By Harry Cole, CommLawBlog, July 10, 2014
Trying to make lemonade out of the lemon handed to it by the Supreme Court, Aereo has come up with Plan B.
The best stories never really end when you think they're going to, do they? Threes always a nifty twist that keeps the plot chugging along.
So we really didn't expect that the Supreme Court's decision was the last word in the Aereo case, did we? And right we were.
After pulling the plug on its service within a couple of days after taking a seeming knock-out punch from the Supreme Court, Aereo has come up with a plan. According to a letter filed by Aereo with Judge Alison Nathan of the U.S. District Court for the Southern District of New York (where the Aereo saga first got our attention back in 2012), Aereo is now a cable company that is entitled - by Congress, thank you very much - to retransmit over-the-air broadcast programming. As long, that is, as Aereo files the necessary "statements of account" and "royalty fees "required of cable systems. And in its letter Aereo advises that it "is proceeding" to file just those items.
Following the adage about making lemonade when handed lemons, Aereo has taken the Supreme Court's decision and tried to turn it to Aereo's advantage. Since the Supremes said that Aereo is "highly similar" to a conventional cable company, well then (according to Aereo), Aereo is a cable system and, therefore, "is entitled to a license" under Section 111 of the Copyright Act.
And even if it's not entitled to such a license, Aereo's got another argument. The Supreme Court concluded that Aereo is like a cable system because Aereo provides "near simultaneous" retransmissions of over-the-air programming. So (Aereo reasons) if Aereo's service were to be limited to delayed (i.e., not "near simultaneous") retransmissions - providing, instead, essentially an elaborate recording-and-playback service - then Aereo would no longer be like a cable system and would no longer be subject to the terms of the Supreme Court's decision. (Blogmeister's Note: Props to the Swami, Kevin Goldberg, for seeing this argument coming.)
But cable TV companies have to comply with *two* federal laws: The Copyright Act of 1976 and the Cable TV Act of 1992 Paying copyright fees might satisfy Aereo's claim to be in compliance with the Copyright Act but it doesn't bring it into compliance with the Cable Act. If the district court buys Aereo's argument this time, the broadcasters would sue them again.
Neal McLain [moderator pro tem's note: The Copyright Act requires them to pay money for the statutory license, so it's not as if it Aereo has a complete escape clause, just a costlier Plan B to try. - fg]