A Group of Broadcasters (Fox, ABC, CBS, NBC) filed a copyright infringement lawsuit in Washington DC against a similar outfit to Aereo that is also offering re-transmission services to consumers.

Fox Television is going to war with Barry Diller, the man who helped found the network. On Thursday, Fox, ABC, CBS, NBC, and several other television broadcasters filed two major copyright infringement lawsuits against Aereo, a service that's planning to launch in the New York area on March 14th to allow consumers the ability to watch broadcast television online through digital streaming.

Aereo announced it had raised $20.5 million in venture funding at a news conference last month.

In making the announcement of the forthcoming launch, Diller, who joined Aereo's board after his company IAC/InterActiveCorp provided major financial backing, told reporters that Aereo "pries over-the-air broadcast television out of [a] closed system.”

The broadcasters allege that the Aereo service infringes upon the copyright protection afforded to the content of broadcasters’ television programming.  In one lawsuit filed in New York federal court last week, the broadcasters say that the $12-a-month service will “provide unlimited streams of Plaintiffs’ television broadcasts over the Internet in direct competition with Plaintiffs.”  The broadcasters’ complaint also alleges “[c]opyright law does not permit Aereo to appropriate to itself the value of Plaintiffs’ television programming by retransmitting over the Internet without proper licenses” and “simply put, Aereo is an unauthorized Internet delivery service that is receiving, converting and retransmitting broadcast signals to its subscribers for a fee.” The broadcasters claim that statutory definitions and interpretations of a “public performance” render Aereo’s service impermissible as copyright infringement.  Currently, one group of broadcasters including Fox, Telemundo, and PBS, represented by Steven Fabrizio at Jenner & Block, is seeking a permanent injunction and statutory damages against Aereo. Another set of broadcasters including CBS, NBC, and ABC, represented by Bruce Keller at Debevoise & Plimpton, is after pretty much the same thing, though the cases are likely to be consolidated.

Broadcasters are not unfamiliar with battling companies that offer digital streaming services. In 2010, the same major broadcasters sued streaming television companies FilmOn and ivi, and were granted injunctions against both services.  Ivi’s strategy utilized Section 111 of the Copyright Act, which authorizes cable TV companies to make secondary transmissions of copyrighted works embodied in primary transmissions so long as a nominal statutory licensing fee is paid.  The Judge rejected this argument, holding “[n]o technology . . . has been allowed to take advantage of Section 111 to retransmit copyrighted programming to a national audience while not complying with the rules and regulations of the FCC and without consent of the copyright holder.”  Ivi has appealed this judgment, arguing that it only needed to pay a compulsory license fee.  The appeal will be heard at the 2nd Circuit later in March.  Broadcasters have well-founded reasons to fear the threat posed by startups like Aereo – Deloitte’s 6th edition of its report The State of the Media Democracy and other sources report a long term trend of increased “cord-cutting,” a term that refers to the choice by consumers to unsubscribe from cable services in favor of accessing programming content online.  Although current statistics are not dispositive, the proliferation of websites like Hulu has increased the usage of digital streaming services, especially for video content.

Aereo defends its service stating, “[c]onsumers are legally entitled to access broadcast television via an antenna and they are entitled to record television content for their personal use. Innovations in technology over time, from digital signals to Digital Video Recorders (“DVRs”), have made access to television easier and better for consumers. Aereo provides technology that enables consumers to use their cloud DVR and their remote antenna to record and watch the broadcast television signal to which they are entitled anywhere they are, whether on a phone, a tablet, a television or a laptop.”  The district court judge in the ivi case noted that when Congress enacted Section 111, it was doing so with an “understanding of the cable industry as a highly localized medium” and ivi’s service, in contrast, ”retransmits broadcast signals nationwide, rather than [to] specific local areas.” Alternatively, because Aereo is offering its initial service next month in New York, before expanding “a step at a time, a market at a time,” the company may avoid the pitfalls ivi encountered.  The Aereo lawsuit has the potential to provide substantive implications for the future of the Internet TV business and cord-cutting trend in the broadcast television industry.

Read More... http://www.ipbrief.net/2012/03/09/cord-cutting-culprit-fox-television-and-major-broadcasters-claim-aereo-broadcast-streaming-service-infringes-programming-copyrights/ 
and
http://www.hollywoodreporter.com/thr-esq/aereo-barry-diller-stream-tv-online-296426