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ABC Tells Judge Aereo Violates Copyrights, Should Be Shut

Broadcasters told a federal judge that the online television service Aereo Inc., which is backed by Barry Diller, violates copyrights by allowing subscribers to view programs on computers and smartphones and should be shut.

Aereo said consumers have the right to watch TV shows using an antenna without infringing copyrights. Both sides are presenting opening statements today in Manhattan before U.S. District Judge Alison Nathan, who must decide whether to issue an injunction to ban Aereo.

Networks including Walt Disney Co. (DIS)’s ABC sued Long Island City, New York-based Aereo in March, saying that it hadn’t paid for the right to offer their programming through an Internet service set to begin that month. New York City subscribers can access TV stations’ broadcasts with a remote antenna and a digital video recorder for $12 a month.

“Although other distributors, including cable and satellite operators and telephone companies, pay to retransmit the same programming, Aereo’s business is based on circumventing the carefully balanced distribution system mandated by Congress,” the networks said in their complaint.

In a statement, Aereo spokesman Mike Schroeder said, “Consumers are legally entitled to access broadcast television via an antenna and they are entitled to record television content for their personal use.”

Diller’s digital media company IAC/InterActive Corp. led a $20.5 million round of financing for Aereo, it was announced in February. Diller, who is on Aereo’s board, once ran News Corp. (NWSA)’s Fox Broadcasting Co.

Chet Kanojia is the founder and chief executive officer of Aereo. He is also chairman of Navic Systems Inc., a provider of computer-programming services based in Waltham, Massachusetts.

The cases are American Broadcasting Cos. v. Aereo, 12-1540, and WNET v. Aereo, 12-1543, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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