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In a further setback for its business operations, US copyright officials have informed Internet TV streaming service Aereo that they do not consider it to be a ‘cable company’ under the terms of copyright law.
Aereo suspended its operations June 28 following the Supreme Court copyright decision in favour of US broadcasters and has suggested that after the Supreme Court’s decision, Aereo should be recognised as a cable system with respect to its method of transmission and licensed as such, paying appropriate fees.
Accordingly, it sought the same licence available to other cable companies to rebroadcast TV programmes over its antenna-based service.
“In the view of the Copyright Office, Internet retransmissions of broadcast television fall outside the scope of the Section 111 licence,” wrote the Copyright Office in its response to Aereo’s Section 111 Statement of Account Filing, adding that it did not see anything in the Supreme Court’s recent decision in American Broadcasting Cos. v. Aereo Inc. that would alter its conclusion.
Nevertheless, the Copyright Office confirmed it will accept Aereo’s filings on a provisional basis because Aereo has also put the issue before federal court in New York. “Aereo should be aware that, depending upon further regulatory or judicial developments, and/or based upon the Office’s own further review of the issue, the Office may subsequently determine that it is appropriate to take definitive action on Aereo’s filings, which could include rejection of the statements,” it advised.
Other online video services have sought to leverage the compulsory licence argument before. Alki David-backed FilmOn.com Inc. and Ivi, which both operated Internet streaming services, contended that they should qualify for the compulsory copyright licence available to cable systems. Ivi lost and closed down, while FilmOn has developed new ‘Teleporter’ technology.
FilmOn has suggested that the Supreme Court decision – taken at first as a defeat of cord cutting and innovation in television – in fact contained a hidden boon for FilmOn Networks and other streaming TV services. “By defining the services as Cable Companies, they provide a path to finally change the way consumers get their television and cut the cord without losing out on key programming,” it said, suggesting that in delivering the Supreme Court’s opinion, Justice Breyer defined companies such as FilmOn as ‘Cable Companies’, meaning they would fall under the Copyright Act of 1976 which states, in section 111, that it is compulsory for the networks to provide their signals to cable carriers for a fee. Congress established, “a program of compulsory copyright licensing that permits cable systems to retransmit distant broadcast signals without securing permission from the copyright owner and, in turn, requires each system to pay royalty fees to a central royalty fund based on a percentage of its gross revenues.” – Capital Cities Cable Inc v. Crisp, 467 U.S. 691, 709 (1984).
Breyer said in the opinion: “Aereo’s activities are substantially similar to those of the CATV companies that Congress amended the law to reach.” The likeness is called ‘overwhelming and explained in great detail. In fact, the opinion uses the sameness between the streaming TV services and cable systems as the very anchor of its argument, noted FilmOn.
According to the Copyright Act, the Networks cannot pick and choose who they like and don’t like because it is a duty to offer their signals – which is part of the privilege of using the public owned airwaves, advised FilmOn.
David said that he had always said this was an acceptable alternative path. “Consumers get the TV they want on their own terms, advertisers get a vast new segment of viewers they have no access to now, and the Networks win too by getting the fees I have always been willing to pay,” he confirmed.
David told advanced-television.com that at first, he was disappointed – even a little angry at the Supreme Court decision but after having read it, he realised that there was “Solomon’s Wisdom” in its opinion. “Now there is a real opportunity for the unbundling of cable television. Few to none of the cable companies in the US are making money on television anyway this is fact, Now the door is open for more efficient platforms like FilmOn to offer consumers choice without being forced to buy channels that they will never watch,” he stated.