Broadcasters don't like "tiny antennas," sue TV streaming startup

A coalition of major broadcasters has sued Aereo, a well-funded startup that hopes to offer New York residents television broadcasts streamed over the Internet. The broadcasters argue Aereo’s business model violates their copyrights.

Aereo has a clever legal argument. Rather than capturing content with a single antenna, Aereo plans to have enough tiny physical antennas in its server room that each active user can be assigned his own personal antenna. Aereo claims it is effectively letting each customer use a “remote TV” whose antenna just happens to be located far away from its screen.

Ars Technica asked James Grimmelmann, a copyright scholar at New York Law School, to evaluate the case. While Grimmelmann thinks Aereo’s convoluted business model wouldn’t be necessary in a sane copyright system, he believes that the company has a good chance of winning in court.

Grimmelmann told us that the case is likely to hinge on a 2008 ruling that is emerging as a legal foundation for a number of innovative new business models. In that case, a federal appeals court ruled that Cablevision did not infringe copyright when it created a “remote DVR” system in which the physical DVR hardware was located in a Cablevision server room rather than the customer’s living room.

Cablevision argued that it wasn’t vulnerable to copyright infringement claims because the user, not Cablevision, was ultimately in control of which programs were recorded and played back using the system. The court agreed, and its reasoning depended on the fact that Cablevision stored a separate physical copy of a program for each user who requested it, rather than storing a single copy and streaming that copy to every user.

The thousands of tiny antennas in Aereo’s server room is intended as an analogy to the thousands of redundant copies of TV programs created by Cablevision’s remote DVR system. And Grimmelmann said the courts might buy it. He also suggested that Aereo’s plan to limit the initial service to New York residents will strengthen the company’s case. The company can argue that its customers are getting access to content they would already have access to on their TV if not for signal-strength problems.

Aereo could also argue, as competitor ivi did a year ago, that it is a cable company, and therefore eligible for a compulsory licensing regime Congress created to allow cable companies to re-transmit television broadcasts. But that argument went down in flames when ivi used it, and Grimmelmann predicts Aereo won’t try to resurrect it.

“I’m surprisingly willing to believe that this might work,” Grimmelmann said of Aereo’s case. Given the close analogy to Cablevision decision, he said, Aereo has a “non-laughable case.”