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Old 07-10-2014, 03:05 AM   #1
unitron
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Aereo's a cable company now

Well, sort of.

Basically what it boils down to is "we thought we weren't one but SCOTUS says we are, so that means we can pay the broadcasters like cable does and retransmit their signal to our subscribers".


The broadcasters are having a cow.


http://www.theregister.co.uk/2014/07...legal_defense/

http://www.hollywoodreporter.com/thr...trategy-717536
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Old 07-10-2014, 04:11 AM   #2
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Well, sort of.

Basically what it boils down to is "we thought we weren't one but SCOTUS says we are, so that means we can pay the broadcasters like cable does and retransmit their signal to our subscribers".


The broadcasters are having a cow.


http://www.theregister.co.uk/2014/07...legal_defense/

http://www.hollywoodreporter.com/thr...trategy-717536
Let the litigation begin! And they have a lousy business model still.
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Old 07-10-2014, 10:15 AM   #3
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And they have a lousy business model still.
Especially since they are positioning themselves as a cable company now... all of these cable companies are fighting tooth and nail to negotiate down their fees for carrying content (TWC anyone?) and as a cable company Aereo would bear all of that cost as well. So now the cost of their product—delayed live TV content delivered over IP—is higher, and their profit margin is eroded or the price goes up.

Even if they are able to continue operations as a cable company, I fail to see a competitive advantage over other players in that market.

If Tivo were ever to offer an OTA stream device, this ruling would certainly give them a market for it. Sure, a premiere/roamio + stream does the same thing, but at a higher cost if you don't want the DVR.

If such a Tivo OTA stream device came out, I wonder if there would become a market for leasing space to connect a privately owned Tivo OTA Stream in city centers, essentially replicating Aereo's model, but with consumer-owned hardware.
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Old 07-10-2014, 10:48 AM   #4
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I think this is a ploy...they are just saying "Okay, the court says we're a cable company, so all the rules that apply to cable company apply to us." This, of course, has the cable companies up in arms, and by extension, the broadcasters. They are basically telling the industry to put up or shut up.

A classic example of be careful what you wish for.

I suspect Aereo is hoping to force Congressional action to clarify the law, and perhaps make their original model legal.
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Old 07-10-2014, 01:12 PM   #5
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I think this is a ploy...they are just saying "Okay, the court says we're a cable company, so all the rules that apply to cable company apply to us." This, of course, has the cable companies up in arms, and by extension, the broadcasters. They are basically telling the industry to put up or shut up.

A classic example of be careful what you wish for.

I suspect Aereo is hoping to force Congressional action to clarify the law, and perhaps make their original model legal.
There can't be a realistic chance of that, right? Even if congress would take this on, there is no justification for requiring an individual antenna for each subscriber and presumably any law they would pass would be logical enough to reflect that. So where would that leave Aereo? The value of their only innovation would be nil. To me the only essential issue (which should be reflected in any new legislation) is that the subscriber has to have a residence in the viewing area of the OTA station, and thus Aereo (or any other provider) is simply providing the convenience of not having to have an antenna (which may be blocked by structures) at the residence.

I think the Supreme Court having to deal with this was a big waste of their time. It's too bad they can't just bounce it over to Congress and say "come on, adjust the law to deal with current technology." (Yeah I know -- they can't do that.)
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Old 07-10-2014, 01:53 PM   #6
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I thought a cable system was defined as a closed set of transmission paths that must use a public right-of-way. Since the Internet is not a closed path, and Aereo is not using its own cables to deliver its signals to the houses, how can they claim they are a cable system?
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Old 07-10-2014, 02:06 PM   #7
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I thought a cable system was defined as a closed set of transmission paths that must use a public right-of-way. Since the Internet is not a closed path, and Aereo is not using its own cables to deliver its signals to the houses, how can they claim they are a cable system?
Surely that definition has to have been relaxed or modified by now. Most cable/fiber providers are already providing much of the content by IP.

If not, I can only imagine that it is only a matter of time until this definition is modified. It's sort of like how telecom providers used to provide analog lines, but now offer unlimited voice and just charge by data bandwidth used.
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Old 07-10-2014, 02:13 PM   #8
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I thought a cable system was defined as a closed set of transmission paths that must use a public right-of-way. Since the Internet is not a closed path, and Aereo is not using its own cables to deliver its signals to the houses, how can they claim they are a cable system?
I would think because the Supreme Court said they are..or are essentially same...or something. Whatever justified their treatment as a cable company which lost them the case should justify their treatment as a cable company in their operation.
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Old 07-10-2014, 05:11 PM   #9
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I would think because the Supreme Court said they are..or are essentially same...or something. Whatever justified their treatment as a cable company which lost them the case should justify their treatment as a cable company in their operation.
Exactly. As far as what might actually happen...

1) The networks tell Aereo to pound sand, at which point Aereo sues for violation of the rules that say a broadcaster must negotiate in good faith with any cable operator that wishes to carry their content and who serves a portion of their DMA.

2) The networks negotiate with Aereo but demand an outrageous retransmission fee, at which point Aereo sues for failure to negotiate in good faith.

3) The networks reach a deal with Aereo but only under their original system - OTA reception (IOW, no direct feeds) which limits Aereo to markets where all the channels can be received adequately from a single location. Aereo might also sue in this case as well, perhaps under a fair trade issue or seeking equal treatment with other "cable companies."

4) The networks and Aereo reach a happy agreeement and Aereo tries to run their business as before.

5) After taking the networks to court in one of the above scenarios, Aereo prevails and becomes the first purely IP based "cable company."

Those just off the top of my head...there are probably a dozen other scenarios.

It would appear that the Aereo saga is not yet over.
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Old 07-10-2014, 10:20 PM   #10
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Aereo was $8 to $12 per month, depending on how much DVR space you rented from them.

If you add in the per channel price that cable companies have to pay for broadcast channels, you're still going to be under $20 per month, depending on how many broadcast channels there are in your market.

Of course, Aereo's setup means that they can provide exact figures on not only which channels you do or do not "consume", but how many hours of the offerings of those channels, which means they could offer "a la carte" pricing to subscribers, with broadcasters bearing the burden of justifying wanting to be paid for content the subscriber is not consuming, which should make for some interesting arguments in court.

I'd say it's not Aereo that needs to be careful about for what they wish nearly as much as all the other players.
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Old 07-10-2014, 10:34 PM   #11
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I assume Aereo can negotiate a deal to retransmit local channels but I can't see how that can be done profitably. It was one thing to pirate the channels and provide them for a nominal fee as they were doing, that had potential, paying for the rights will cause the price to be too high to interest much of a market.

Maybe Aereo can be as successful as Napster is now, trying to sell music after acquiring rights? I haven't checked Napster's results but I don't think the company is doing much.
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Old 07-10-2014, 10:38 PM   #12
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Did Aereo allow people to store recorded programs on their computer's or tablet's hard drive in a non-encrypted format?
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Old 07-11-2014, 12:13 AM   #13
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Aereo was $8 to $12 per month, depending on how much DVR space you rented from them.

If you add in the per channel price that cable companies have to pay for broadcast channels, you're still going to be under $20 per month, depending on how many broadcast channels there are in your market.

Of course, Aereo's setup means that they can provide exact figures on not only which channels you do or do not "consume", but how many hours of the offerings of those channels, which means they could offer "a la carte" pricing to subscribers, with broadcasters bearing the burden of justifying wanting to be paid for content the subscriber is not consuming, which should make for some interesting arguments in court.

I'd say it's not Aereo that needs to be careful about for what they wish nearly as much as all the other players.
Don't forget the secret high speed internet cost that is needed make Aereo work, at that point starter cable is cheaper.
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Old 07-11-2014, 01:11 AM   #14
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I wonder where the line is between something like OTA with a Tivo stream being in my house vs. being in another location.

It seems like there could be a viable business model operating a facility in a city with plenty of OTA channels and leasing customers a bundle that includes an antenna, DVR hardware, internet access, and a locker from which the equipment can be operated.

The only difference from Aereo is that the equipment belongs to the customer, so it is not really any different than you remotely watching content received OTA at your home.
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Old 07-11-2014, 10:52 AM   #15
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.....
The only difference from Aereo is that the equipment belongs to the customer, so it is not really any different than you remotely watching content received OTA at your home.
And is that really a difference? Aereo said you were renting (your own set of) the equipment from them.
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Old 07-11-2014, 01:00 PM   #16
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Surely that definition has to have been relaxed or modified by now. Most cable/fiber providers are already providing much of the content by IP.

If not, I can only imagine that it is only a matter of time until this definition is modified. It's sort of like how telecom providers used to provide analog lines, but now offer unlimited voice and just charge by data bandwidth used.
I couldn't remember the exact wording, so I looked it up.

http://www.law.cornell.edu/uscode/text/17/111

Cable system.— A “cable system” is a facility, located in any State, territory, trust territory, or possession of the United States, that in whole or in part receives signals transmitted or programs broadcast by one or more television broadcast stations licensed by the Federal Communications Commission, and makes secondary transmissions of such signals or programs by wires, cables, microwave, or other communications channels to subscribing members of the public who pay for such service. For purposes of determining the royalty fee under subsection (d)(1), two or more cable systems in contiguous communities under common ownership or control or operating from one headend shall be considered as one system.

Here's a similar case that doesn't bode well for Aereo:

http://iplaw.hllaw.com/2012/09/artic...-infringement/

http://www.broadbandlawadvisor.com/2...l-regulations/

http://en.wikipedia.org/wiki/WPIX,_Inc._v._ivi,_Inc.
(Note the very last sentence is incorrect-- Aereo WAS considered to be retransmitting. But you still can do it using the Internet if you pay the appropriate fees).

The compulsory licensing fees are tiny (2% of annual gross receipts I think, for all the stations combined). But neither the court nor the Copyright Office thinks Aereo is eligible for those special fees. Aereo could go to each network individually and negotiate the fee. I bet that fee is way more than 2% combined.

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Old 07-11-2014, 01:30 PM   #17
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Unless they are sitting on tons of cash to keep things rolling and fight these guys in court over the next 2 years I don't see anything coming out of this. Networks are simply going to drag their heels and fight them until they hit bankruptcy.

There were bigger players trying to make something similar work (cable company over internet only) and nothing has really come of it. Intel was working on it IIRC back in 2012 and I thought I recall they dropped the idea.

Edit:

Actually Verizon bought it.
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Old 07-11-2014, 01:31 PM   #18
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All kinds of dirty pool being played, one article on the subject I posted above.

http://theweek.com/article/index/245...net-cable-plan
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Old 07-11-2014, 03:36 PM   #19
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Unless they are sitting on tons of cash to keep things rolling and fight these guys in court over the next 2 years I don't see anything coming out of this. Networks are simply going to drag their heels and fight them until they hit bankruptcy.

There were bigger players trying to make something similar work (cable company over internet only) and nothing has really come of it. Intel was working on it IIRC back in 2012 and I thought I recall they dropped the idea.

Edit:

Actually Verizon bought it.
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Old 07-11-2014, 03:56 PM   #20
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And is that really a difference? Aereo said you were renting (your own set of) the equipment from them.
Yes.

The court ruled that in retransmitting near-real-time content Aereo is performing, and is doing so publicly because the users are not known to each other. However it is presently legal for a person to purchase and install a device in their home that privately streams OTA content in real-time to themselves elsewhere via the internet.

If an individual purchases such hardware, it does not have to be installed in their primary residence. For example it could be installed in an apartment somewhere else, whereby enabling that person to privately stream the OTA content from that other location to themselves elsewhere.

Now say that this "apartment" is approximately 12"x12"x6" and has basic utilities (power and internet) included in the monthly rental price. And the property manager also sells the equipment a person would need to facilitate transmitting their own private performance to themselves via internet, and installs it in their "apartment" on their behalf at their direction.

So the property manager is renting utility-included "apartments" and also selling and installing OTA DVRs on behalf of their "tenants", but any subsequent streaming activities initiated by the "tenant" would be an individual using their own equipment to stream a private performance from their "apartment" to themselves without any involvement of a intermediary.

This is still a viable business model because a cheap unamplified antenna costs less than a locally installed long-range amplified system. So rather than order equipment and mount a bunch of stuff in the attic or on the roof, requiring a significant investment of time and money, you have an easier option of ordering a custom system (number of tuners, size of drive, streaming bandwidth) that is installed and maintained remotely on your behalf.

Up front hardware cost would probably be about $50-$150 depending on configuration, and the monthly costs should be roughly the same as they were previously. At the time you cancel your "apartment" lease, you have the choice of recycling or having shipped to you since you own the equipment.

Of course if you live close enough to the broadcast towers then you wouldn't need to lease an "apartment" and could operate the equipment yourself at a lower cost. But trust me, cutting the cord is really expensive (likely over $500) and complicated if you live 30 miles away, and may still be unreliable.
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Old 07-11-2014, 05:17 PM   #21
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Yes.

The court ruled that in retransmitting near-real-time content Aereo is performing, and is doing so publicly because the users are not known to each other. However it is presently legal for a person to purchase and install a device in their home that privately streams OTA content in real-time to themselves elsewhere via the internet.

If an individual purchases such hardware, it does not have to be installed in their primary residence. For example it could be installed in an apartment somewhere else, whereby enabling that person to privately stream the OTA content from that other location to themselves elsewhere.

Now say that this "apartment" is approximately 12"x12"x6" and has basic utilities (power and internet) included in the monthly rental price. And the property manager also sells the equipment a person would need to facilitate transmitting their own private performance to themselves via internet, and installs it in their "apartment" on their behalf at their direction.

So the property manager is renting utility-included "apartments" and also selling and installing OTA DVRs on behalf of their "tenants", but any subsequent streaming activities initiated by the "tenant" would be an individual using their own equipment to stream a private performance from their "apartment" to themselves without any involvement of a intermediary.

This is still a viable business model because a cheap unamplified antenna costs less than a locally installed long-range amplified system. So rather than order equipment and mount a bunch of stuff in the attic or on the roof, requiring a significant investment of time and money, you have an easier option of ordering a custom system (number of tuners, size of drive, streaming bandwidth) that is installed and maintained remotely on your behalf.

Up front hardware cost would probably be about $50-$150 depending on configuration, and the monthly costs should be roughly the same as they were previously. At the time you cancel your "apartment" lease, you have the choice of recycling or having shipped to you since you own the equipment.

Of course if you live close enough to the broadcast towers then you wouldn't need to lease an "apartment" and could operate the equipment yourself at a lower cost. But trust me, cutting the cord is really expensive (likely over $500) and complicated if you live 30 miles away, and may still be unreliable.
I think that's a distinction without a difference. I wouldn't attempt to argue what the law now says. The Supremes have ruled. However, when it comes to what the law **should** say, that's a distinction without a difference. Actually I think anyone who has a residence within the antenna range of an OTA station should be allowed to use Aereo without any retransmission fees being paid. I don't even think separate antennas should be required. I also don't think the retransmission fees paid by cable now should be required. I understand this puts a dent in the business model of OTA networks and that the smart crowd predicts they are going to disappear eventually. I say let the chips fall where they may. Content will find viewers, and revenue, one way or another.
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Old 07-11-2014, 06:04 PM   #22
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I think that's a distinction without a difference. I wouldn't attempt to argue what the law now says. The Supremes have ruled. However, when it comes to what the law **should** say, that's a distinction without a difference. Actually I think anyone who has a residence within the antenna range of an OTA station should be allowed to use Aereo without any retransmission fees being paid. I don't even think separate antennas should be required. I also don't think the retransmission fees paid by cable now should be required. I understand this puts a dent in the business model of OTA networks and that the smart crowd predicts they are going to disappear eventually. I say let the chips fall where they may. Content will find viewers, and revenue, one way or another.
Most lawyers I know say that the SCOTUS ruling isn't logical or consistent at all. It almost seems like the bullies threatening to pull content from OTA channels made the justices err in their favor. If you transmit something publicly then you can't police every reception and use of the signal.

The model I described CANNOT be ruled to be illegal without the technology itself being banned for all personal and/or private use. They clearly seemed to want to avoid stifling technology, but said receiving and retransmitting online is no different than retransmitting OTA, which was already made illegal.
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Old 07-12-2014, 01:38 AM   #23
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Don't forget the secret high speed internet cost that is needed make Aereo work, at that point starter cable is cheaper.
Unless, of course, you already had that internet subcription for other stuff anyway, including cable replacers like Netflix and Hulu, in addition to email and YouTube cat videos.
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Old 07-12-2014, 01:50 AM   #24
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All kinds of dirty pool being played, one article on the subject I posted above.

http://theweek.com/article/index/245...net-cable-plan
An interesting line from that article:

"Comcast, for one, when it acquired NBC Universal in 2011, signed a contract prohibiting it from blocking budding internet distributors."


I assume that said contract would survive a merger with TWC (unless they divested Universal-NBC as part of that merger), which would mean TWC could no longer put up the roadblocks described in that article.

There may be lots and lots of "be careful for what you wish" to go 'round to almost all the players before this is through.
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