Money & Business

Controversial Aereo Wins Major Association Ally

By / Oct 30, 2012 (Aereo press photo)

The Aereo service, which uses thousands of tiny antennas to offer streaming television to New York City residents, now has backing from the Consumer Electronics Association.

Thousands of tiny antennas. A major lawsuit. And now, a little support.

Our American exceptionalism and economic growth rely on innovation and we must fight legacy industries seeking to maintain their old ways of doing business.

Media mogul Barry Diller may have created a number of enemies among broadcasters by financing Aereo, an internet-based video streaming service that relies on tiny antennas to pick up broadcast signals. But, amid much negative industry reaction for the creation, it finally has a friend: the Consumer Electronics Association (CEA).

“Our legal system can and must favor innovation over the status quo,” Gary Shapiro, CEA’s president and CEO, said in a statement Monday. “Our American exceptionalism and economic growth rely on innovation and we must fight legacy industries seeking to maintain their old ways of doing business.”

The group compares the importance of the case to another key copyright ruling: The 1984 Sony Corp. of America v. Universal City Studios, Inc. Supreme Court decision, better known as the Betamax case, opened the way for the modern home video industry.

Aereo is a strange service, effectively designed to work within the confines of another court decision, the 2008 Cartoon Network LP, LLLP v. CSC Holdings, Inc. decision in the Second Circuit of the United States Court of Appeals. Aereo is only available in the New York City area because that’s the only place where the device has been legalized by local courts.

The service, which costs $8 per month for 20 hours of DVR storage and $12 for 40 hours of DVR storage, allows people to rent time on one of the service’s tiny antennas, which pick up free-to-air broadcast signals and allow end users to stream content on any internet-connected device at any time.

While the service has its benefit, critics have said the idea is convoluted and is only in existence due to arbitrary limits created by copyright law.

“If copyright law made sense, copyright owners themselves would offer TV streaming on the internet,” Ars Technica’s James Grimmelmann said of the concept back in August. “But copyright law hasn’t made sense for years, and Aereo embraced the madness.”

And on the legal front, not everyone is in Aereo’s corner, largely because the company does not pay royalties for the broadcast signals it uses. For example, the National Association of Broadcasters — along with the industry it represents — has taken a tough stance against the device. “We’re optimistic that in the final analysis, Aereo will be a copyright infringer,” the group’s Dennis Wharton told TheWrap.

In the context of the recent Tesla Motors lawsuits, is CEA’s full-throated support of an innovative product well-suited? Let us know what you think.

Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. More »

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