Aereo, which has suspended its service but continues to incur costs of more than $1 million a month, said in court papers filed on Thursday that it must resume operations as soon as possible.
On Friday, U.S. District Court Judge Alison Nathan in New York ordered those papers stricken from the record for procedural reasons. But the version that was publicly available early on Friday lays out the company's new strategy, as well as Aereo's precarious financial situation.
Aereo CEO Chet Kanojia said in a document submitted with the company's now-stricken motion that it will face irreparable harm, unless Nathan clears the company to resume operations. “Aereo's monthly obligations well exceed $1 million. Aereo has only finite resources, and if Aereo cannot operate, it cannot generate revenue to pay these and other expenses,” he said.
He also suggested that Aereo will lay off some or all of its 100 employees, unless it can restart its service.
Aereo voluntarily suspended its service several days after the Supreme Court ruled that the company's real-time streams infringed broadcasters' copyrights.
No court order in New York currently requires Aereo to stop operations. Still, the company sought clearance to resume its service while litigation continues over a different issue in the case -- whether it's entitled to a compulsory cable license.
Instead, Nathan ordered the broadcasters to submit papers outlining their position within two weeks. Nathan also ordered Aereo's papers deleted from the docket.
Until it stopped operating, Aereo streamed over-the-air television programs to paying subscribers' smartphones, tablets and other devices. The company also allowed people to record shows and watch them later. Between 2012 and this year, Aereo rolled out its service to 11 markets; the company only let people stream shows that were available over-the-air in their current geographic locations.
In 2012, Nathan denied the broadcasters' request for an injunction against Aereo, on the ground that its streams were “private” performances, which don't require licenses. Nathan based that decision on the company's architecture, which relied on multiple antennas to capture and transmit programs on an antenna-to-user basis.
The 2nd Circuit Court of Appeals upheld Nathan's decision, but the Supreme Court reversed it in June, ruling that Aereo's service infringed copyright regardless of the company's underlying technology. The Supreme Court said in its decision that Aereo resembled a cable system, which can't legally transmit programs without paying fees.
Aereo now takes the position that the Supreme Court's rationale supports the view that the company is entitled to a compulsory license.
One hurdle for Aereo is that a federal appellate court in New York ruled several years ago that ivi TV -- an earlier service that streamed television on the Web -- was not entitled to a cable license. But Aereo argues in its latest court papers that the key reason ivi lost its bid for a license was that its service wasn't limited geographically.
“ivi was not a local service delivering local over-the-air broadcasts to local subscribers,” Aereo argues. “As a result, the court found that ivi’s nationwide Internet transmission did not seek to address the important issues of availability of and remote access to local over-the-air television signals, and it was therefore not the type of service Congress intended the compulsory license to cover.”