12 TVBEurope Opinion & Analysis
Supreme Court has announced a “new and different rule governing Aereo’s operations”, which effectively overrules ivi. Aereo has asked the district court to continue the stay of discovery and rule on its entitlement to a § 111 licence immediately.
One week after the parties submitted their joint letter to the district court, the Copyright Offi ce provisionally accepted Aereo’s request to obtain a § 111 compulsory licence and fi ling of statements of account forms. However, this is not necessarily good news for Aereo. The Copyright Offi ce rejected Aereo’s legal theory that the Supreme Court’s decision overrules ivi, and reaffi rmed its long-held position that § 111’s defi nition of “cable system” does not cover Internet retransmission services. However, it did state that it may wait to see the outcome of the court case before deciding whether to reject Aereo’s fi lings altogether.
So, now what? The fi rst problem is procedural. The broadcasters argue that the district court cannot consider
the issue because Aereo did not plead § 111 as an affi rmative defence in its Answer. Thus, the issue will be whether Aereo can amend its answer and that, in turn, may require the district court to determine whether the licence defence is viable, or ‘futile’, because the defence has no legal basis, particularly in view of the Copyright Offi ce’s position. Assuming that the district court reaches the viability of the defence, Aereo’s eligibility for a § 111 licence is far from clear. § 111 permits a “cable system” to retransmit a broadcast, pursuant to a statutory licence, where the cable system’s retransmission is permissible under the FCC’s rules and regulations. ivi interpreted this language as too narrow to encompass systems similar to Aereo’s. The district court will need to decide whether the Supreme Court’s statement that “Aereo’s activities are substantially similar to those of the [cable systems] that Congress amended the Act to reach” is enough to bring Aereo within the ambit of § 111. The court may be infl uenced by the Copyright Offi ce’s rejection
of Aereo’s argument, but it is not necessarily bound by it. There remains another issue. Were the court to hold that Aereo meets § 111’s defi nition of “cable system”, it will have to deal with an even thornier issue: is transmission by Aereo permissible under the FCC’s rules and regulations? For years, the FCC has grappled with how to interpret the term “multichannel video programming distributor” (“MVPD”), as defi ned in the Communications Act of 1934, (47 U.S.C. § 522(13)), in light of internet retransmission services, like Aereo, and other internet video streaming services. An MVPD, as defi ned by the Communications Act, is subject to both benefi ts and legal obligations under the Act and FCC regulations. The regulatory benefi ts to an MVPD include the right to seek relief under the retransmission consent rules, which require broadcast stations to consent to an MVPD’s carriage of its signal, and the former programme access rules, which the FCC declined to extend beyond 2012, but which required vertically
integrated cable companies (i.e., entities that own both content and a delivery platform) to provide competitors access to their programming content. On the other hand, MVPDs are obligated to negotiate in good faith with broadcasters for retransmission consent, among several other requirements. In 2010, Sky Angel, an internet protocol television (“IPTV”) service, fi led a programme access complaint with the FCC against a broadcaster which had terminated Sky Angel’s affi liation agreement. At issue there is whether Sky Angel could show that an IPTV service meets the defi nition of MVPD such that it is entitled to seek relief under the FCC’s program access rules. In 2012, the FCC sought public comment on the issue. But the FCC has yet to rule and the issue remains open today. How will the FCC’s non-action in this area affect the district court’s resolution of Aereo’s argument? Will the FCC, as the Copyright Offi ce did, express its view on the issue? Or will that court attempt to rule on the issue before the FCC
does? These questions do not have easy answers. In addition to these points, Aereo also argues that, if it is not eligible for a § 111 licence, any injunction on its services should prohibit only “simultaneous or near- simultaneous streaming”, because such streaming was the only issue before the Supreme Court. This would leave Aereo free to transmit “non-simultaneous playback from copies created by customers.” It is diffi cult to predict what delay between broadcast and streaming would make the latter “non- simultaneous”, and whether the district court will read the Supreme Court’s decision as narrowly as Aereo does.
In short, we have not heard the last from Aereo. As we have said before during this saga, stay tuned.
DLA Piper’s Sports, Media and Entertainment group offers legal services to the global sports and media sector. To follow DLA’s coverage, visit
blogs.dlapiper.com/ mediaandsport, or email
sport.mediaandentertainment@
dlapiper.com.
www.tvbeurope.com August 2014
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