Barry Diller tells Congress that Aereo has a right to broadcast TV content online

Broadcasters and cable operators have a formidable opponent who took his case for Internet broadcasting directly to Congress this week.

Barry Diller, the movie and television mogul who heads IAC/InterActiveCorp, told lawmakers there is room for everyone in web video broadcasting and that the established players should move over and not hinder newcomers from offering online programming.

Diller testified at a hearing this week before the Senate Commerce Committee (entitled “The Emergence of Online Video: Is It The Future?”) as a financial backer of Aereo, a new subscription service that allows viewers to watch or record local broadcast programs on any personal computer or mobile device for $12 a month.

The very existence of Aereo has caused heated debate within the traditional terrestrial broadcast industry. Several networks and broadcasters have sued the new service for alleged copyright infringement for retransmitting broadcast signals without permission.

“Incumbents have the means and incentives to engage in economic and/or technical discrimination against online video distributors,” Diller said, adding that Congress should “prevent cable and telecommunications companies from leveraging their dominance in existing markets” to control emerging markets.

Diller said the future of online video is “simply ’more,’”—more content, more choice, more control and more online access to broadcast TV signals. He described Aereo as simply outsourcing access to an antenna and DVR. Consumers, he argued, have a right to such access to over-the-air broadcasts via such an antenna.

Diller talked about the future of video as online and on demand, but he also made the case for the value of the broadcast signals his service is delivering, particularly when compared to cable.

“While innovation and competition can and should flourish in the online environment,” he said, “it is important to protect and preserve the consumer’s right to access free over-the-air broadcast television. Even with the rise of cable channels and networks, the most popular television programming remains that which is distributed by the major broadcast networks. The four largest broadcast networks attract eight to 12 million viewers each, whereas the most popular cable networks typically attract approximately two million viewers each.”

The hearing was mostly informational for lawmakers, who aren’t yet considering specific legislation. Also testifying were Susan Whiting, Vice Chairman, The Nielsen Company, Paul Misener, Vice President for Global Public Policy,, and Blair Westlake, Corporate Vice President, Media & Entertainment Group, Microsoft Corporation. They all said that millions of Americans are already watching television and movies online.

Nielsen’s Whiting testified that the average American currently spends about 146 hours a month watching traditional TV and about 4.5 hours each watching Internet videos on PCs and mobile devices. “What has emerged in the last four to five years is a simple message: consumers watch their favorite content on the best screen available at that moment,” she said.