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Presto! After Supreme Court loss, Aereo says it's a cable company now

TV-streaming firm strikes back with 'Plan B' legal defense

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After months of claiming it had "no Plan B" if it lost its case before the US Supreme Court, TV-streaming outfit Aereo has told a judge that it wants to remain in business – as a cable operator.

In a four-page letter to US District Judge Alison Nathan, first revealed by the Hollywood Reporter, Aereo's attorneys make the case for a brand new legal defense under Section 111 of the Copyright Act, which governs how cable companies pay licensing fees for retransmissions of copyrighted works.

According to the letter, that section of the law applies to Aereo because the Supreme Court, in its ruling against the company, found that its practices were "highly similar" to those of cable companies.

"Under the Second Circuit's precedents, Aereo was a provider of technology and equipment with respect to the near-live transmissions at issue in the preliminary injunction appeal," the letter argues. "After the Supreme Court's decision, Aereo is a cable system with respect to those transmissions."

Should the court agree with Aereo's rather extraordinary claim, the company would be entitled under Section 111 to a compulsory license to rebroadcast the TV programs it captures on its servers, provided it pays standard, semiannual royalty fees (like cable companies do).

It's a Hail Mary play for the streaming-media firm, which, despite being backed by media mogul Barry Diller, looks to be all but doomed following the Supreme Court's ruling that its service violates copyright law.

"Aereo's eligibility for a Section 111 compulsory license must be decided on an immediate basis or Aereo's survival as a company will be in jeopardy," the letter goes on to state.

While that's probably true, however, Aereo's argument will be a tough sell to the court. According to a letter from lawyers representing major TV networks, which was filed jointly with Aereo's letter, this new defense represents such a complete about-face that it should be dismissed outright.

"[Aereo] represented to this Court, for example, that it could not qualify as 'a cable system' and, therefore, that cases interpreting the application of Section 111 to Internet retransmission services were 'irrelevant to the issues here'," the plaintiffs' letter recounts. "Before the Supreme Court, Aereo again represented that, as a factual matter, it did not satisfy the basic definitions that govern Section 111 eligibility."

Calling Aereo's change of tactics "astonishing," the broadcasters reiterate their request for an injunction banning the firm from retransmitting their broadcasts, saying that final resolution of the lawsuit "has been rendered nearly impossible by Aereo's refusal to clearly specify whether, when and in what fashion it intends to continue operating."

They seem to have a point. Elsewhere in its letter, Aereo claims that even if the court rejects its claim to Section 111, any injunction against Aereo must be limited to simultaneous rebroadcasting of TV programs, and that Aereo should be allowed to continue to operate if it only streams programs at a later time. So, while Aereo the streaming service may be finished (for now), Aereo the litigant looks poised to continue for some time to come. ®

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