WASHINGTON - 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 down Aereo while litigation
moves forward. (CBSNews.com is a unit of CBS.)
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.
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.
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 Inc.
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 antenna."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 CEO Chet Kanojia said in a statement.
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 customers.
Cablevision is the fifth-largest U.S. cable provider and sold video services to 2.8 million subscribers as of Sept 30, 2013.
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.
lawsuits pitting Aereo against television providers are playing out
across the U.S., including in federal courts in New York, Massachusetts
and Utah. The Supreme Court appeal stems from the New York litigation.
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 goes forward. 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.