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Cable Technology Feature Article

July 11, 2013

Hearst Sues Aereo in Boston for Copyright Infringement

By Tara Seals, TMCnet Contributor

Aereo, the Barry Diller-backed Web TV start-up, has so far managed to keep the law on its side as it goes through various court battles in its quest to survive copyright infringement scrutiny. A new claim has been added to the heap, however:  Hearst Stations has filed a lawsuit arguing that Aereo is violating copyright rules by illegally retransmitting the TV signal for its WCVB-TV ABC affiliate in Boston.

“Aereo has no right, under any license or statute, to retransmit WCVB’s copyrighted programming,” Hearst said in the suit, which was filed in the U.S. District Court for the District of Massachusetts. “Other companies, such as cable, satellite and other telecommunications distributors, obtain the consent of SCVB and pay WCVB to retransmit WCFB’s signal containing its programming…Aereo further free-rides on WCVB’s substantial investment in its broadcasting infrastructure.”

The $8 per month service, which offers users the ability to record and watch feeds from local TV affiliates via the Internet, originally launched in New York City in February 2012, but has since expanded to Boston and Atlanta. It also will launch in Chicago September 13 to cover 16 counties across Illinois and Indiana. Eventually, the company plans to be in 22 cities.

Aereo is getting plenty of push back from traditional providers of television, like cable TV companies as well as local TV affiliates and content companies, who say the company is delivering local broadcast feeds over the Internet without paying retransmission fees. But Aereo counters that the dime-sized antennae that it uses to deliver service technically makes it an over-the-air service, akin to rabbit ears. In an ongoing set of court challenges, the judge has so far agreed. And, if it continues to expand, it could cause real competitive trouble, according to analyst Jeff Kagan, writing in a research note last month.

“The traditional cable television industry is broken,” Kagan explained. “Prices keep rising year after year. The industry seems to have no desire to change and update. They push back on new ideas that will cut customer costs like a la carte pricing and now Aereo. The industry is backing itself into a corner and something is bound to happen that will change and transform it. Is Aereo part of that wave of change? Don’t know yet, so let’s keep our eyes on them and see what happens.”

Earlier in the year, the company won a significant court victory that could spell trouble for Hearst: the Second Circuit Court of Appeals  in New York denied an appeal motion asking for an injunction to shut Aereo down, filed by a group of 17 broadcasters. The crux of the decision held that transmissions made by consumers using the Aereo technology are not public performances under the Copyright Act.

Edited by Blaise McNamee

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