NEW YORK -- A startup company can continue to send live TV programming to iPhones and other mobile devices in the city despite objections from major broadcasters that say expansion can threaten the free broadcasting of events such as the Super Bowl, a judge ruled Wednesday.
U.S. District Judge Alison Nathan said she understood how the service provided by the company, Aereo, may be unfair to broadcasters. But she said the law left her no choice but to reject a request by News Corp.'s Fox and other broadcasters to pull the plug on the company.
Aereo lets customers capture over-the-air broadcasts for viewing on iPhones, iPads and computers for $12 a month. A copyright infringement lawsuit was filed by Fox, ABC, CBS, NBC and others, accusing Aereo of copying and retransmitting their programming over the Internet unlawfully.
Aereo argued that it was providing a legal, alternate platform for free TV broadcasts and was merely letting users rent a remotely located antenna to access content they could receive for free by installing the same equipment at home. Its chief executive told the judge at a hearing that extended litigation would be "the end of the company."
Nathan's ruling was on a request for a preliminary injunction. Generally, more evidence is presented before a judge makes a final ruling that can then be appealed, but Nathan said the broadcasters have indicated they are likely to appeal immediately. Lawyers on both sides did not immediately respond to messages for comment Wednesday.
The judge said the broadcasters are likely to suffer irreparable harm as a result of her ruling, including to their ability to negotiate with advertisers once viewers are siphoned from traditional distribution avenues, making it seem that fewer people are watching programs than actually are. She said it also will affect their retransmission agreements because companies will demand concessions from broadcasters to make up for the apparent loss in viewership. These deals, she said, amount to billions of dollars a year for broadcasters.
The judge said Aereo's service has only just begun to operate on any significant scale and the company has conceded that it intends to expand. She noted that the service had grown from 100 users to 3,500 users this year before a hearing she conducted several weeks ago and that Aereo had conducted surveys suggesting its services could prompt a substantial portion of its subscribers to cancel their cable TV subscriptions.
She added that broadcasters' "showing of imminent irreparable harm is substantial, but not overwhelming."
In siding with Aereo, the judge said the case probably would have been decided in favor of the broadcasters were it not for a ruling by the U.S. 2nd Circuit Court of Appeals in Manhattan in a case challenging Cablevision's Remote Storage DVR system. Cablevision was found not to violate copyrights in the case.
The judge noted that Aereo's lawyers had argued that, like Cablevision, it effectively rents to its users remote equipment comparable to what they could install at home. The broadcasters had argued that the judge should conclude Aereo engages in a public performance by transmitting the programming.
The judge said arguments by broadcasters in the Aereo case were "profoundly similar to those already considered and rejected" by the appeals court.
"This court does not believe it would be appropriate to blaze a trail that runs opposed to the direction dictated by Cablevision," she wrote.