Judge says Aereo must shut for good as live TV, but service may survive as a cloud DVR

The story of Aereo, the streaming TV service that rattled the broadcast industry before the Supreme Court shut it down, is not over just yet it seems. On Thursday, a federal judge in New York not only slapped Aereo with an expected injunction, but also hinted how the service might survive in the future.

In a 17-page ruling, U.S. District Judge Alison Nathan denied Aereo a license to operate as a cable company, which would have permitted the company to resume its service — which gave consumers a way to capture and retransmit free over-the-air signals to mobile devices by means of a personal antennas — provided that it paid broadcasters a fee.

This part of the ruling is a setback for Aereo, which had operated in about 12 cities before shutting down in July in response to the Supreme Court’s 6-3 ruling in June.

The majority of the Supreme Court Justices concluded that Aereo was akin to a cable company, which in turn led it to argue before Judge Nathan that it should now be permitted to avail itself of same sort of license as cable and satellite companies do.

Judge Nathan, remarking that Aereo was “doing its best to turn lemons into lemonade,” rejected its claim to be a cable company, however, on the grounds that retransmitting airwaves was not enough to fall into the cable category:
[blockquote person=”” attribution=””]Stated simply, while all cable systems may perform publicly, not all entities that perform publicly are necessarily cable systems, and nothing in the Supreme Court’s opinion indicates otherwise.[/blockquote]

This was a clear, though not unexpected, victory for the broadcasters who have argued all along they have the right to control their signals.

But in a significant passage towards the end of her ruling, Judge Nathan also rebuffed the broadcasters’ request to expand the scope of the ruling to cover Aereo’s DVR functions. Those functions allowed consumers to not only watch TV via a remote antenna, but also to record shows and play them back later.

The broadcasters had argued the judge should tailor the injunction to shut down Aereo’s services. Aereo, in contrast, suggested it would be legal under copyright law to offer consumers a way to retransmit shows after “a modest delay, such as 10 minutes.”

Judge Nathan, however, refused to decide the question in her ruling on Thursday, on the grounds that the Supreme Court had expressly declined to answer the question of whether companies like Aereo could offer DVR-style tools without a license from the broadcasters.

Instead, she ordered Aereo and the broadcasters to prepare final submissions on the topic of the DVR issues, saying she would then rule in the near future:
[blockquote person=”” attribution=””]And there may be both factual and legal nuances unique to fully time-shifted retransmission that have not been fleshed out that may influence this Court’s application of the Supreme Court’s holding to what is essentially the remote DVR aspect of Aereo’s operations.[/blockquote]
In response to a request for comment, Aereo spokesperson Virginia Lam stated, “We are reviewing the decision and evaluating our options moving forward.”

While the DVR question remains uncertain until the judge issues a final ruling, recent developments in the legal landscape appear to favor Aereo. Courts have recently ruled that “watch anywhere” DVR’s such as Dish Anywhere are legal, while Comcast is confident enough in the state of copyright law to have launched a cloud-DVR service.

Finally, the controlling appeals court in New York, known as the Second Circuit, issued a landmark ruling in 2008 known as Cablevision, which declared remote-storage DVR’s to be legal under copyright law — a ruling that Judge Nathan has earlier relied upon.

Here’s Thursday’s ruling with relevant parts underlined:

This story was updated at 11:30am ET. An earlier version incorrectly stated that Dish’s Hopper service was cloud-based. 

Aereo, Nathan Oct 23 Injunction Order

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