Media Companies Ask Supreme Court to Rule on Legality of Aereo

The biggest U.S. media companies asked the U.S. Supreme Court to rule Aereo Inc., which provides broadcast signals to online viewers, is an illegal operation.

Walt Disney Co. (DIS), 21st Century Fox Inc., Comcast Corp. (CMCSA)’s NBCUniversal, CBS Corp. (CBS), Univision Communications Inc., the Public Broadcasting Service and station WNET, and Tribune Co.- owned New York station WPIX filed the petition today with the court after litigation in lower courts failed to stop Aereo.

Aereo, backed by Barry Diller, threatens $3 billion in fees that broadcast station owners will receive this year from pay-TV systems to provide signals to subscribers. Aereo uses thousands of small antennas to capture free over-the-air signals and transmits those to paying subscribers over the Internet. If allowed, pay-TV systems could offer their own work-around to avoid paying so-called retransmission fees.

“Today’s filing underscores our resolve to see justice done,” Fox spokesman Dan Berger said in an e-mailed statement. “Make no mistake, Aereo is stealing our broadcast signal.”

Virginia Lam, a spokeswoman for New York-based Aereo, said today in an e-mail that the company will respond to the Supreme Court petition “in due course.”

Chase Carey, president and chief operating officer of New York-based Fox, said earlier this year that the company would convert its Fox TV network into a cable channel and cease broadcasting if U.S. courts permit Aereo to continue taking its signals without compensation. Leslie Moonves, CBS’s chief executive officer, and Haim Saban, chairman of Univision, have said they would follow Fox off the air if necessary.

Retransmission Fees

Broadcast stations will collect $3.02 billion in retransmission fees from pay-TV systems this year, doubling to $6.05 billion by 2018, according to estimates by Bloomberg Industries.

Federal judges in Boston and New York so far have permitted Aereo to operate during legal challenges. Nathaniel Gorton, a U.S. district judge in Boston, wrote earlier this week that the plaintiffs hadn’t “demonstrated a sufficient likelihood of success on the merits nor the requisite irreparable harm” to justify an injunction.

The cases in New York are American Broadcasting Cos. v. Aereo Inc., 12-cv-01540, WNET v. Aereo Inc., 12-cv-01543, and Aereo Inc. v. CBS Broadcasting Inc., 13-cv-03013, U.S. District Court, Southern District of New York (Manhattan). The case in Boston is Hearst Stations Inc. v. Aereo Inc., 13-cv-11649, U.S. District Court, District of Massachusetts (Boston).

To contact the reporter on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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