Copyright Office To Aereo: Quack All You Want, We Don't Think You're A Cable Service

from the quack-quack dept

Thu, Jul 17th 2014 12:04pm — Mike Masnick

As we've been discussing, following the Supreme Court's decision that said Aereo was a cable service solely because it looked like one, and therefore had to pay retransmission fees, we warned that this would lead to a legal mess. Some people insisted Aereo could just start paying retransmission fees, but we wondered how that would fit with the ruling in the ivi case, that said internet companies didn't qualify for statutory licenses on retransmission fees, because internet companies are not cable companies.

Aereo made a filing with the court that basically said that given the Supreme Court's "look like a duck" test finding it a cable service, it seemed pretty clear that the ivi ruling was overturned, and thus it now wants a statutory license to pay retransmission fees. In addition to telling the court this, Aereo also filed with the Copyright Office its application to be eligible for those fees, leading the Copyright Office to send back a somewhat passive aggressive letter saying that it will "accept" the letter "on a provisional basis" but refuses to "process" it because, in its opinion, the ivi ruling means Aereo cannot be a cable company and nothing about the Supreme Court calling Aereo a cable company changes its opinion of that fact.

In the view of the Copyright Office, internet retransmissions of broadcast television fall outside the scope of the Section 111 license. Significantly, in WPIX, Inc. v. ivi Inc.... the Second Circuit deferred to and agreed with the Office's interpretation of Section 111. As explained in that case, Section 111 is meant to encompass "localized retransmission services" that are "regulated as cable systems by the FCC." ... We do not see anything in the Supreme Court's recent decision in American Broadcasting Cos. v. Aereo Inc.... that would alter this conclusion.

So... despite the fact that the Supreme Court ruled, pretty directly, that Aereo matches all the important criteria of a cable company to be covered by the laws that regulate cable company retransmissions, the Copyright Office is going to standby the ivi ruling that internet companies can't be cable companies. As reader Gwiz pointed out last week, it's Schrödinger's CATV. When the Supreme Court looks at it for the purposes of making it infringement, it's a CATV. When the Copyright Office looks at for the sake of actually paying those retrans fees, it's no longer a CATV.

What's perhaps even more troubling here is that there is no reason for the Copyright Office to weigh in here. As is noted in the letter, this issue is currently going to be determined in the courts, and the Copyright Office doesn't need to do anything. But, instead, for no clear reason, it decided to offer its opinion and explain why it won't "process" the letter. Either way, we're left in a situation in which the Supreme Court's ridiculous "quacks like a duck" test is creating confusion.

Aereo Letter (PDF)Aereo Letter (Text)

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Filed Under: cable service, cable tv, copyright office, retransmission, section 111
Companies: aereo, ivi

67 Comments

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silverscarcat (profile), 17 Jul 2014 @ 12:05pm

Aereo should just say...
"Well fine, we're a cable company that doesn't pay re-transmission fees because no one wants our money."
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Ninja (profile), 17 Jul 2014 @ 12:09pm

So they look like a duck, quack like a duck but the copyright office believes they are not a duck. Any hints?

I'll bet they are actually a platypus.
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Ninja (profile), 17 Jul 2014 @ 12:11pm

Re: Aereo should just say...
This is not about money, it's about control. It's not as insane as it seems once you put it into perspective. It's like the buggy whip makers outlawing the automobile because it sort of looks like... a duck?
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TheResidentSkeptic (profile), 17 Jul 2014 @ 12:17pm

but what does this prove?
We all know that the level of stupid has surpassed the "hurts" layer - but does this show that our government is totally corrupt, or totally incompetent? Which index is higher? The GCI (gov't corruption index) or GII (Gov't Incompetence Index)..

... hmmm.. if I can get these on DowJones we can make a fortune betting on the one that goes highest...
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Anonymous Coward, 17 Jul 2014 @ 12:29pm

HUZZAH PROGRESS!
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1st Dread Pirate Roberts (profile), 17 Jul 2014 @ 12:31pm

Miranda
We, the Supreme Court of the United States, find that Miranda was not read his rights following his arrest. However, this Miranda ruling does not apply to any similar situation other than that which is currently under review by this court.
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ChurchHatesTucker (profile), 17 Jul 2014 @ 12:31pm

Re: but what does this prove?
They're not incompatible.
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Anonymous Coward, 17 Jul 2014 @ 12:36pm

I would continue with business as usual then seeing as how they aren't required to pay for those retransmission fees, thanks Copyright Office of Retards.
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Anonymous Coward, 17 Jul 2014 @ 12:36pm

Maybe the courts should have spoken with those who know whats what prior to making a ruling , Maybe Aereo has a loophole to expose thanks to the copyright office.

Rename Aereo call it Aereoh copyright it as an antenna or pez dispenser re-market it as such . poof back in business
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Vanye (profile), 17 Jul 2014 @ 12:39pm

It is possible, just barely, that the C.O. is actually attempting to provide Aereo some assistance here. Possibly, if this gets before the SC again, they can point to this "ruling" as evidence that no, they're not a cable company?

Grasping at straws here...
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1st Dread Pirate Roberts (profile), 17 Jul 2014 @ 12:39pm

Re:
I say that should go back into business, but *sell* the antenna and storage space to the viewer, say $99 for 8 hours, and $119 for 20 hours.

Then, take a page from SpiderOak (spideroak.com) and encrypt everything. Aereo won't know what is being recorded, or what people are watching.
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Anonymous Coward, 17 Jul 2014 @ 12:39pm

Does Aereo "need" a license? Can it not, in good faith, simply pay the retrans fee as though it were any other cable company and wait to be sued again? What's the point of taking the Copyright Office's interpretation if you're fighting for your life?
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Anonymous Coward, 17 Jul 2014 @ 12:46pm

Re:
Should have read the letter first I guess
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Anonymous Coward, 17 Jul 2014 @ 12:48pm

Re: Re: Aereo should just say...
It's the buggy whip makers outlawing the automobile because an automobile looks kind of like a buggy and everyone knows you can't have buggys going around without horses or similar animals to pull them and whips to control the animals.
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DogBreath, 17 Jul 2014 @ 12:51pm

Re:
It is possible, just barely, that the C.O. is actually attempting to provide Aereo some assistance here. Possibly, if this gets before the SC again, they can point to this "ruling" as evidence that no, they're not a cable company?

In this case, isn't that kind of like Aereo arguing that it's not dead yet?

I think this is just the Supreme Court and the Copyright Office's way of putting Aereo on the cart.
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Vel the Enigmatic, 17 Jul 2014 @ 12:58pm

Bah.
Who wants to bet this whole thing was a maneuver to put Aereo out of business entirely and for good with no chance of recovery? The big companies not only wanted to block Aereo from the market.

They wanted to make sure they couldn't get the statutory license that they need to stay in the market either. It seems pretty clear to me that's what it is. They didn't only want to block Aereo, they want to make an example of Aereo by completely erasing them by force using shady deals.
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Anonymous Coward, 17 Jul 2014 @ 12:59pm

Is a smart phone a mobile device if it never leaves your home ?
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Anonymous Coward, 17 Jul 2014 @ 1:00pm

Remember, this is Obama's copyright office. They have favors to return, and nothing will get in the way of returning them.
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Anonymous Coward, 17 Jul 2014 @ 1:00pm

Yup, I can totally see Aereo going back to court with a single filing that simply says "What the fuck?"

Supreme Court says we're this - copyright office says we're not.

Someone is obviously full of shit. Or perhaps they all are.
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1st Dread Pirate Roberts (profile), 17 Jul 2014 @ 1:03pm

Re:
Tsk, tsk. There might be minors reading this page.
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Avatar28 (profile), 17 Jul 2014 @ 1:13pm

Re:
Clearly if they also weigh the same as a duck then they must be witches. Someone should fetch the scales.
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Anonymous Coward, 17 Jul 2014 @ 1:14pm

Hmm, I wonder how all of this smacking down of Aereo encourages the development of culture, science and innovation.
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MonkeyFracasJr (profile), 17 Jul 2014 @ 1:22pm

Re: Re:
yes, it is spelled S-H-I-A-T
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JWW (profile), 17 Jul 2014 @ 1:23pm

Re:
I marked your post insightful. In actuality its terribly, terribly, sad.

The Citizens of this country have been sold out. Things now get done to us, government has lost interest in doing things for us. Ironically, they also have no interest in leaving us alone either.
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jupiterkansas (profile), 17 Jul 2014 @ 1:38pm

Re: Re:
The goal of the government now is to keep money flowing around until it ends up in the pockets of the wealthiest people. It's trickle up economics.
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Quiet Lurcker, 17 Jul 2014 @ 1:38pm

Re: Aereo should just say...
You may have something here. Let's put it to the audience, here. LAWYERS, HELP ME OUT HERE. Ahem - sorry for the outdoor voice...

Isn't there a thing in collections or debt law that says, if a creditor refuses payment of a debt, then either the debt goes away completely, or the collector is barred from further attempts to collect or some such.

Could the same principle be applied here? Could Aereo say that since they made a good-faith effort to comply with the law as it was interpreted to them, then they are no longer bound by that law? Sort of on the lines of 'hey, we tried to pay our bill, but they wouldn't accept our money, so now they can't collect'?
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Anonymous Coward, 17 Jul 2014 @ 1:48pm

Aereo should sue the Copyright Office to get back in front if the Supreme Court.
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Anonymous Coward, 17 Jul 2014 @ 1:54pm

Another clear illustration...
That the immorality of Statism results in ever more dangerous absurdities, as the point of Statism is for individuals to remove their adherence to universal morals (i.e., theft is immoral, the State renames it "taxation"; murder is immoral, the State renames it "war"; counterfeiting is immoral, the State renames it quantitative easing...etc etc etc).

The true solution here is to apply said morals to humans universally, no matter what fancy hat/badge/or title they may have.

The initiation of force is immoral (only self-defense is valid). Respect inherent self-ownership derived property rights.
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DSchneider (profile), 17 Jul 2014 @ 1:57pm

Re:
You mean like Bush's copyright office, or Clinton's or Bush Sr's before him? Quite trying to make this into a Democrat vs. Republican thing. They both like to make Swiss cheese out of the Constitution. The only difference is where they make the holes.
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Anonymous Coward, 17 Jul 2014 @ 2:12pm

Re: Re: Aereo should just say...
I guess they can try, but they should first make sure to out-bribe their "competition"...
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Anonymous Coward, 17 Jul 2014 @ 2:50pm

So the Copyright Office doesn't recognize the Supreme Courts Classification of Aereo as a cable services provider under their current definition , This looks like Infighting between the powers that be ,with Aereo being the unfortunate man in the middle. Aereo needs to act on this angle and head back to court quick before the changes are made.
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martyburns (profile), 17 Jul 2014 @ 3:24pm

Re: Re:
Go tell their parents then.
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Greevar (profile), 17 Jul 2014 @ 3:28pm

Re:
I've been thinking exactly the same thing throughout this whole episode. Broadcasters were given the frequencies for the express reason to provide open access to programming. This just stinks from a mix of anti-competition and rent-seeking. It's inevitable that when someone tries to serve the public something the incumbents aren't but are expected to, the incumbents try to destroy it or force the service to give them a cut, as if Aereo's existence has a negative impact on broadcasters' revenues!

Why should anyone give them a cut? Why should anyone be pushed out of the market when the competition is serving people the incumbents are too apathetic to serve? They complain that companies like Aereo are [moral panic]enriching themselves through the use of the hard work of others.[/moral panic] So fucking what? Everybody that has made any effort to create content has enriched themselves through the use of others' hard work. You can't build a house without lumber and you can't make lumber without trees. But, those trees grew all on their own. They did the work for us and we use them for raw materials. Maybe we should be required to pay the trees a cut of the lumber and construction industry's revenue? We could cut some of them down to make the money we need to pay them!
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PRMan, 17 Jul 2014 @ 3:29pm

Re: Re: Re: Aereo should just say...
And don't forget the guy with the lantern that has to walk in front of it...
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Avantare, 17 Jul 2014 @ 3:36pm

And Comcast ?
From the article.

The Copyright Office is going to standby the ivi ruling that Internet companies can't be cable companies.

So which one is Comcast???
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any moose cow word, 17 Jul 2014 @ 3:59pm

Re:
Yes, this is infighting between the powers that be, but it's between the broadcasters who want free money from retransmit fees--they're already paid by the ads Aereo rebroadcast--and the media companies who effectively control the copyright office and don't want anyone outside of the current establishment to even get a foothold. Anyone with half a clue knows it's all going to go online eventually, both the broadcasters and the media companies are just trying to drown anyone who can potentially supplant their control in order to maintain the status quo for as long as possible.
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saulgoode (profile), 17 Jul 2014 @ 4:02pm

The copyright office is soliciting comments from the public on the significance of the Aereo ruling.

http://thehill.com/policy/technology/212178-copyright-office-ponders-aereo-fallout
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Anonymous Coward, 17 Jul 2014 @ 4:04pm

Let them pul their programming
I've thought about that before. It's broadcast over public spectrum. They have that spectrum allocated to them for the public good. It doesn't belong to them; they only lease it.

By broadcasting OTA, they are allowing anyone with a VCR/DVR et. al. to record the broadcast. Betamax anchored that right in concrete.

Congress needs to stop messing with copyright, and just go back to a 14-year term with a 14-year extension. Why should copyright last longer than the lifespan of the majority of the population?
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any moose cow word, 17 Jul 2014 @ 4:16pm

If the real world worked like copyright...
Yes, but the trees are just freeloading on the sun, and the sun couldn't produce nuclear fusion without Hans Bethe, so all of the construction industry should be paying royalties to the Bethe estate.
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Dennis F. Heffernan (profile), 17 Jul 2014 @ 4:24pm

It's....
...Confuse-A-CATV!
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Anonymous Coward, 17 Jul 2014 @ 5:22pm

someone with some sense needs to weigh in here! either it IS a cable service, or it ISN'T! either it can do what it has been trying to do or it has to do it another way, but it cant surely be stopped in both directions, can it?
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Anonymous Coward, 17 Jul 2014 @ 5:31pm

Re: Miranda
We're setting a precedent with this case, but the ruling is very narrow and thus this precedent doesn't apply to anything else. Don't come back later and use this ruling.
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That One Guy (profile), 17 Jul 2014 @ 5:49pm

Re:
Welcome to politics, where something can be both A and B, and neither A or B, depending on who's speaking at the moment and what group has paid the most.
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Anonymous Coward, 17 Jul 2014 @ 5:56pm

Re:
They're a semi-aquatic, egg-laying mammal of action.
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This comment has been flagged by the community. Click here to show it

Whatever (profile), 17 Jul 2014 @ 6:44pm

not so silly
The copyright office's stand is not silly at all. No matter what SCOTUS said, the status of Aereo is still undecided because they have not overcome all of the legal hurdles. the ICI case is a big one to get past.

Aereo appears to be trying to put the cart in front of the horse here. They need to get themselves in a position of being a true cable company, jump through the regulatory hoops, and then they can get to that point where the copyright office needs to handle them as a cable company. Just showing up and saying "yeah, we're a cable company because SCOTUS says we walk like a duck" doesn't cover it.
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Anonymous Coward, 17 Jul 2014 @ 6:51pm

Re: not so silly
They need to get themselves in a position of being a true cable company, jump through the regulatory hoops, and then they can get to that point

Ahh, the true spirit of innovation and progress.
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Anonymous Coward, 17 Jul 2014 @ 7:06pm

Re: Re: not so silly
Classic Whatever. Blame the poor sod trying to follow the law, instead of calling the law out on its inconsistency and organizations going out of their way to make the process as ridiculous and cumbersome for the sod as possible.
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Anonymous Coward, 17 Jul 2014 @ 10:02pm

Re: Re: Re: not so silly
and on top of that if you read between the lines.

They need to get themselves in a position of being a true cable company, jump through the regulatory hoops, and then they can get to that point where the copyright office needs to handle them as a cable company.

Aereo have not greased the right palms yet. They are just not corrupt enough, or paid those that are.

So the highest authority of law in the land says they are a cable company, and idiots like you still can't admit you are wrong.
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Whatever (profile), 17 Jul 2014 @ 10:35pm

Re: Re: Re: Re: not so silly
It's a lot of fun watching you guys get all huffy about things, without realize what you are talking about.

http://www.fcc.gov/encyclopedia/cable-system-registration

SCOTUS may say they are operating as a cable company, but until licensed, they are NOT a cable company in fact, just operating as one.

There is a very distinct difference between how you are operating and the concept of your operation being legal, licensed, and above board. Aereo doesn't have anything besides SCOTUS saying they operation meets the technical requirements of a cable operation, so they must operate as one to be legal. That didn't grant them a license to operate.

The difference is huge, and apparently just outside of the grasp of many people here.
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Anonymous Coward, 17 Jul 2014 @ 10:41pm

Re: not so silly
So, adding, "on the internet" automagically makes a business model invalid?

That sounds perfectly reasonable!

/s
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PaulT (profile), 17 Jul 2014 @ 11:52pm

Re: Re: Re: Re: Re: not so silly
"SCOTUS may say they are operating as a cable company, but until licensed, they are NOT a cable company in fact, just operating as one."

...and while being a smug twat, as always, you miss the actual problems this raises and the points raised as a result - the points being discussed by people who aren't insufferable morons. See if you can work out what those are.
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Whatever (profile), 18 Jul 2014 @ 12:17am

Re: Re: Re: Re: Re: Re: not so silly
the points being discussed by people who aren't insufferable morons

Where would you fit in, then?

The "actual problems" stem from simply trying to run before they walk. The status of cable company for purposes of copyright (the issue Aereo faced) is regulated by agreeing to pay the appropriate fees as a cable operator. However, that classification is held only for licensed cable operators, which they are not.

So all the other "problems" aren't really problems, they are just a result of failing to touch the correct (and obvious) regulatory bases. The copyright people are very much correct to tell them that they aren't really qualified.

Oh, and keep your ad homs for your self. They aren't needed!
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Anonymous Coward, 18 Jul 2014 @ 2:40am

Re: Re: Re: Re: Re: Re: Re: not so silly
Why, because you want space for yours?

No chance.
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Anonymous Coward, 18 Jul 2014 @ 5:45am

Re: If the real world worked like copyright...
Solar fusion isn't even possible without Hydrogen which was invented by Henry Cavendish. I think the Bethe estate owes much to the Cavendish estate.
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Anonymous Coward, 18 Jul 2014 @ 5:51am

Re:
Clearly they evolved beyond the duck.
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Anonymous Coward, 18 Jul 2014 @ 8:48am

All I want is competition in the marketplace and live streaming via internet. Unfortunately, it appears the legacy cable monopolies will fight tooth and nail to make sure that never happens.
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J. S. Greenfield, 18 Jul 2014 @ 9:36am

Fact-check anyone?
Mr. Masnick, how much more could you get wrong in one posting? (Does anybody even attempt to do actual research, or to fact-check, anymore, before publishing?)

For the record, I believe that Aereo clearly qualifies as a cable system under the statutory definition at 17 USC 111(f)3. But pretty much everything you say in your article is wrong.

For starters, the Supreme Court made no ruling whatsoever respecting retransmission fees in ABC v. Aereo. Retransmission fees are not copyright royalties/license fees, and they were not at issue in the case. And what Aereo has attempted to pay are not retransmission fees, but copyright royalties/administrative fees pursuant to the statutory license of 17 USC 111(d). (Retransmission fees, on the other hand, are paid directly to broadcasters, after negotiation of retransmission consent.)

Furthermore, the Supreme Court most assuredly did not declare that Aereo "matches all the important criteria of a cable company" such that Aereo qualifies as a cable system for the purposes of section 111. (Some of the justices clearly indicated such during oral argument, and they should have commented on the matter in dicta...but they didn't.)

Finally, the Copyright Office isn't adhering to the Ivi decision. The Ivi decision adhered to the Copyright Office, which has always and consistently (long before Aereo, and Ivi, too, for that matter) imposed additional, extra-statutory criteria on its recognition of "cable systems" under section 111. And it is not the least bit surprising for the Copyright Office to continue to take the view it always has, and handle the matter as it did. That this seems to surprise you, and that you see no clear reason for such, is a product solely of your lack of understanding of the matters on which you are commenting.

The SDNY court hearing the Aereo case on remand ought to conclude that Aereo qualifies as a cable system under 111(f)3, at which time, the Copyright Office ought to accept that ruling (though given what happened at the Supreme Court, there is certainly no assurance they will). Regardless, it is no surprise at all that the Copyright Office decline to recognize Aereo as a cable system on their own, ahead of such a ruling.

Those who are interested in accurate information respecting this matter should see:

Overcoming Ivi to Qualify as a Cable System
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MPAA, 18 Jul 2014 @ 11:22am

Re: Re: not so silly
Jumping through regulatory hoops? Hmmm, that sounds suspicious to me: it sounds like you're trying to evade the law against unregulated cable operators. Clearly that makes you a lawbreaker.
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nasch (profile), 18 Jul 2014 @ 12:32pm

Re: Re:
I say that should go back into business, but *sell* the antenna and storage space to the viewer, say $99 for 8 hours, and $119 for 20 hours.

That sounds like renting.
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nasch (profile), 18 Jul 2014 @ 1:17pm

Re: not so silly
They need to get themselves in a position of being a true cable company, jump through the regulatory hoops, and then they can get to that point where the copyright office needs to handle them as a cable company.

This ignores the fact that the hoops are being moved around as Aereo jumps.
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nasch (profile), 18 Jul 2014 @ 1:20pm

Re: Fact-check anyone?
In case anyone is wondering, Mr. Greenfield here is not a neutral observer: "From 2000 to 2014, Jonathan served as a Vice President and Senior Vice President at Cablevision Systems."
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Whatever (profile), 18 Jul 2014 @ 5:35pm

Re: Re: not so silly
Are they? Can you show me Aereo's application to the FCC for a cable operator license? Of course you can't, they have never made one.

That's a pretty basic thing, don't you think?
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Greevar (profile), 18 Jul 2014 @ 9:25pm

Re: If the real world worked like copyright...
Okay. I realize this is satire, but they were discovered, not invented.

Stars created the heavier elements that make up Hans Bethe. Therefore, Hans could not invent the process by which his most fundamental components were formed.

The same goes for Cavendish. It's not possible to invent what is an inseparable part of the so-called inventor.

That's like saying Newton invented gravity.
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BernardoVerda (profile), 19 Jul 2014 @ 6:39pm

Re: Re: Re: Re: Re: Re: Re: not so silly
Ah yes; one of the classic defining features of the internet troll in action:

Alleging that their critics are engaging in the 'ad hominum' fallacy -- without actually understanding what actually constitutes 'ad hominum'.
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Anonymous Coward, 19 Jul 2014 @ 7:00pm

It's not renting.
Re: Re:
I say that should go back into business, but *sell* the antenna and storage space to the viewer, say $99 for 8 hours, and $119 for 20 hours.

That sounds like renting.

It would be a one-time payment for setting up the account. Am I renting my Roku when I buy it? Nope. Free, exclusive, lifetime-access to *my* antenna that *I* now own. It just happens to come with online storage.
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nasch (profile), 19 Jul 2014 @ 9:10pm

Re: It's not renting.

It would be a one-time payment for setting up the account.

I think I know what you mean now - $99 for 8 hours of video storage, not for 8 hours of antenna usage.
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Anonymous Coward, 20 Jul 2014 @ 5:39am

Re: Re: Fact-check anyone?
Is anyone surprised?
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