Aereo’s Day in (Appeals) Court

'Antenna-rental' service fights over definitions

Broadcasters asked a Manhattan appeals court to shut down Barry Diller's service Aereo on Friday. The service, they say, is retransmitting its content without a license. The lawsuit has been ongoing since March; the plaintiffs are appealing judge Alison Nathan's denial of the same motion in July.

Aereo's lawyers spent the morning in New York's Southern District Courthouse, arguing with plaintiff WNET over whether or not its service qualifies as retransmission or falls under the provisions made for offsite DVR playback offered by companies like Cablevision. The effect of Aereo's Web-based product is much the same as a streaming service like Netflix or Hulu (although without the time-delay): customers stream station broadcasts over the internet from a warehouse filled with antennas—its location unknown—that recieve the stations' signals and send it to users in New York who can't get station signals.

Today, Aereo fleshed out its argument that it is, essentially, renting New Yorkers very long cords. WNET's lawyers argued the converse—that its broadcasts constituted public performance and were thus protected by copyright. The argument, while not part of the main trial, is central to Aereo's defense: it claims that each antenna constitutes an individual copy of the broadcast, and since the ratio of antennas to consumers is claimed to be 1, each consumer has his own personal copy, just as Cablevision kept an offsite warehouse filled with servers where each customer's DVR picks were stored. The company was sued by a huge consortium of major media companies and won the case on appeal in 2008; Judge Nathan cited the case during the original motion.

The panel of three judges reviewing the case on Friday included Denny Chin, who ruled against Cablevision originally, as well as Christopher Droney and John Gleeson, who appeared to think that Aereo's business model itself indicated something suspicous. "You're using this fiction of going through all these little antennas when you'd much rather just use one [antenna]," Gleeson said. "Why?" 

R. David Hosp, Aereo's council, started into an argument about the legal merits of the many antennas, when Gleeson interrupted him: "You don't have all these little antennas because it makes any sense. It's like tax avoidance, as opposed to tax evasion. It's a belt-and-suspenders approach to the Copyright Act."

"The reason you have all these little antennas is simple: to avoid copyright violations.”

Whether that strategy will be successful is still up for debate. The ruling will likely come quickly, since the appeal was expedited, so check back with us for updates.