The latest legal defeat for big TV broadcasters against the start-up company Aereo could lead to a Supreme Court showdown over your ability to get free television signals.
On Tuesday, the U.S. Second Circuit Court of Appeals said it wouldn't revisit its April ruling, in which a three-judge panel refused to issue an injunction halting Aereo, a service that steams over-the-air TV signals to consumers without paying broadcast networks.
Aereo charges a small, monthly fee to consumers for the service, which can be viewed on computer devices, including tablets.
In response, Fox Television Stations (one of the plaintiffs in the case) says it's considering taking the case to the Supreme Court, a move that would surprise no one who has followed the evolving legal battle.
"The 2nd circuit's denial of our request for an 'en banc' hearing, while disappointing was not unexpected. We will now review our options and determine the appropriate course of action, which include seeking a hearing in the U.S. Supreme Court and proceeding to a full trial on the merits of the case," said Fox in a statement.
Fox, ABC, CBS, NBC and other companies that broadcast over-the-air TV signals are all involved in the copyright case.
"We are not surprised by this decision, given that requests for a full en banc hearing are rarely granted," Dennis Wharton, a spokesman for the trade group the National Association of Broadcasters, said in an e-mail to the Bloomberg News Service. "We believe that the broadcasters will prevail when this case goes to trial, and that Aereo will be declared a copyright infringer."
And that trial could wind up being at the Supreme Court—if the justices decide to hear the case.
In April, Fox and Univision made threats about leaving free broadcast TV or producing different versions of its free signals if Aereo continued to relay its signals to consumers.
Aereo is backed by Barry Diller, the media mogul who was the first head of the Fox broadcast network in the 1980s. The company uses banks of tiny antennae to record and stream broadcasts for subscribers and relay them over the Internet to a computer-based device.
Its successful legal strategy, so far, is based on a 2008 ruling in the United States Court of Appeals for the Second Circuit. The case of Cartoon Network, LP v. CSC Holdings, Inc.,found that Cablevision had the right to record Cartoon Network programs using a DVR service that Cablevision hosted for the benefit of its subscribers.
In a July 2012 ruling, a U.S. district court denied the broadcasters' request for an injunction against Aereo, which is only marketed in New York City, citing the Cartoon Network decision. The judge in that case said without the Cartoon Network precedent, the broadcasters would have likely gained the injunction, based on copyright laws.
The broadcasters suffered a bigger setback in April 2013, when an appeals court also denied the injunction request. The Court of Appeals for the Second Circuit ruled in a 2-1 vote decision, "the district court correctly concluded that Aereo's system is not materially distinguishable from the system upheld in Cartoon Network LP, LLLP v. CSC Holdings, Inc."
To be sure, the legal battles over the Aereo case aren't finished, and there are industry observers who think the networks could prevail.
A similar case in California about a rival service called Aereokiller could lead to conflicting rulings—and an eventual date for Aereo and the broadcasters in the Supreme Court.
In December 2012, a Ninth Circuit judge ruled in favor of the broadcasters in a similar case—in a region that wasn't bound to the Cartoon Network decision.
The broadcasters followed with a similar lawsuit in May 2013 in District Court in Washington, D.C., against Aereokiller. The company is defending the two lawsuits.
Industry observers say the filing in the District of Columbia is significant, because the circuit gets close scrutiny by the Supreme Court.
In the long run, networks could be forced to rethink their business strategy about offering free TV signals if they lose the Aereo case. But such a decision would also face Congressional and FCC scrutiny. About 10 percent of people still watch TV using an antenna and not cable, which is enough of an audience to make advertising concerns another critical factor.
Scott Bomboy is the editor-in-chief of the National Constitution Center.