This week, Cablevision released a 43-page white paper in which it condemns Aereo for transmitting TV programs without a license. The cable giant essentially argues that Aereo is acting like a cable company and therefore should have to pay the same retransmission fees as cable companies.
Cablevision obviously is worried that Aereo -- and any similar companies -- will encourage cord-cutting, which would cut into cable subscription revenue. Whether Aereo turns out to be a real financial threat remains to be seen. After all, Aereo itself isn't free, and the service only allows people to watch programs on the major networks, and not channels like AMC or HBO. Also, some observers have argued that cable companies could themselves profit from replicating Aereo's system, and streaming programs to subscribers without paying retransmission fees.
Regardless, Cablevision is taking an anti-Aereo stance. But that puts the company in an awkward position, because the legality of its remote DVRs is directly tied to Aereo's legality.
Here's why: Cablevision can only offer remote DVRs because a federal appeals court in New York ruled in 2008 that the devices were legal. The court rejected arguments that Cablevision was infringing copyright by “publicly” performing TV shows by transmitting copies from a remote DVR to a user's home. Instead, the judges said, the remote DVRs' transmissions to users were “private,” because users were watching their own individual copies.
That decision paved the way for the emergence of Aereo, which uses tiny antennas to capture over-the-air programs and then streams shows on an antenna-to-user basis. The company says it's legal for the same reason as Cablevision's remote DVRs -- each user receives an individual stream tied to a single antenna.
Given the prior court rulings, Cablevision clearly is worried that any anti-Aereo decision will call into question the legality of remote DVRs. But the company also wants Aereo stopped.
Cablevision's solution? The company says that courts should treat Aereo like a cable carrier because it is “functionally identical” to one. “Aereo offers a service functionally identical to a cable system. It captures over-the-air broadcast signals and retransmits them for subscribers to watch,” Cablevision says in its whitepaper. “In terms of the basic function it performs for subscribers, Aereo is not meaningfully different from cable or satellite providers, services that have long been required to pay statutory royalties and retransmission consent fees.”