime-sized antennas for each subscriber, and the signals are streamed over the Internet and to mobile devices. It also offers access to a remote-storage DVR, through which customers can play back their own previously recorded programs.

“When a consumer is accessing broadcast television using the Aereo technology, he or she is using a specific individual antenna that is tuned and used only by that consumer for the duration of that access,” Aereo said in its filing, adding that the company “simply provides to its members the convenience of locating at a remote facility the type of equipment they could otherwise have an use at home.”

The company is advertising that with its service, consumers “can now watch live, broadcast television online. On devices you already have. No cable required.”

Aereo cited two major court decisions to bolster its case: the Supreme Court’s 1984 Sony Betamax decision, which found that consumers were not infringing on copyrights when making copies of TV shows for individual use, and the 2nd Circuit Court of Appeals’ 2008 decision in the case of Cartoon Network, et. al. vs. CSC Holdings, which found that Cablevision’s service of remote-storage DVRs did not violate studios and networks’ right to public performance.

“Consumers use the Aereo technology to do no more than what they are entitled to do: access local television broadcasts on the public airwaves using an individual antenna; create unique copies of that broadcast content for their own personal use; and play back their unique recordings to their televisions or other viewing devices for their personal use,” Aereo’s filing states.

The networks argue that what Aereo is doing is retransmitting broadcasts to subscribers, a violation of the Copyright Act, and that it threatens to undermine the lucrative fees stations collect from cable operators to carry their signals. Other startups that have sought to stream broadcast signals have been stopped by federal courts.

Aereo is charging $12 a month for its service, and investors include Barry Diller’s IAC.

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