US Supreme Court Hears Arguments in Aereo Case - AVS Forum
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post #1 of 162 Old 04-22-2014, 02:42 PM - Thread Starter
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The Supreme Court of the United States (SCOTUS) heard arguments today in the case of American Broadcasting Companies, Inc. v. Aereo, Inc., in which ABC is petitioning the court to block Aereo from streaming over-the-air content to subscribers via the Internet without paying retransmission fees as cable companies do. Many amicus briefs have been filed in support of both sides, so the battle is joined, and the ultimate legal arbiters in this country have their work cut out for them.

 

For some background on Aereo, check out this news item; there's also an official AVS Aereo discussion thread here. To see the SCOTUS blog about the case, go here.

 

In an article posted on re/code today, some of the justices' questions and comments are revealed. For example, Justice Sonia Sotomayor read a description of Aereo's business and asked, "Why aren't they a cable company?" Justice Elena Kagan went on to say, "From the user's perspective, it's exactly the same as what's available on cable."

 

In an article today on the New York Times website, Chief Justice John Roberts is quoted going even farther, saying to Aereo's lawyer, "Your technological model is based solely on circumventing legal prohibitions that you don't want to comply with." Aereo claims that, because it "rents" a separate antenna to each subscriber, the streams are not public performances under current copyright law and thus not subject to retransmission fees to broadcasters.

 

On the other hand, several justices were concerned about how their decision might affect other cloud-based services. In the same NY Times article, Justice Stephen Breyer is quoted as saying, "What disturbs me on the other side is, I don't understand what a decision [against Aereo] should mean for other technologies" such as cloud computing.

 

 

This is a fascinating case, balancing technological innovation, copyright infringement, and online delivery. The Supreme Court's decision could have major repercussions for the entire television industry, permanently reshaping the broadcasting landscape. I'll certainly be watching for any developments and report them here. Meanwhile, what's your take on it? Is Aereo a trendsetter or thief?

 

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post #2 of 162 Old 04-22-2014, 04:03 PM
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Its not so different than the slingbox concept that has been around for a while; it was never illegal for someone that has cable to provide a slingbox feed to someone elsewhere - essentially renting out their antenna/cable subscription. The only difference conceptually is the volume and a bigger potential for profit loss/gains.
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I recently saw Katie Couric interview the CEO of Aereo.  Personally, I agree with Aereo's position.  Based on the statutes, what they are doing seems to be legal, though it rides a fine line depending on interpretation.  In any case, I think it would be a mistake if the Supreme Court ruled against Aereo, based on the current statutes.  If the production studios and cable companies have a problem with it then it is on them to either adapt or push the legislative bodies (not the court system) to come up with reasonable adjustments to the existing laws and pass them.

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post #4 of 162 Old 04-22-2014, 04:15 PM
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Originally Posted by mo949 View Post

Its not so different than the slingbox concept that has been around for a while; it was never illegal for someone that has cable to provide a slingbox feed to someone elsewhere - essentially renting out their antenna/cable subscription.
You're confusing "legal" with "unlikely to be enforced unless it reaches a certain threshold". HBO is on record that they aren't likely to kick in your door for sharing your Go subscription ,either, though doing so does violate their terms of service. That doesn't make it legal, just not enforced.

Technically, copying your DVDs is made illegal (despite the right to make backup copies) by the DMCA. However, it's unlikely you would ever be hauled into court unless you started selling them.
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Originally Posted by mo949 View Post

Its not so different than the slingbox concept that has been around for a while; it was never illegal for someone that has cable to provide a slingbox feed to someone elsewhere - essentially renting out their antenna/cable subscription. The only difference conceptually is the volume and a bigger potential for profit loss/gains.

 

I thought the ruling that saved Slingbox was that people were free to consume content that they had paid for in pretty much any manner they wish.  I don't think it's actually legal to use a Slingbox to sling media to someone else.

 

This is why Aereo's case is grounded on the fact that each consumer has their own antenna and DVR storage space, just remotely located.  If there was any sharing of content between different consumers then it wouldn't be legal.

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post #6 of 162 Old 04-22-2014, 04:21 PM
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Originally Posted by HockeyoAJB View Post

I recently saw Katie Couric interview the CEO of Aereo.  Personally, I agree with Aereo's position.  Based on the statutes, what they are doing seems to be legal, though it rides a fine line depending on interpretation.  In any case, I think it would be a mistake if the Supreme Court ruled against Aereo, based on the current statutes.  If the production studios and cable companies have a problem with it then it is on them to either adapt or push the legislative bodies (not the court system) to come up with reasonable adjustments to the existing laws and pass them.
Or they could just sell off their spectrum to the feds, give up their transmitters and put Aereo out of business while eliminating free TV completely. They'd get rid of all those "OTA freeloaders" completely that way and we'd all have to pay regardless of what channels we currently watch.

I'm not sure I like that alternative.
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post #7 of 162 Old 04-22-2014, 04:24 PM
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Originally Posted by HockeyoAJB View Post

I thought the ruling that saved Slingbox was that people were free to consume content that they had paid for in pretty much any manner they wish.  I don't think it's actually legal to use a Slingbox to sling media to someone else.

The owner of the box and those considered living in the household are the only ones who have rights to the content. It's for your own use, not for your friends.
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This is why Aereo's case is grounded on the fact that each consumer has their own antenna and DVR storage space, just remotely located.  If there was any sharing of content between different consumers then it wouldn't be legal.
Which is exactly what you would be doing if you allowed someone else to connect to your Sling. That's what got ReplayTV in hot water - people sharing passwords to connect to their boxes. The fact that it also took down a method of commercial skipping was icing on the cake for the networks.
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post #8 of 162 Old 04-22-2014, 04:27 PM
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Originally Posted by NetworkTV View Post

Quote:
Originally Posted by mo949 View Post

Its not so different than the slingbox concept that has been around for a while; it was never illegal for someone that has cable to provide a slingbox feed to someone elsewhere - essentially renting out their antenna/cable subscription.
You're confusing "legal" with "unlikely to be enforced unless it reaches a certain threshold". HBO is on record that they aren't likely to kick in your door for sharing your Go subscription ,either, though doing so does violate their terms of service. That doesn't make it legal, just not enforced.

Technically, copying your DVDs is made illegal (despite the right to make backup copies) by the DMCA. However, it's unlikely you would ever be hauled into court unless you started selling them.

I guess we will both remain confused until the court makes its ruling then wink.gif

I'm with Aereo on this one.
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The slingbox middlemen aren't sharing the content either, they just act as a remote antenna/payment vehicle for customers in other countries.
It's still a third party. That wouldn't wash anymore than it did with Kazaa.

Further, unlike with Aereo, Sling is an outright box purchase. Aereo charges a fee equal to or exceeding that of Amazon or Netflix, both of which not only make their own content for that price, but buying content from studios - in addition to the cost of sending it along. Further, there are plenty of other boxes that access content at no cost beyond a one time flat lifetime fee.

At $8 a month, does Aereo really think the networks are supposed to believe they aren't charging for the content?
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post #10 of 162 Old 04-22-2014, 04:35 PM
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If I was still abroad, I would think 8$ a month for a remote system would be a bargain...
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.

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I thought the ruling that saved Slingbox was that people were free to consume content that they had paid for in pretty much any manner they wish.  I don't think it's actually legal to use a Slingbox to sling media to someone else.

 

Not true.

The owner of the box and those considered living in the household are the only ones who have rights to the content.

 

I'm not seeing how what you wrote is any different than what I wrote.  Your post simply expands on who that consumer is, i.e. paying consumer = owner of box and the people living with them, which is what I meant.

 

I think you meant to disagree with the post above mine.

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post #12 of 162 Old 04-22-2014, 04:38 PM
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I guess we will both remain confused until the court makes its ruling then wink.gif
We?

I know the difference between legal and unenforced. It's illegal to jaywalk, but most people are never ticketed for it. It's illegal to go even 1 mile over the speed limit, but there are few cops that will ticket you for such a small amount.
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I'm with Aereo on this one.
While I think a service like Aereo is something that should exist, I can't side with Aereo's methods that set out to deliberately avoid preserving copyright. What they're doing is the equivalent of counting cards in a casino.

It's fun to think they're crusading against the "fat cats", but even the fat cats have rights to preserve their business through legal means. People may not like the model, but it's their right to have it.
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Originally Posted by HockeyoAJB View Post

.

I'm not seeing how what you wrote is any different than what I wrote.  Your post simply expands on who that consumer is, i.e. paying consumer = owner of box and the people living with them, which is what I meant.

I think you meant to disagree with the post above mine.
I altered my post to agree with you. I misread it the first time I posted.
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post #14 of 162 Old 04-22-2014, 04:40 PM
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It's fun to think they're crusading against the "fat cats", but even the fat cats have rights to preserve their business through legal means. People may not like the model, but it's their right to have it.


You have an interesting idea of fun. I'm not surprised we disagree.
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If I was still abroad, I would think 8$ a month for a remote system would be a bargain...
Except Aereo would definitely be doomed if they provided a terrestrial OTA signal not just out of market, but out of the country. You can't subscribe to Aereo abroad.
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You have an interesting idea of fun. I'm not surprised we disagree.
Certain people seem to take a large amount of glee in taking down any business that dares to go from small to big. We do the same thing with celebrities.

Don't forget, Walmart started out as a single discount store. Home Depot was once one store they could hardly fill with merchandise. The difference between them and the small Mom and Pop stores is they figured out how to grow and become the big box.

Amazon is the same way - and someday some business will come along and eat their lunch. It's their job and obligation to investors to put that off as long as possible.

The same goes for the media companies.
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From the way I understand it you can't even subscribe to Aereo from most places in the US yet....


this case is definitely up there in impact/interest, equivalent to anything related to net neutrality imo
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post #18 of 162 Old 04-22-2014, 04:49 PM
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From the way I understand it you can't even subscribe to Aereo from most places in the US yet....
Don't feel bad for them yet - those "few little places" they are available contain a large percentage of the population of the country. It's not about how many markets, it's which ones.

That's why D* can claim they serve 95% of the local TV viewers despite only carrying about 2/3 or so of the affiliates nationwide: they offer the markets that serve 95% of the population, not 95% of the available markets.
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post #19 of 162 Old 04-22-2014, 08:19 PM
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[edited for soberness smile.gif]. I'm quite glad I can ask someone to record something for me freely available ota and compensate them too - oh wait I can't since they don't operate in california.

They're available in 11 cities only, none of which are in california either. California is greater than 10% of the US population.

https://aereo.com/coverage
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post #20 of 162 Old 04-23-2014, 07:46 AM
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...

In an article posted on re/code today, some of the justices' questions and comments are revealed. For example, Justice Sonia Sotomayor read a description of Aereo's business and asked, "Why aren't they a cable company?" Justice Elena Kagan went on to say, "From the user's perspective, it's exactly the same as what's available on cable."

...

 

The obvious response to that question is "Why aren't they a storage facility/Radio Shack/rent-a-center?"  If you were to combine those three things, Aereo is what you would get.

 

Let's face it, the main reason anyone would even consider paying Aereo for their service is because getting decent OTA reception can be hit or miss.  Having DVR capabilities and easy access on your mobile devices is certainly a plus, but you can buy equipment to do that yourself.

 

Question: "Before Aereo came along, who benefited from the fact that decent OTA reception is not a given in everyone's homes?"

 

Answer: "The cable/satellite companies, and by extension, the networks."

 

The cable/satellite companies benefit because they get customers who want basic network channels, but are otherwise unable to get them.  Also, by bundling the network channels with a bunch of additional cable/satellite channels (most of which the customers could really care less about) they feel they can justify charging these customers a higher rate.

 

The networks benefit because they can charge the cable/satellite companies for the right to rebroadcast their content.  And cable/satellite companies can afford to pay more than the local broadcast TV stations.  In the end, the networks get the same or even higher viewership, so they don't lose money from advertisers either.  It's a win-win for them.

 

To me, these lawsuits are not really about copyright infringement.  That is merely the case the cable/satellite companies and networks are trying to make at present.  They could probably care less that Aereo is making money.  What they are worried about is that companies like Aereo could cost them customers and, to them, customers = money.

 

To be clear, I don't begrudge any company the right to try and make money or protect their investments by legal means, no matter how big or small that company may be.  There are two reasons why I support Aereo in this case...

 

1) I feel that they have a good position, legally speaking.

 

2) Regardless of whether or not Aereo truly cares about providing a better/cheaper service for its potential customers, I do believe that consumers would ultimately benefit from a decision in Aereo's favor, or at least one that opens the door for more competition.

 

I don't believe that the networks would sell off their OTA spectrum just to prevent companies like Aereo from making money.  That would go over like a lead balloon with the many people who currently rely on OTA and could cost them potential viewers in the long run, resulting in less advertising revenue.  Instead, I think that cable/satellite companies would be forced to compete with companies like Aereo.  And this could mean cheaper prices for consumers or at least the option to pay for local networks only at a price that is comparable to Aereo's.

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Freight forwarding also comes to mind; shipping and handling.
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Originally Posted by mo949 View Post

Its not so different than the slingbox concept that has been around for a while; it was never illegal for someone that has cable to provide a slingbox feed to someone elsewhere - essentially renting out their antenna/cable subscription. The only difference conceptually is the volume and a bigger potential for profit loss/gains.

Absolutely. They rent the antenna and DVR and the customer and Aereo "split" the cost of the antenna backhaul (they both pay for the Internet capacity required).

The thing worth noting is that the major networks can do this cheaper and monetize at a higher margin if they choose to. They don't need the antenna arrays and they're closer to the content.

The problem is, they'd rather keep the multichannel bloated corpse afloat and continue to extract far larger revenues from the antiquated model than adopt a direct consumer billing/distribution model. The Internet has been generating endless disruptive innovations for Big Content. Until they adopt and continuously seek out the most technically efficient means of operation, they're always going to be exposed to loss due to innovation.

This is a fight against progress, the same Groundhog Day loop we've been struggling with Big Content over for nearly 20 years - repeating with each babystep.

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Has there been any third party investigation and audit of the Aereo hardware infrastructure? I mean does each of those tiny antennas feed a dedicated tuner per subscriber?

Because if those antennas are acting as an array, meaning they form a common RF feed that is then split among the tuners, that would clearly be a "cable system" and subject to the same rules and regulations. Or does that matter in a legal sense as long as there is a physical antenna for each subscriber?

And does each subscriber really have a dedicated tuner 24/7/365? If the tuner was time shared across more than one customer would that cause a legal issue for them as well?

IMPO, this system is doomed even if they win this case. It is a technological kludge just to get around the legal issues. It has a fixed practical limit to the number of subscribers to remain cost competitive.

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post #24 of 162 Old 04-23-2014, 11:32 AM
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Absolutely. They rent the antenna and DVR and the customer and Aereo "split" the cost of the antenna backhaul (they both pay for the Internet capacity required).

The thing worth noting is that the major networks can do this cheaper and monetize at a higher margin if they choose to. They don't need the antenna arrays and they're closer to the content.

The problem is, they'd rather keep the multichannel bloated corpse afloat and continue to extract far larger revenues from the antiquated model than adopt a direct consumer billing/distribution model. The Internet has been generating endless disruptive innovations for Big Content. Until they adopt and continuously seek out the most technically efficient means of operation, they're always going to be exposed to loss due to innovation.

This is a fight against progress, the same Groundhog Day loop we've been struggling with Big Content over for nearly 20 years - repeating with each babystep.

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The networks will go to an all internet model in the future and so will the satellite companies. TV towers and satellite dishes for consumer TV use will be obsolete probably after 2050. But that doesn't change the fundamental issue of content ownership. It costs a lot of money to make these prime time shows - I know, I work in the industry. Somebody has to pay! The big networks will get their money if not by direct advertising, then by subscription or a combination of both. Look at all the ad supported cable networks, they run commercials and you pay a subscription as well - this idea is nothing new.

We just aren't there yet with internet technology. Close but not yet. Streaming today is still hit or miss performance wise in a lot of cases.

If you understand the costs associated with maintaining a TV transmitter and tower, most TV stations would abandon that in a heartbeat if you could ensure they would get the same level of viewership with internet distribution. All they have to do is cut the cable to the transmitter and feed a $1000 PC equipped with an encoder card. And in fcat they already do this as most TV stations have an internet feed. Going to a sole internet distribution model is no cost to them at all from a technological perspective - and they can still feed the legacy cable and satellite systems as well.

The internet just has to work a little better and it will. Aereo is not technological progress at all. It's a kludge to get around a legal problem in their business model.
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post #25 of 162 Old 04-23-2014, 01:20 PM
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The networks will go to an all internet model in the future and so will the satellite companies. TV towers and satellite dishes for consumer TV use will be obsolete probably after 2050. But that doesn't change the fundamental issue of content ownership. It costs a lot of money to make these prime time shows - I know, I work in the industry. Somebody has to pay! The big networks will get their money if not by direct advertising, then by subscription or a combination of both. Look at all the ad supported cable networks, they run commercials and you pay a subscription as well - this idea is nothing new.

We just aren't there yet with internet technology. Close but not yet. Streaming today is still hit or miss performance wise in a lot of cases.

If you understand the costs associated with maintaining a TV transmitter and tower, most TV stations would abandon that in a heartbeat if you could ensure they would get the same level of viewership with internet distribution. All they have to do is cut the cable to the transmitter and feed a $1000 PC equipped with an encoder card. And in fcat they already do this as most TV stations have an internet feed. Going to a sole internet distribution model is no cost to them at all from a technological perspective - and they can still feed the legacy cable and satellite systems as well.

The internet just has to work a little better and it will. Aereo is not technological progress at all. It's a kludge to get around a legal problem in their business model.
To add to the above, it should be pointed out that Aereo is effectively streaming TV programs that even the stations themselves don't have the right to stream. While most new shows come with those rights, there are quite a few that have been on long enough that those rights were not negotiated in those contracts. In some cases, the rights have been sold to exclusive providers like Netflix, Hulu or Amazon.

Forget retransmission money - this issue has the potential to reduce what studios can recover from series sold to streaming partners.

I'm actually shocked that more of an issue hasn't been made of that by the stations, networks and studios.
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To add to the above, it should be pointed out that Aereo is effectively streaming TV programs that even the stations themselves don't have the right to stream. While most new shows come with those rights, there are quite a few that have been on long enough that those rights were not negotiated in those contracts. In some cases, the rights have been sold to exclusive providers like Netflix, Hulu or Amazon.

Forget retransmission money - this issue has the potential to reduce what studios can recover from series sold to streaming partners.

I'm actually shocked that more of an issue hasn't been made of that by the stations, networks and studios.

 

I think they are taking it one step at a time.  If the Supreme Court rules that Aereo is violating copyright laws (i.e. that they are in fact rebroadcasting content rather than merely renting out the equipment customers need to stream content to themselves) then I would fully expect them to make more of an issue about the exclusive streaming rights agreements these companies have, so that these companies could sue for damages (if they choose to go that route).

 

On the other hand, if the Supreme Court rules in favor of Aereo (i.e. that Aereo's customers are in fact using their own equipment, rented from Aereo, to stream to themselves) then the streaming rights argument becomes null and void since it is perfectly legal for an end consumer to stream to themself.

 

How much money the studios stand to gain or loose due to the outcome of this decision really shouldn't be a factor in the decision any more than how much money Aereo stands to gain or lose.  That only becomes important after the legality has been determined.

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post #27 of 162 Old 04-23-2014, 06:21 PM
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Don't forget if Aereo wins the cable and satellite companies will also cry foul as to why should they pay re transmission fees. This case is definitely interesting, legal minds or not.
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post #28 of 162 Old 04-23-2014, 08:33 PM
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Don't forget if Aereo wins the cable and satellite companies will also cry foul as to why should they pay re transmission fees. This case is definitely interesting, legal minds or not.

 

One could ask, "How is Aereo not a cable company?" except for some implementation details. Maybe the ultimate solution is to refine the legislation that separates a community antenna or a building antenna from cable companies and companies that quack like cable companies.

 

The whole case just feels like there can be unintended consequences in just about any ruling.


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post #29 of 162 Old 04-24-2014, 12:48 AM
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On the one hand it's easy to see how Aereo's renting-an-antenna setup is just a clever way to avoid business expense (do any of us know a company that goes out of it's way to increase it's expenses?).

On the other hand the premise of their argument/business-model seems kind of legit - if I get bad OTA reception at my house, but two doors down the neighbor gets great reception and let's me run a cable to share his antenna should either of us be legally required to now "pay" for the (intended to be free) OTA programming we're sharing?
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post #30 of 162 Old 04-24-2014, 01:07 AM
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On the one hand it's easy to see how Aereo's renting-an-antenna setup is just a clever way to avoid business expense (do any of us know a company that goes out of it's way to increase it's expenses?).

On the other hand the premise of their argument/business-model seems kind of legit - if I get bad OTA reception at my house, but two doors down the neighbor gets great reception and let's me run a cable to share his antenna should either of us be legally required to now "pay" for the (intended to be free) OTA programming we're sharing?
Win or lose I don't think Aero will be profitable in the long term, and so will fade away.

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