I am wearing all black as I write this because it might as well be a funeral.

Sadly, Aereo is dead. The startup–which I had once believed to be a potential comeback kid has reached the end of its long and arduous battle; however, in a desperate attempt to retain hope, I am consoled by the revolutionary impact the small company seems to have made on the television industry. Aereo, a service provider that utilized small antennas to transmit broadcast signals to individual subscribers, filed for bankruptcy protection last week. Founder and CEO Chet Kanojia wrote in a letter to consumers:

We have traveled a long and challenging road. We stayed true to our mission and we believe that we have played a significant part in pushing the conversation forward, helping force positive change in the industry for consumers.

Despite valiant efforts, Aereo just could not overcome the legal and regulatory opposition that came after the Supreme Court decided Aereo’s business model was illegally violating copyright.

Shortly after the decision was released, Aereofiled for a cable license necessary for continued operation; however, the “Plan B” approach did not prove to be lucrative as the recent bankruptcy decision is Aereo’s best hope for maximizing its remaining value. With the filing for Chapter 11 reorganization proceedings, Aereo can put its legal woes behind it and sell any remaining assets that exist in the company. Lawton Bloom of Argus was appointed to serve as Chief Restructuring Officer.

William Baldiga, Aereo’s lawyer, announced that an auction of assets should occur on February 17, 2015, pending an approval hearing. “The company is now highly focused on devoting all its energy and limited resources to a transaction that will produce the highest and best return for our creditors and shareholders.”

U.S. Bankruptcy Judge Sean Lane granted various requests submitted by Aereo to allow what is left of the company to remain active during the liquidation period. Aereo has fired 75 of its 88 employees and greatly decreased remaining employee pay. Kanojia’s salary was cut in half.

While Aereo barely gained footing before its huge legal battle, the service forced major broadcasters to play offense instead of defense, recognizing a definitive hole in the cable market. Cord-cutters need programming too and Aereo may be the catalyst for a new business trend. Current broadcsting companies have already begun recognizing the internet television demand. CBS recently announced CBS All Access, a streaming service available by subscription for a $5.99 monthly fee. HBO also recently announced a streaming service independent of a cable subscription.

Although only existing content companies are dominating internet television by way of new services, it’s only a matter of time before new startups, supported by cloud technology, appear. The FCC is bracing itself for such an occurance. Last month, FCC chairman Tom Wheeler proposed a new rule that would allow internet television providers to license programming in an identical way to current cable and satellite companies. In an official FCC Blog post, Wheeler wrote:

Aereo recently visited the Commission to make exactly this point – that updating the definition of an MVPD [multichannel video programming distributor] will provide consumers with new choices. And perhaps consumers will not be forced to pay for channels they never watch.

So, although we are in a state of bereavement, heartbroken to see Aereo go, it will forever be the internet TV martyr that paved the way for the future of subscription streaming services.

Thank you, Aereo, for such innovation. You will be missed.

The post Aereo: The Martyr Files for Bankruptcy appeared first on Law Street.

Introducing first, in one corner, weighing the equivalent of nine justices, hailing from Washington D.C., backed by broadcasters, the well educated, ever respected SUPREEEEME COURT!

In the other corner, less than one pound and the size of a dime, young and feisty, hailing from New York, the crowd favorite, the underdog, the AEREO ANTENNAAAA!

Well, folks… we all know how this fight ended. The Supreme Court, in a 6-3 decision, beat Aereo’s butt on the grounds of copyright infringement.

Nobody thought that Aereo, bruised and beaten from being on the ropes, would ever return to the ring. But have we found our comeback kid? It seems Aereo wants to brawl after broadcasters requested that a New York court order Aereo to cease business across the country. In new court papers, Aereo demands another chance. The Internet television provider insists it be given the necessary cable license for operation, legally allowing it to transmit broadcast TV shows.

“It would be illogical and fundamentally unfair to find that Aereo’s ‘Watch Now’ functionality is a ‘cable system’ …for the public performance analysis, but is not entitled to a compulsory license under the same,” Aereo asserts.

Odds are up in the air for this aggressive little company. A competitor of similar build, ivi TV was recently shot down after also requesting the same compulsory license in New York. So, why is the crowd still cheering for Aereo? Its individual attention to its fans! ivi TV’s transmissions were nationwide while Aereo only offered shows to those who subscribed to its service. This slight difference in technique can be just enough to bring victory to Aereo in this rematch with the judicial system.

Aereo enters this match insisting it’s a clean fighter, reminding the courts that it has “failed to show any imminent irreparable harm.” The company asks, “What better proof could there be that claimed harms are not imminent…than what actually happened when the complained-of actions went on for years?” Hope for this underdog comes from statements like that of Supreme Court Justice Stephen Breyer who has said that there are no “behind the scenes technological differences” that discern Aereo from actual cable companies.

Meanwhile, more fighters are gearing up to enter the competition. In an attempt to fill the Aereo void, TiVo has come forward with its new ‘OTA’ device, and Roku has plans for smart televisions with Aereo-like technology already integrated into the devices.

Let’s not forget about the common theme in all of this, however: that damn cloud. Problems surrounding Cloud service have not specifically been addressed, even in the Supreme Court opinion of Aereo’s ruling. Not wanting to overreach, the Justices cited that they could not “answer more precisely how the Transmit Clause or other provisions of the Copyright Act will apply to technologies not before us… Questions involving cloud computing (remote storage) DVRs and other novel issues not before the Court… should await a case in which they are squarely presented.”

So, much like a cloud, the fate of this new technology is still up in the air. For now, all we can do is follow the IP scuffles that occur on the ground and in the courtroom.

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Alexandra Badalamenti (@AlexBadalamenti) is a Jersey girl and soon-to-be graduate of Fordham University in Lincoln Center. She plans to enroll in law school next year to study Entertainment Law. On any given day, you’ll find her with big blonde hair, high heels, tall Nashville dreams, and holding a newspaper or venti latte.

Featured image courtesy of [Kristin Wall via Flickr]

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Tech startup Aereo continued to disrupt the market this week when the Supreme Court heard arguments in the American Broadcasting Companies Inc. v. Aereo Inc. case. The case has garnered lots of attention in the technology community due to the implications it may have on Cloud services. Essentially, Aereo provides an electronic antenna that picks up and broadcasts existing signals with the added bonus of being a virtual recorder and storage locker.  Aereo’s creation is brilliant, but as seems to be the case with many such tech developments, it may have outpaced current laws and policy.

Broadcasting companies believe copyrighted content is illegally transmitted through the internet from Aereo to Aereo’s paying subscribers. Companies such as ABC, NBC, CBS, Fox, and PBS allege that the company is publicly performing by transmitting content without proper licensing and payment of royalty fees — a violation of intellectual property laws.

Broadcast Companies are using the 1976 Copyright Act definition of transmission to prove that Aereo’s transmission of content is a public performance, while Aereo’s customers are private performers. This distinction is important because private performances are exempt from obtaining licenses and paying fees for copyrighted content, while public performances are not.  Paul Clement, the attorney working on behalf of the broadcast company petitioners, recognizes that a person or company that sells traditional antennas would not be involved in a public performance; however, he asserts that Aereo’s use of ongoing services, even if considered a rented service, exploits the use of copyrighted works and therefore represents a public performance and a violation of the Copyright Act.

In response to questions from Justices Alito and Kennedy about the difference between Aereo’s services and the DVR service provided by companies like CableVision, Clement responded that unlike Aereo, CableVision acquired licenses to receive their content in the first place. Because CableVision’s customers are recording and storing content for private use that the company was given permission to transmit, CableVision’s DVR service was rightfully excluded from obtaining a reproduction license. Aereo did not obtained permission to access the content that they allow their customers to stream, record, and store.

The use of Aereo allows its customers to only view local over-the-air broadcasts, the signals for which are free to the public, which makes the sale and private use of antennas to disseminate these broadcasts a lawful act. Aereo asserts that they are not publicly performing because they are equipment providers, no different than a company that sells antennas. This equipment provides access to free, public content, which is different from providing content in the first place. Aereo attorney David Frederick cited Sony Corp. v. Universal City Studios as precedent for the lawful use of Aereo’s DVR service. The Sony decision held that consumers have the right to record local over-the-air broadcasts for private use. Since Aereo is renting equipment that provides access to free local content, the company argues that they’re not in violation of the Copyright Act.

What is bothersome to Aereo, and potentially problematic to Cloud service, is the interpretation of the Copyright Act’s Transmission Clause. Aereo believes that the petitioners’ interpretation qualifies any device or process disseminating works to the public, as a public performance, thereby requiring licenses and payment of royalties, which could be detrimental to cloud computing. Clement; however, was clear on the subject of cloud computing and doesn’t believe a decision in his clients’ favor should threaten that technology’s future.

Whether anyone believes that a decision against Aereo should threaten Cloud’s future or not is irrelevant — the more important question is, could it be applied when considering cloud computing? I’m not sure how the Supreme Court will rule, but I do believe this decision will affect cloud computing no matter the outcome.

Aereo is the twenty-first century solution to the discontinued use of antennas and VCRs. If the Supreme Court rules in its favor, Aereo could build on its existing technology and become an entity more comparable to a cable company, at which time they should be responsible for proper licensing and adherence to copyright laws. Technology is constantly changing and challenging older, more established technologies and industries — this is exactly what drives continued innovation. A ruling against Aereo would stifle this innovative growth.

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Teerah Goodrum (@AisleNotes), is a graduate student at Howard University with a concentration in Public Administration and Public Policy. Her time on Capitol Hill as a Science and Technology Legislative Assistant has given her insight into the tech community. In her spare time she enjoys visiting her favorite city, Seattle, and playing fantasy football.

Featured image courtesy of [Adam Fagen via Flickr]

Teerah Goodrum

Teerah Goodrum is a Graduate of Howard University with a Masters degree in Public Administration and Public Policy. Her time on Capitol Hill as a Science and Technology Legislative Assistant has given her insight into the tech community. In her spare time she enjoys visiting her favorite city, Seattle, and playing fantasy football. Contact Teerah at staff@LawStreetMedia.com.

The post Aereo Technology Drives Innovation, But How Will SCOTUS Rule? appeared first on Law Street.