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Broadcasters “unlikely to succeed” in stopping Aereo

While the dust has not entirely settled yet, it’s looking less and lees likely that broadcasters will win their court fight to shut down Aereo’s nascent Internet service as a federal judge last week denied a broadcaster-instigated motion for a preliminary injunction in the case.

Not surprising to many (given that consumers clearly want more choice in how they consume TV shows, and how much they pay for them), federal Judge Alison Nathan ruled in favor of Aereo, allowing the service to continue operations and service to its New York City customers. Aereo called the ruling is an “important milestone in the quest to increase television choice and program access for consumers.”

The judge issued the ruling in the combined cases pending in the United States District Court for the Southern District of New York. The plaintiffs include ABC, NBCU, WNET-TV, WPIX-TV, Fox, Univision and other local area broadcasters.

Broadcasters have argued that the hybrid IPTV-terrestrial transmission service (back by deep-pocketed Barry Diller) violates their copyright because Aereo didn’t get their permission to retransmit signals or pay for the content watched by Aereo’s subscribers. The judge found otherwise, saying the Aereo service was simply renting mini antennas to customers to pickup signals off the air and delivering the signal over the Internet.

Basically, the judge’s ruling found that Aereo’s small antennas function independently of each other. How consumers use those antennas was not in Aereo’s control.

“Each antenna separately receives the incoming broadcast signal, rather than functioning collectively with the other antennas or with the assistance of the shared metal substructure,” the judge’s ruling said.

“Today’s decision shows that when you are on the right side of the law, you can stand up, fight the Goliath and win,” said Chet Kanojia, Aereo’s CEO and founder. “This isn’t just a win for Aereo, it’s also a significant win for consumers who are demanding more choice and flexibility in the way they watch television.

The judge based her decision primarily on a previous Cablevision case involving remote DVRs, which the Second Circuit court of appeals found did not violate copyright protections.

The “faithful application of Cablevision requires the conclusion that Plaintiffs are unlikely to succeed on the merits of their public performance claim,” the judge said. In addition, the Court also noted that the balance of harm “certainly does not tip ‘decidedly’ in favor of plaintiffs.”

The broadcasters had also argued for an injunction that would have required consumers not to be able to watch their recorded programming until the underlying broadcast had completed airing. The Court rejected that argument finding no support for it whatsoever in either Cablevision or the Sony Betamax case.

Aereo offers New York consumers a remote antenna and remote DVR for about $12 month. Instead of being tethered only to a television set, consumers can use Aereo to watch over-the-air (OTA) programs, either live or pre-recorded, with their DVR, at home or on the go, on their portable devices.

Aereo argues that television stations’ public license to broadcast over-the-air is contingent upon their obligation to provide free broadcasts to consumers. Nonetheless, the broadcasters tried to stop Aereo because it clearly threatens their old school and increasingly tenuous business model.

In an interview with the Bloomberg website, Diller said the company would push on with marketing and deployment plans to offer the service in “most major markets” by the end of next year. Aereo said that in light of the Judge’s clear opinion that the TV landscape is changing, it hopes the broadcasters will reconsider their position.

However, broadcasters have vowed to fight on. Univision said it was “disappointed,” but will file an appeal. NBCU said the decision only represents a preliminary finding and “we remain confident” the courts will block Aereo’s service.

Consumer advocate groups, such as Public Knowledge, applauded the judge’s decision.

“The court is correct that the Cablevision precedent likely means that Aereo’s service is perfectly lawful,” said John Bergmayer, an attorney with Public Knowledge.