Saturday, February 24, 2018
Business

Networks argue Internet startup Aereo is pilfering copyrighted broadcasts

WASHINGTON — An obscure Internet startup is roiling the television industry with an old-school technology: the antenna.

Aereo uses thousands of tiny antennas to capture broadcast television programs, then converts the shows into online video streams for subscribers in 11 cities. What Aereo doesn't do is pay licensing fees to the broadcast networks that produce the programs, which has put Aereo at the center of a fierce debate over the reach of copyright laws, the accessibility of public airwaves and the future of television.

This week, the Supreme Court will hear arguments in a civil case filed against the 2-year-old private firm by ABC, CBS, NBC and other major broadcasters alleging that Aereo is no different from cable and satellite firms that are required to pay hefty fees to rebroadcast their shows.

"Quite simply, Aereo takes copyrighted material, profits from it and does so without compensating copyright holders," said Gordon Smith, the president of the National Association of Broadcasters.

But Aereo, which has plans to expand to Tampa, argues that it is entitled to draw freely from programs transmitted on public airwaves — an argument that, if successful, has the potential to blow apart the expensive channel bundles that have been forced on American households and radically reduce the cost of watching television.

"Aereo has a shot at changing the TV business model," said Gene Kimmelman, president of Public Knowledge and a former antitrust official at the Justice Department.

An Aereo victory could dramatically change the way people watch their favorite programs. Live sports and other shows that are available only on broadcast TV or cable television could be accessed more conveniently and cheaply over the Internet. That could lead many consumers to cut the cable cord in favor of a much cheaper alternative: a broadband Internet connection and subscriptions to Aereo, Netflix and Hulu.

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