Published On: Mon, Apr 21st, 2014

Barry Diller’s Aereo Heads To The Supreme Court This Week

Barry Diller Headshot_Final

 

In May of 2013 Walt Mossberg’s held his final All Things Digital Conference before he and Kara Swisher left the Wall Street Journal to set up on their own as Re/code . Barry Diller was there talking to him about the future of television, together with CNN President Jeff Zucker.

Diller spoke then about his taking signals off the air for Aereo, saying “I don’t want to beat up the broadcasters, I want to move things from closed systems to internet systems”. He then referred to lawsuits that had already been filed against him but to that point had been thrown out by the courts: “Any incumbent wants to guard their wall as aggressively as they can, ” said Diller about the resistance that Aereo has been facing from traditional broadcasting. “I’m kind of happy they sued us in a noisy way because it’s helping Aereo get known.”

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Already available in more than a dozen american cities, Aereo plucks what are the traditionally free-over-the-air broadcast television signals out of the ether, using thousands of dime sized antennas, and then streams them over the internet to subscribers’ computers on an as-demanded basis, without complicated packages, for less than ten dollars a month. The service also includes DVR capabilities.

The broadcast television networks, and cable companies, are all opposed to this as is, if the service takes off, it could cost them billions. By tapping into the free signals Aereo cuts out the cable companies, and the broadcasters also stand to lose some of the the retransmission fees they have come to rely on, fees that cable companies have increasingly been willing to pay to them. The broadcasters argue that what Aereo is doing is simply re-transmitting their signals which is illegal on a group basis.

Aereo argues that by using thousands of tiny individual antennas stacked in warehouses their technology is entirely “one-one”, which is perfectly legal, rather than “one-many”, which is proscribed.

Last May when he spoke Diller had few customers, but for sure he has had a lot of attention in the twelve months since, a period that has seen Aereo commence rollouts in a number of additional cities. Then in January of 2014 the US Supreme Court agreed to hear the case against it and now this week will be hearing oral arguments.

Both sides are relieved in a way that the case will be heard so quickly, as Aereo has so far held back on a massive national rollout of their service, until they have clarity. And for the existing broadcast and cable industry they would, if they can, simply like to shut it down completely as fast as they can.

There is little doubt that Aereo has cleverly been exploiting a loophole in the rules; on the other hand they have done so in a way that could indeed stand scrutiny, depending on the Supreme Court’s willingness to challenge, rather than support, established interests.

So far even the Federal Government seems to be in support of the status quo and has been granted permission to participate in the oral arguments at the court this week.

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