• by Wendy Davis  @wendyndavis, October 8, 2013

CBS and Fox affiliates have filed a new lawsuit in Utah against streaming TV service Aereo, which launched in Salt Lake City six weeks ago.

Community Television of Utah alleges in its complaint, filed on Monday in U.S. District Court, that the Barry Diller-backed startup infringes copyright by enabling subscribers to stream TV shows directly to iPhones and other devices. The broadcaster -- which operates KSTU (Fox), KUTV (CBS) and KMYU (My Network TV) and -- is asking a federal judge in Utah to issue an injunction prohibiting Aereo from operating.

"Aereo is an unauthorized Internet video delivery service that is receiving, converting, copying, and retransmitting broadcast signals to its subscribers for a fee without authorization from the copyright owners,” Community Television says in its complaint.

Aereo already faces virtually identical lawsuits in New York, where it launched in 2012, and Boston, where it rolled out earlier this year. So far, the startup has defeated broadcasters' attempts to shutter the service in New York, where a trial judge and the 2nd Circuit Court of Appeals ruled that the company doesn't appear to infringe copyright. A federal judge in Boston likewise said recently that he is inclined to reject the broadcasters' request to prohibit the service from operating.

Aereo argues that its service is legal due to its design, which relies on thousands of tiny antennas to capture and over-the-air TV shows. The company then streams shows to users on an antenna-to-user basis. Aereo says it has the same legal rights as consumers to capture over-the-air signals. The company also says its streams are “private” -- as opposed to “public performances” -- because each stream comes from a separate antenna.

But the TV broadcasters contend that Aereo is “publicly” performing the shows -- which would infringe copyright. “It simply does not matter whether Aereo uses one big antenna or hundreds of tiny ones to receive local broadcasts,” Community Television argues. “No amount of technological gimmickry by Aereo changes the fundamental principle of copyright law that those who wish to retransmit copyrighted broadcasts may do so only with the copyright owners' authority.”

Kent Crawford, general manager of KUTV and KMYU, said in court papers that Aereo is harming the stations by giving people a reason to cancel their cable video subscriptions, which could eat into the broadcasters' retransmission fees. “To the extent that Aereo siphons viewers ... and causes them to cancel their cable subscriptions (also known as cord cutting), the stations will be harmed because retransmission consent fees are typically paid on a subscriber basis,” he says.

Crawford also says that Aereo's emergence “will unquestionably change the dynamics in the retransmission consent negotiations and undermine the stations negotiation position.” He adds that cable and satellite companies “inevitably” will “take the position that they should have to pay less, or nothing at all, for retransmission consent rights given that Aereo pays nothing for the same broadcast content.”

The legal issues posed by Aereo are unsettled. Even though judges in New York seem to be siding with Aereo, judges in other parts of the country have sided with TV broadcasters in similar lawsuits involving the Aereo rival FilmOn X (formerly called Aereokiller). A judge in Washington, D.C. recently prohibited FilmOn X from operating anywhere in the country except for New York, Vermont and Connecticut (the three states within the 2nd Circuit, which ruled in April that Aereo could continue to operate while the litigation was pending). A trial judge in California also issued an order banning FilmOn X from operating in nine western states. FilmOn X has appealed both of those rulings.