Aereo, which recently admitted it had no Plan B, now needs a Plan C.
That’s the upshot of a determination by the US Copyright Office, which in a July 16 letter refused to accept royalty fees from the video streamer “without comment.”
Aereo, backed by Barry Diller and IAC, recently submitted $5,310.74 to the C.O. to take advantage of a compulsory licensing system that allows certain cable companies to retransmit broadcast signals.
Aereo’s second grand plan was to operate as the cable company that, on June 25, the Supreme Court determined it to be.
Before that there was Plan A in which Aereo professed to be no more than a renter of broadcast equipment that allowed customers to receive over-the-air signals through the Internet.
The 2-year-old upstart has elicited the wrath of the broadcast community since it started.
Cable companies hate it for offering alternative viewing bundles for as little as $8 a month; networks hate it for circumventing hefty retransmission fees.
Aereo’s Plan B — to carry on as a cable company — kicked in after the
Supreme Court recognized the company as being more than just a renter of antennas and VCRs.
It decided instead that Aereo’s gimmick-driven means of retransmitting over-the-air broadcasts — using thousands of dime-sized antennas, each leased to a specific subscriber — put it in the realm of cable companies.
And because cable companies “perform publicly,” the court said, so does Aereo. Hence its obligation to pay retransmission fees.
Aereo’s initial response was to suspend operations. But in a surprise move this month, it embraced being a cable company.
However, rather than negotiate retrans fees with each network it carries, Aereo invoked a section of the Copyright Act that sets those fees under a complicated formula.
They’re much lower than negotiated fees, obviously, as the $5,310.74 Aereo submitted to the C.O. was for all of 2012 and 2013.
The C.O. is accepting Aereo’s payment only “provisionally,” it said, because “Internet transmissions fall outside the scope” of the copyright section that the newly styled cable company is trying to invoke.
Whether Aereo can ever return to Plan B, the C.O. continued, depends on “further regulatory or judicial developments.” By then, though, Aereo could be on to Plan D.