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US Supreme Court to hear media barons versus TV upstart Aereo tout suite

Justice Alito's recusal means bad news for broadcasters, good news for streaming biz

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The US Supreme Court has moved with impressive speed to announce [PDF] it will hear a case brought against TV streaming biz Aereo by major broadcasters.

The judges' verdict will either kill off the web upstart or leave the big networks having to reconsider their current business model.

“We are gratified that the Supreme Court has granted our petition to review issues that both sides recognize as significant, and we look forward to making our case to the Court,” said NBC Networks and ABC in a joint statement.

Aereo has built up data centers in ten US cities, each packed with miniature antennas and hardware that pick up broadcast TV signals, store the video like a digital video recorder (DVR), and stream material over the internet to subscribers. The company argues that this is no different from an individual using their own aerial to pick up transmissions.

"This case is critically important not only to Aereo, but to the entire cloud computing and cloud storage industry. The landmark Second Circuit decision in Cablevision [Register passim] provided much needed clarity for the cloud industry and as a result, helped foster massive investment, growth and innovation in the sector," said Aereo's CEO Chet Kanojia.

"The challenges outlined in the broadcasters' filing make clear that they are using Aereo as a proxy to attack Cablevision itself and thus, undermine a critical foundation of the cloud computing and storage industry."

Not surprisingly the broadcasters disagree strongly, claiming that Aereo's business plan is effectively piracy. The networks sued Aereo within months of the service going online but so far have had no success in the courts, leading to the decision to take the case to the Supremes at the end of last year – a decision Aereo said it welcomes.

“We believe that Aereo’s business model, and similar offerings that operate on the same principle, are built on stealing the creative content of others," CBS told El Reg in a statement. We are pleased that our case will be heard and we look forward to having our day in court.”

Now the case will be heard by the highest court in the United States of America, but there is the possibility that the beaks may not be able to reach consensus. Justice Alito, one of the more reliably conservative and pro-business justices, has recused himself from the case, leaving the possibility of a split decision by the remaining eight members of the panel.

Alito gave no reason for his recusal, although in past cases where he has stepped down from the decision-making process it has been because he has a personal stake in one or other of the parties involved. If the court does come to a split decision then the ruling of the lower courts stands – meaning champagne corks all round at Aereo. ®

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