Broadcasters Ask Appeals Court to Review Ruling that Allows Aereo to Operate During Trial
TV broadcasters and some program suppliers asked a federal appeals court to review a lower court’s decision that will let Aereo continue offering its services while its legality is litigated, a court filing shows. WNET, Fox TV stations, Twentieth Century Fox, WPIX, Univision and PBS said they appealed U.S. District Judge Alison Nathan’s ruling denying their motion for an injunction and called Nathan’s decision “a loss for the entire creative community.” Comcast’s NBCUniversal also said it plans to appeal the ruling. “Importantly, the court determined that Aereo’s business is irreparably harming broadcasters and content creators,” a spokesman for NBCU said. The decision “represents only a preliminary finding and we remain confident that the courts will ultimately find in our favor and block Aereo from infringing our copyrighted broadcasts."
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Nathan’s ruling on the injunction was “unusually comprehensive” and indicates that the broadcasters may have a hard time winning their case before her in the Southern District of New York, Guggenheim Partners analyst Paul Gallant wrote in a note to investors. But the 2nd U.S. Circuit Court of Appeals, which set the precedent for Nathan’s ruling with its decision in the Cartoon Network v. Cablevision dispute over remote-storage DVRs, could be more favorable to broadcasters, he said. For instance, Nathan wrote she was bound by the Cablevision decision to rule for Aereo, but the appeals court could revise that decision, Gallant said. Moreover, Nathan’s conclusion that Aereo would cause “irreparable harm” on broadcasters “gives the Court of Appeals an opportunity to distinguish Aereo (as potentially unlawful due to the economic harm to broadcasters) from Cablevision’s remote DVR service,” where economic harm wasn’t alleged, he wrote.
But because there has yet to be a trial, the appeals court won’t completely resolve the dispute in acting on the plaintiffs’ appeal, Gallant said. “The second -- and more likely -- opportunity for the Court of Appeals to render a final verdict on Aereo is after a full lower court trial,” he said. That would make the second half of 2013 the soonest possible resolution to the issue, he said.
The ruling will probably increase the urgency of broadcasters and other media companies to figure out an online video solution of their own, said Jack Perry, CEO of Syncbak, which markets a copyright-friendly solution. When rulings “like yesterday’s happen I sit in my office and field phone calls and say ‘Yep, we can help,'” Perry said.
Aereo’s service won’t be much of a threat to the TV industry, Wells Fargo analyst Marci Ryvicker wrote in a note to investors. “We tested the Aereo product and did not find it compelling,” she said. “Therefore, we do not see this as a real threat to the TV ecosystem.”