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Aereo Loses Bid to Become Cable Company

 & Chloe Albanesius Executive Editor, News

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Sorry Aereo, it's just not your year.

The startup's bid to reinvent itself as a cable company is not going well, as a New York judge this week granted a request from major broadcasters to ban Aereo from retransmitting live TV broadcasts.

Though Aereo did its best to "to turn lemons into lemonade," its argument was not convincing enough for U.S. District Judge Alison Nathan.

In June, the Supreme Court voted 6 to 3 that Aereo violates the Copyright Act, effectively killing the two-year-old service. "Aereo is not simply an equipment provider," the court said at the time.

Aereo manufactures small HDTV antennas, receives broadcast channels, and then stores the programming they capture on servers. From there, people access the service on the Internet to view the content, without having to buy or install any equipment. Aereo argued that it was simply providing storage for users' content, like any other cloud service, but the broadcasters said Aereo was violating copyrights and making money off its content.

The High Court sided with the broadcasters, and in a bid to stay viable, Aereo sought "to argue that it is in fact a cable system that should be entitled to a compulsory license," Judge Nathan said. "This argument is unavailing for a number of reasons."

"To begin with, Aereo's argument suffers from the fallacy that simply because an entity performs copyrighted works in a way similar to cable systems it must then be deemed a cable system for all other purposes of the Copyright Act," the judge said.

The Supreme Court said the Aereo was similar to a cable system, but did not conclude that it actually was one, she said. Aereo was also basing its arguments on questions the justices asked during oral arguments, rather than conclusions that made it into the final opinion.

"The commentary of individual Justices at oral argument has no such legal effect; only the Justices' written opinions have the force of law," Judge Nathan said.

The last remaining glimmer of hope for Aereo is with its DVR business, which was not affected by this week's ruling. The judge ordered both sides to "submit a joint letter outlining how the case should proceed" within two weeks. "This Court intends to set a rapid schedule for the completion of discovery, so that the case may proceed expeditiously to the final merits stage," he concluded.

Aereo's website currently displays an Oct. 13 letter from CEO Chet Kanojia about its bid to essentially become a cable provider.

For more, check out Aereo: Everything You Need to Know.

About Our Expert

Chloe Albanesius

Chloe Albanesius

Executive Editor, News

My Experience

I started out covering tech policy in DC for The National Journal, where my beat included state-level tech news and all the congressional hearings and FCC meetings I could handle. I later covered Wall Street trading tech before switching gears to consumer tech. I now lead PCMag's news coverage.

My Areas of Expertise

Getting my start in DC means I still have a soft spot for tech policy; Congressional hearings can sometimes be as entertaining as a Bravo reality show, for better or worse. But PCMag is all about the technology we use every day, as well as keeping an eye out for the trends that will shape the industry in the years ahead (or flop on arrival). I've covered the rise of social media, the iOS vs. Android wars, the cord-cutting revolution that's now left us with hefty streaming bills, and the effort to stuff artificial intelligence into every product you could imagine. This job has taken me to CES in Vegas (one too many times), IFA in Berlin, and MWC in Barcelona. I also drove a Tesla 1,000 miles out west as part of our Best Mobile Networks project. Of late, my focus is on our hard-working team of reporters at PCMag, guiding and editing their robust coverage.

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