Indiana, PA - Indiana County

Stung by Supreme Court, Aereo suspends service

by EMILY STEEL New York Times News Service on June 29, 2014 1:24 AM

Aereo, the startup firm that threatened to upend the television industry, has hit the pause button.

Three days after the Supreme Court ruled that Aereo had violated copyright laws by capturing broadcast signals on miniature antennas and transmitting them to subscribers for a fee, the company suspended its service.

“We have decided to pause our operations temporarily as we consult with the court and map out our next steps,” Chet Kanojia, Aereo’s chief executive, said in a letter to customers sent Saturday morning under the heading “Standing Together for Innovation, Progress and Technology.”

Aereo said that the service would not be available after 11:30 a.m. Saturday and that it would give users a refund for their last paid month. The company had fewer than 500,000 subscribers in about a dozen metropolitan areas.

Customers paid $8 to $12 a month to rent one of Aereo’s dime-size antennas that captured over-the-air television signals. They then could stream and record programs from major broadcasters using their mobile phones, tablets, laptops and Internet-connected televisions.

In a 6-3 decision issued Wednesday, the Supreme Court sided with broadcasters in a case that was closely watched by the media and technology industries. The ruling comes as the foundation of the media business undergoes vast change reflecting a rush of new technologies and a rising number of consumers who are abandoning traditional pay-television subscriptions.

Aereo challenged the economics of the television business. Broadcasters worried that had the startup triumphed, it would have threatened the billions of dollars they received from cable and satellite companies in retransmission fees.

Broadcasters argued that Aereo’s business model violated copyright laws and was a high-tech way to steal their programs.

Aereo countered that its service was a digital-age solution for watching free over-the-air broadcasting.

The case was sent back to a lower court. Analysts and legal experts said it would be nearly impossible for Aereo to continue with its current business model.

Before the decision, Aereo, which was founded in 2012, said that it had “no Plan B” if it lost in court.

But on Saturday, Kanojia said Aereo’s journey was “far from done.” A spokeswoman underscored that the company was not shutting down, merely temporarily stopping its service.

“The spectrum that the broadcasters use to transmit over-the-air programming belongs to the American public, and we believe you should have a right to access that live programming whether your antenna sits on the roof of your home, on top of your television or in the cloud,” Kanojia said in his letter to Aereo users.

Kanojia quoted Charles F. Kettering, an American engineer whose inventions were essential to the creation of the modern automobile: “The world hates change, yet it is the only thing that has brought progress.”

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