* Major broadcasters lose bid for preliminary injunction
* Judge said ruling for broadcasters could shut Aereo down
* Some broadcasters, including Fox, plan appeal
* Online venture launched in NYC area in March
By Jonathan Stempel and Yinka Adegoke
July 11 A federal judge has rejected a bid by
major U.S. broadcasters to stop Aereo Inc, an online television
venture backed by billionaire Barry Diller, to stop
rebroadcasting some of its programming over the Internet.
The broadcasters sought to stop Aereo from streaming
programs to phones, tablet computers and other devices, saying
they would lose their right to retransmission fees from cable
and other companies that rebroadcast their programming, and also
lose critical advertising revenue.
Walt Disney Co's ABC, CBS Corp, Comcast
Corp's NBCUniversal and Telemundo, News Corp's
Fox, Univision Communications Inc and the
Public Broadcasting Service had filed lawsuits accusing Aereo of
copyright violations, even before the service was launched in
the New York City area in March for $12 per month.
The launch of services like Aereo or Dish Network's
ad-skipping Hopper device are seen as a threat to the TV
industry's ability to control subscription fees and generate
The $100 billion pay-TV business in particular is concerned
that the delivery of TV signals over the Web will lead to
customers dropping their expensive cable packages for cheaper,
smaller Web TV packages which are being explored by technology
companies like Apple Inc, Google Inc and Intel
U.S. District Judge Alison Nathan said on Wednesday that
while the broadcasters demonstrated they faced irreparable
financial damage if were the venture were allowed to continue,
Aereo also showed it would face severe harm if the requested
preliminary injunction were granted.
"First and foremost, the evidence establishes that an
injunction may quickly mean the end of Aereo as a business," the
Manhattan judge wrote in a 52-page opinion.
Broadcasters said they would appeal, and ISI Group analyst
Vijay Jayant noted that while the judge's ruling was
significant, the trial would be decided by jury and it would be
a long road ahead before anyone could claim victory.
"It's not even the first inning," said CBS Corp CEO
Les Moonves, speaking on the sidelines of the Allen & Co media
conference in Sun Valley, Idaho.
CBS, ABC and NBC said separately they would appeal. Fox,
PBS, Univision and the New York-area stations WNET and WPIX said
in a joint statement they will appeal, calling the decision "a
loss for the entire creative community".
Diller, whose IAC/InterActive Corp provided $20.5
million of start-up financing for Aereo, welcomed the decision.
"Of course I'm happy the judge denied the injunction, and
now we can really begin telling television consumers they have
an alternative," he said. Diller sits on Aereo's board.
Time Warner Cable CEO Glenn Britt said the ruling
was of interest to cable operators as it raised questions about
the practice of "retransmission consent" in which cable
operators pay broadcast stations to carry their signals.
"If (Aereo is) found to be legal, then the idea of consumers
having to pay for otherwise free broadcast signals is called
into question," said Britt, also speaking from Sun Valley.
Nathan agreed that Aereo will damage the broadcasters'
ability to negotiate advertising and retransmission agreements,
given that the service could artificially lower Nielsen
viewership ratings and force concessions.
She also said Aereo could reduce traffic to websites of the
broadcasters themselves, damaging relationships with content
providers and advertisers there.
But Nathan also said Aereo, in addition to facing the risk
of closure, could lose employees, the ability to attract new
investors, customer goodwill, and its "substantial investments"
in the service.
"The balance of hardships certainly does not tip decidedly
in favor of (the broadcasters)," she wrote.
The court concluded it was bound by a 2008 Second Circuit
court's decision in favor of Cablevision Systems Corporation for
its remote-storage digital video recorder (RS-DVR) system which
also allowed consumers to record programs on remote servers.
Broadcasters privately disputed the Cablevision ruling would
apply to Aereo.
The cases are American Broadcasting Cos. et al v. Aereo Inc,
U.S. District Court, Southern District of New York, No.
12-01540; and WNET et al v. Aereo Inc in the same court, No.