On Jan. 10, 2014, the U.S. Supreme Court agreed to hear an appeal from the nation's broadcast networks over Aereo Inc.’s controversial online television service, setting the stage for a potentially final resolution of a long-running copyright dispute that has tremendous implications for the economics of television, cloud computing and Internet streaming.
Using thousands of tiny, dime-sized antennas, Aereo, as well as a similar service FilmOn, pick up free broadcast television signals and send that programming to their own customers over the Internet for $8 to $12 per month. The networks contend that Aereo and FilmOn are stealing, but lawsuits aimed at shutting down both services have met with varying success.
The case will also have major economic implications for the television industry. The legality of Aereo-like free retransmissions implicitly calls into question the billions of dollars that the networks currently charge traditional pay-television companies in retransmission consent fees. Those fees were at the heart of a recent spat between CBS and Time Warner Cable that led to an unprecedented, month-long CBS blackout for more than 3 million Time Warner Cable subscribers.
The major content companies and sports leagues have already threatened to move their programming to pay channels if they lose the case. Late last year, for example, the National Football League and Major League Baseball warned that if Aereo prevails, the leagues might move high-profile broadcasts like the Super Bowl and World Series to cable.