The Supreme Court’s Aereo decision (CD June 26...
The Supreme Court’s Aereo decision (CD June 26 p1) applied only to the aspect of the company’s product that allowed viewers to stream broadcast content nearly live, not to its remote DVR service, said Guggenheim Partners analyst Paul Gallant in…
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an email to investors Monday. That means Aereo could argue that any subsequent injunctions sought by broadcasters in lower courts based on the high court opinion also don’t apply to the DVR service, he said. “If Aereo did that, a new round of briefs and perhaps a full trial would be required to determine whether such a service was sufficiently cable-like to warrant the same shutdown treatment.” However, such a court battle could potentially last years, likely testing the patience and fortitude of Aereo’s investors, he said. Such a move could also be pre-empted by broadcasters seeking summary judgment and large damage awards, Gallant said. “Should the court grant summary judgment and then a large damage award against Aereo, broadcasters would have significant leverage over Aereo ever refashioning itself as a delayed-basis TV service.” Legislation in Aereo’s favor is unlikely, and its Supreme Court loss likely reduces Democratic legislators’ leverage over broadcasters, Gallant said. “Had broadcasters needed to ask for help on Aereo, we believe some Democrats would have insisted that broadcasters accept a ‘no blackout’ provision during retrans negotiations as a condition for an Aereo fix.” Aereo could ask the FCC to designate it a multichannel video programming distributor, but even if that were granted, Aereo would need broadcasters to sell it content and a compulsory copyright license to operate, Gallant said. “The U.S. Copyright Office has been very reluctant to consider Internet-based companies as eligible for that license."