• by Wendy Davis  @wendyndavis, November 13, 2013

Online video company Aereo “threatens the existence of the American broadcast industry as the nation has come to know it,” the Media Institute says in papers filed this week with the Supreme Court.

The nonprofit think-tank is asking the Supreme Court to hear the broadcasters' challenge to earlier rulings allowing Aereo to continue operating. “Aereo's opportunistic, freeloading business mode is an affront to the foundations of copyright,” the organization says in its friend-of-the-court brief.

The group argues that a pro-Aereo decision earlier this year by the 2nd Circuit Court of Appeals threatens to disrupt the broadcast industry's model, which involves cable and satellite providers paying fees to copyright owners in exchange for the right to transmit programs to consumers.

Aereo, backed by Barry Diller, allows paying subscribers to stream over-the-air TV shows to the iPhones, iPads and other devices. The company also provides DVR-like functionality, enabling people to “record” shows and watch them later.

Last year, soon after Aereo launched in New York, the major TV broadcasters filed a copyright lawsuit against the company in federal court. The TV networks say that Aereo infringes copyright by publicly performing programs without a license.

Aereo argues that its system is legal due to its architecture, which uses thousands of tiny antennas to capture and stream over-the-air broadcasts. Aereo says its streams aren't public performances but private ones, because they are made on an antenna-to-user basis.

Earlier this year, the 2nd Circuit agreed with Aereo, and ruled that the broadcasters aren't entitled to an injunction preventing Aereo from operating. The court said in its ruling that the company's system doesn't infringe the TV networks' right to publicly perform programs. One judge dissented, calling Aereo's system “a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law.”

The Media Institute argues that the dissenting judge “saw the matter exactly right.”

The organization adds: “Aereo's bizarre engineering, employing thousands of antennas to do the work of one, reveals to all what is really going on.”

The Media Institute also says that Aereo -- and other, similar, online video services -- will continue to spread across the country, sparking new litigation, unless the Supreme Court intervenes. "There is no sound reason for allowing the stability of the broadcast industry to unravel at the seams while these businesses and lawsuits proliferate,” the organization argues in its legal papers. 

The Media Institute primarily focuses on First Amendment issues. The group says it receives funding from foundations, media companies, individuals and others.