Aereo suffers another blow to weaken its grip on existence as a federal judge ruled that it cannot transmit free-to-air channels over the Internet to its subscribers, effectively dealing a setback that the startup might not be able to recover from.
In a 17-page ruling released on Thursday, U.S. District Judge Alison Nathan granted a victory for several broadcaster plaintiffs who requested for a temporary injunction barring Aereo from streaming, transmitting or retransmitting their programs as they are being shown. In her ruling, Nathan said her decision was based on a Supreme Court decision ruling Aereo infringed upon broadcasters' copyrights by pushing over-the-air TV programs to the Internet and charging subscribers $8 to $12 to view these programs without paying retransmission fees to broadcasters.
"The Supreme Court has concluded that Aereo performs publicly when it retransmits Plaintiffs' content live over the Internet and thus infringes Plaintiffs' copyrighted works," Nathan wrote [pdf]. "In light of this conclusion, Aereo cannot claim harm from its inability to continue infringing Plaintiffs' copyrights."
"In addition, in light of the fact that Plaintiffs have shown a likelihood of success on the merits rather than just sufficiently serious questions going to the merits, they need no longer show that the balance of hardships tips decidedly in their favor," she added.
Nathan also rebuffed Aereo's argument that the Supreme Court's ruling, which noted that Aereo performs similarly to cable companies, that Aereo should also be granted a compulsory license to transmit television programs as a cable company. The judge describes Aereo's claim as making lemonades out of the lemons they were handed.
"Stated simply, while all cable systems may perform publicly, not all entities that perform publicly are necessarily cable systems, and nothing in the Supreme Court's opinion indicates otherwise," Nathan said.
Aereo was launched in 2012 with the backing of billionaire and IAC Chairman Barry Diller. The company's business model hinges upon the use of antenna/DVR technology that retransmits over-the-air television programs to users' computers, tablets, smartphones and other electronic devices connected to the Internet. This caught the attention of several big-name broadcasters, including Walt Disney Co.'s ABC, CBS, Comcast, NBCUniversal and 21st Century Fox, which accused Aereo of violating their copyrights and called for the startup to pay retransmission fees.
However, hope remains for the embattled cord-cutting company. Towards the end of her ruling, Nathan dismissed requests by the broadcasters to extend the injunction to Aereo's cloud-based DVR, which lets viewers watch TV shows via a remote antenna and record and save them for playback later. Nathan declined to provide a ruling on Aereo's DVR service but instructed the parties to submit letters on how the case should proceed.
Recent legal decisions show Aereo's DVR service could be the silver lining to its dark days. In 2008, the Second Circuit controlling appeals court in New York issued a landmark ruling called Cablevision declaring remote-storage DVRs, such as Dish's Hopper, legal under copyright law.