The U.S. Supreme Court ruled 6-3 today that Internet streaming TV provider Aereo must negotiate fee agreements with broadcast networks like other pay TV providers such as cable and satellite.
Aereo charges as little as $8 a month for its streaming Internet TV and remote cloud DVR service. The company's service works by harnessing over-the-air broadcasts using small antennas which they temporarily assign to a customer each time he or she watches or records a TV show. Aereo argued that because they use signals available over the air for free, they should not have to pay retransmission fees to broadcasters like cable and satellite providers do.
The court's majority disagreed with Aereo's assertion that they shouldn't have to pay for using the same broadcast signals that customers can access without charge at home using personal antennas. The court ruled that Aereo's service differs very little from that of cable and satellite providers such as Time Warner and Dish Network.
Broadcasters including CBS, Fox, ABC, NBC and PBS, who increasingly rely on retransmission fees amounting to billions of dollars each year, sued Aereo for copyright infringement. Justices Antonin Scalia, Samuel Alito and Clarence Thomas dissented in the Aereo ruling.
"Free-to-air broadcast television should not be available only to those who can afford to pay for the cable or satellite bundle," Aereo CEO and Founder Chet Kanojia said in a statement. He added, “We are disappointed in the outcome, but our work is not done. We will continue to fight for our consumers and fight to create innovative technologies that have a meaningful and positive impact on our world.”
Aereo had also argued that a loss for them could endanger other cloud computing endeavors. However, Justice Stephen Breyer made it clear in his majority opinion that the court doesn't intend to affect other forms of cloud computing with the ruling.
It remains unclear how Aereo will comply with the ruling, but it appears the company must negotiate fee deals with broadcasters if they want to remain in business. Aereo currently offers its service in a number of large metropolitan areas across the U.S., including Miami, Houston, Dallas, Baltimore, Cincinnati, Austin and New York.