Monty Tayloe

Several Utah broadcasters and Fox are seeking a preliminary injunction against Internet streaming service Aereo that would bar it from transmitting copyrighted material in most of the U.S., according to filings in U.S. District Court in Salt Lake City. “Aereo’s conduct is copyright infringement and should be preliminarily enjoined,” said a motion filed by Community Television of Utah, KUTV and Fox. Aereo launched in Utah six weeks ago, and has been retransmitting broadcasts from Salt Lake City stations KSTU, KUTV and KMYU in St. George, said the filings. Aereo’s service undermines the broadcasters’ ability to conduct retransmission consent negotiations, said the filings. The broadcasters have asked the court to grant an injunction that would apply everywhere in the U.S. except for the jurisdiction of the 2nd U.S. Circuit Court of Appeals in New York, where Aereo won its challenge against a previous injunction earlier this year (CD April 2 ). Hearst is also seeking an injunction against Aereo in U.S. District Court in Massachusetts for its Boston service (CD July 17 p6). In addition to Salt Lake City and Boston, Aereo streams broadcast TV in New York, Atlanta, Miami, Houston and Dallas, said a release from Aereo. The injunction sought against Aereo in Utah is similar to one granted against competing service FilmOn X in Washington, D.C., U.S. District Court in September (CD Sept 9 p18). FilmOn -- formerly called Aereokiller -- appealed that injunction to the U.S. Court of Appeals for the D.C. Circuit last month, and is awaiting a decision on another appealed injunction in the 9th U.S. Circuit Court of Appeals in California (CD Aug 29 p5). Aereo is also still in the midst of the case in U.S. District Court in New York that originally spawned the injunction that it successfully challenged in the 2nd Circuit. An Aereo spokeswoman said in an email that Fox had failed in its previous attempts to get an injunction in New York and the broadcaster is “simply not entitled to repeated do-overs on this matter.” Aereo will respond “to this latest attempt at a mulligan in due course,” said the spokeswoman. A New York magistrate judge ruled Monday that Aereo founder Chet Kanojia and Chief Technical Officer Joseph Lipowski will have to submit to an additional hour of deposition from plaintiffs ABC and WNET and will have to answer questions about Aereo’s patents. Aereo had asked Judge Henry Pitman to reconsider the ruling, citing attorney-client privilege and other arguments. However, Pitman denied the request for reconsideration. “It is beyond question that the attorney client privilege protects only communications with counsel, not the underlying facts that are communicated to counsel,” said Pitman.

The government shutdown’s freeze on filing documents with the FCC makes transactions difficult to complete, but it’s unlikely to have much of an effect on them in the long term, said satellite, cable and broadcast brokers and analysts in interviews. “I don’t think [the shutdown] will lead to less deals, it'll just lead to less announced deals,” said BIA/Kelsey analyst Mark Fratrik. “Once the shutdown ends, we'll have a flurry of deal announcements.” The shutdown is likely to delay mergers and acquisitions rather than kill M&A, but that delay could have consequences for buyers and sellers banking on deals occurring in a specific time frame, several brokers said. “There may be some very unhappy people involved in transactions” if the shutdown lasts for a long time, said broadcast broker Robert Heymann, Chicago director of Media Services Group.

The FCC needs better data “hard and fast” to create policy that would increase the number of minority-owned broadcast stations, said acting Chairwoman Mignon Clyburn at the National Association of Black Owned Broadcasters conference. Of several FCC commissioners and bureau personnel who had been scheduled to speak at the event, she was the only one to show up, due to the government shutdown. A panel meant to consist of FCC bureau chiefs instead was staffed by a broadcast attorney and officials from NAB and the Minority Media & Telecommunications Council, and a “Dialogue with Commissioners” event Friday that was planned to include commissioners Ajit Pai and Jessica Rosenworcel will be reformatted, NABOB said. Clyburn and conference panelists briefed attendees on several proposals at the FCC and in Congress that might address the difficulties of minority broadcasters, but she said the FCC’s collection of data is a prerequisite for changes. “A complete picture of the media landscape is necessary to entertain … any major policy adjustment in the short term,” she said.

A contracting antenna industry may combine with the unintended consequences of relocating numerous stations to threaten the FCC’s timeline for repacking broadcast channels after the incentive auction, said several panelists at the commission’s TV Broadcast Relocation Fund Reimbursement workshop on Monday (http://fcc.us/1edUHXd). Although the workshop was ostensibly to gather information on the costs repacking will impose on broadcasters that they would then need to be reimbursed for, out of the $1.75 billion relocation fund, the repacking’s timing was the focus of panelists and other attendees. Panelists said a shortage of crews that do large-scale antenna work, the legal and technical complications of altering existing towers, and the uncertainty preventing the industry from getting ready for those challenges are going to make the repacking very difficult to complete on time. “Until we know the real channel that people are going to occupy, we can do a lot of hocus pocus around what-ifs,” said Sinclair Broadcast Vice President-Advanced Technology Mark Aitken. “Three years isn’t enough -- it’s a five- to six-year transition, we need to be planning for that."

Comcast has 60 days to put Bloomberg’s standard definition business news channel alongside other SD news channels on all its headends in the top 35 DMAs, said the FCC Wednesday in an order affirming an earlier Media Bureau decision on a dispute between the two companies. All three commissioners approved the order (http://bit.ly/1dNbhcU), though Commissioner Ajit Pai also issued a partial dissent.

A focus on the competitiveness of the video market in recent court decisions could indicate FCC program carriage rules are in trouble, and put the Game Show Network at a disadvantage in its upcoming showdown with Cablevision in an FCC administrative law judge hearing over channel placement, said several cable attorneys in interviews. Because judges’ opinions in this month’s Time Warner Cable case (CD Sept 5 p4) and May’s Tennis Channel case (CD May 29 p1) both pointed to a cable provider’s power in the market as a factor in determining whether the FCC can compel it to carry or how to carry a channel, GSN will have to go farther to prove that not being carried on Cablevision’s basic tier harms its ability to compete, said several cable attorneys. “All of these cases are good for the cable operators,” said Cohn and Marks cable attorney Ron Siegel, not connected to any of the cases. “The market is more competitive and cable isn’t as much of a bottleneck -- if you don’t have market power, there’s no need for [program carriage] rules."

Creating new CableCARD and encoding rules that would apply only to cable operators would “hamstring” their ability to compete in the current video marketplace, said NCTA in comments responding to a TiVo petition (http://bit.ly/12VRaS) asking the FCC to reinstate the portions of the rules knocked down by the EchoStar decision (http://bit.ly/10nMM3E). CEA, Public Knowledge and the All-Vid Tech Company Alliance voiced support for the petition, while Verizon, cable providers and broadcasters opposed TiVo’s proposal, along with NCTA. “In such a dynamic and vibrant marketplace, there is no place for decade-old plug-and-play regulations premised on an entirely different competitive landscape” said NCTA.

The FCC should deny several transfers of control associated with Sinclair’s $985 million buy of Allbritton TV stations, said the American Cable Association and some public interest groups in three petitions to deny filed Monday. Sinclair’s plans to address market overlaps by transferring stations to third-party companies with which it has shared service agreements are intended to let Sinclair “simultaneously control multiple broadcast outlets in the same markets in a manner that defies the public interest and is prohibited by the Commission’s rules,” said Free Press and Put People First. ACA objects to the deal because it will allow “collusion” in retransmission consent negotiations. The FCC should examine the company’s right to be a broadcast licensee in administrative law court because of previous violations of ownership rules by Sinclair, said Rainbow/PUSH Coalition. “If there is any question the viewing public can fairly expect the FCC to address, it is whether the nation’s largest television broadcaster is -- or is not -- basically qualified to be a licensee,” said RPC.

Two chairs of House panels that oversee the FCC don’t want the elimination of the UHF discount to “punish business” by affecting existing ownership groups or pending transactions, they said in a letter to acting Chairwoman Mignon Clyburn Thursday (http://1.usa.gov/1aHA9VF). “Specifically, we are concerned that elimination of the UHF discount could inequitably harm those broadcast owners with pending transactions that were initiated under the existing UHF discount rule,” said House Commerce Committee Chairman Fred Upton, R-Mich., and Communications Subcommittee Chairman Greg Walden, R-Ore.

Emergency motions to stay and limit a nearly nationwide preliminary injunction against streaming TV service FilmOn X were denied in the U.S. District Court for the District of Columbia, said Judge Rosemary Collyer in an opinion filed Thursday. “The conduct prohibited by the Preliminary Injunction is uncompensated infringement of those holders’ exclusive right to public performance of their works, and the public interest is not harmed by requiring FilmOn X to cease infringement.” Collyer agreed with broadcasters that Aereo’s wins in the 2nd U.S. Circuit Court of Appeals don’t mean that FilmOn will win its D.C. case. “FilmOn X has simply recycled the same arguments that this Court rejected,” said the broadcasters’ opposition motion, pointing to FilmOn’s contentions that the injunction undercuts other courts and will harm its business. “The mere existence of two non-controlling, widely-criticized cases supporting FilmOnX does not create a strong likelihood that the D.C. Circuit will reverse the injunction.” FilmOn had argued that being enjoined throughout the nation -- except in the jurisdiction of the 2nd Circuit -- will cause it to lose customers to similar service Aereo, which isn’t enjoined anywhere. That’s “unsupportable” said the plaintiff filings: “FilmOnX’s argument boils down to the plea that it should be allowed to continue to infringe because there is another infringing service in operation.” Filings by FilmOn also show that it has a substantial international following that would be unaffected by the injunction, broadcasters said. The court should also reject FilmOn’s argument that the injunction bond the broadcasters are required to pay should be increased from $250,000 to $2.75 million, the filing said. FilmOn X hasn’t presented any evidence “beyond the mere say-so of counsel that $250,000 would not be sufficient to cover its potential losses, and Plaintiffs have more than sufficient resources in the unlikely event that the injunction was erroneously issued and FilmOn X incurs more than $250,000 in losses,” said Collyer. “It doesn’t really harm us,” FilmOn CEO Alki David told us in an email. His service has many agreements with independent channels that won’t be affected by the injunction, and will still be able to stream the major broadcasters in the 2nd Circuit, where the injunction doesn’t apply, he said. “The Networks are a must have to be a real pro service but we can wait to get them … no biggie.” David said he will wait for Aereo to win the copyright case brought against it by Hearst in Boston, where FilmOn already has an “antenna farm.” Fox praised the decision and said it fully expects to “continue to prevail,” in an email. David’s attorney Ryan Baker, of Baker Marquart, confirmed his client will abide by the court’s order to cease streaming copyrighted material, but will appeal the decision.