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April 21, 2014

Court to hear dispute over Internet TV broadcasts

WASHINGTON — Thirty years after failing to convince the Supreme Court of the threat posed by home video recordings, big media companies are back and now trying to rein in another technological innovation they say threatens their financial well-being.

The battle has moved out of viewers' living rooms, where Americans once marveled at their ability to pop a cassette into a recorder and capture their favorite programs or the sporting event they wouldn't be home to see.

Now the entertainment conglomerates that own U.S. television networks are waging a legal fight, culminating in Tuesday's Supreme Court argument against a startup business that uses Internet-based technology to give subscribers the ability to watch programs anywhere they can take portable devices.

The source of the companies' worry is Aereo Inc., which takes free television signals from the airwaves and sends them over the Internet to paying subscribers in 11 cities. Aereo, backed by billionaire Barry Diller, has plans to more than double that total.

Broadcasters including ABC, CBS, Fox, NBC and PBS have sued Aereo for copyright infringement, saying Aereo should pay for redistributing the programming the same way cable and satellite systems do.

The U.S. networks increasingly are reliant on these retransmission fees, estimated at $3.3 billion last year and going up to more than $7 billion by 2018, according to research by SNL Kagan, which analyzes media and communications trends. They fear that they will lose some of that money if the Supreme Court rules for Aereo.

Aereo's service starts at $8 a month and is available in New York, Boston, Houston and Atlanta, among others. Subscribers get about two dozen local over-the-air stations, plus the Bloomberg TV financial channel.

In the New York market, Aereo has a data center in Brooklyn with thousands of dime-size antennas. When a subscriber wants to watch a show live or record it, the company temporarily assigns him an antenna and transmits the program over the Internet to the subscriber's laptop, tablet, smartphone or other device.

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