Inside the tech aiming Aereo through TV's legal hoops

Aereo's founder admits it: They looked like low-rent terrorists.

Chet Kanojia, founder and chief executive of the TV-streaming company, had a vision to bring broadcast TV to the Internet. But first, he and Chief Technology Officer Joe Lipowski needed to find a signal, a place in New York where tiny antennas could pick up all the channels his future customers would expect.

"We had this rigged-up mast, for sampling. ... Joe literally drove to a Home Depot and bought those PVC pipes that ordinarily the cheap terrorists would use for making explosives," Kanojia said. The two executives would meet with landlords to check out building roofs, an eccentric request that already had them on edge. "And so we would roll in with duct-taped things."

It wouldn't be the last time Aereo raised hackles. The company, which is backed by IAC Chairman Barry Diller, launched in 2012 with promises of shaking up how we watch broadcast television. To do that and stay on the right side of copyright law, the startup devised a novel system of thousands of miniature antennas, high-intensity transcoders and lots of no-nonsense air conditioners -- all contraptions to toss Aereo through the technological hoops necessary to navigate a legal loophole.

Read: Why the Aereo case over TV's future is too tough to call

The result: thousands of customers in 11 cities watching broadcast TV -- the most popular channels on television -- at a fraction of the subscription price of a cable or satellite package (monthly Aereo fees are as low as $8). But those customers are in jeopardy of losing their service.

Big broadcast TV companies, including CNET parent CBS, are suing Aereo for copyright infringement, and Aereo's legal standing will go before the Supreme Court on Tuesday. Aereo's technological setup is key to the company's defense.

What it does

When an Aereo subscriber sits down at the computer to watch a local broadcast, that customer triggers a chain reaction that Aereo carefully designed. After clicking on something to watch, the subscriber fires up an antenna that tunes to that channel. The programming travels through the antenna circuitry to a bank of transcoders, which morph the data from one coding standard to another. From there they hit a remote DVR, a storage drive that delivers the programming to the member's computer via the Internet and saves it for viewing later.

That sounds pretty simple, and it might be simple, if Aereo didn't need to jump through hoops to ensure that its service, technologically speaking, doesn't infringe the copyrights of the TV networks. Whether the service infringes on copyrights is a question the Supreme Court will answer in the coming weeks. But Aereo used two guiding principles that statutes on the books and case law suggest would keep its service exempt from the copyright restrictions that force cable and satellite companies to pay networks millions in order to retransmit their programming to customers.

Aereo's system needed to put the member in complete control of the antenna, and it needed every stream of programming to be a dedicated recording for the individual subscriber.

Those two needs made things a lot more complicated.

The antennas

Looking at the history of television copyright, Kanojia wanted a system that had a single antenna for every subscriber, because the Copyright Act of 1976 made it a violation to use one antenna for multiple viewers.

So he envisioned a big flat pane, as big as a household door or larger, that would have a grid of antennas, as many as 1,000 by 1,000. He described this concept to Lipowski, an expert on a special subset of antennas known as electrically small antennas, at an Indian restaurant in Norwood, Mass., over iced green tea.

"The problem," Lipowski said, "is how do you connect all the wires." Traditionally antennas are connected by coaxial cable feedlines, and even at just a quarter of an inch thick, the wires necessary under Kanojia's concept just wouldn't have enough room.

"I hadn't thought that through," Kanojia said. "So then Joe took over."

Kanojia had originally hoped his meeting with Lipowski would yield him some references for other engineers of electrically small antennas. Lipowski ended up being so intrigued by Kanojia's Aereo notion, he decided to embark on the project himself.

Lipowski helped lead the development of Aereo's miniature antenna arrays. Aereo needed an individual antenna for every customer, and for scale that meant the antennas needed to be physically small. But television broadcasts are carried on radio waves that have relatively large wavelengths, ranging from about a foot to a yard. The traditional "bunny ears" TV antenna telescoped out to be big because they needed to receive the full length of the waves.

Aereo's antennas, at the size of a postage stamp, don't need to be that large because they're not designed to pick up the full spectrum of broadcast TV. Every TV channel beamed over the air has a specified 6MHz band. When a subscriber sits down and clicks to watch NBC, a sleeping Aereo antenna wakes up and a converter switches the voltage of the antenna to receive the 6MHz band that carries NBC.

The transcoding

Transcoders do exactly what their name suggests: They morph the code of data into another coding standard. In the case of every Aereo video stream, they convert the video from MPEG2 to MPEG4. Many services transcode. Amazon Web Services -- the online retailer's cloud computing side business -- is a major example. The difficult part for Aereo is the sheer volume of transcoding it faces.

"It's funny ... Amazon AWS and all these people saying, 'Oh we can transcode, whatever,'" Kanojia said. "They're lucky if they're doing 10,000 or 20,000 transcodes at any given time. In a city like New York, we'll be doing hundreds of thousands at wire speed in real time."

Most companies that transcode take one input and copy it. But Aereo needed one input for every person using the service. Even if 1,000 Aereo customers are watching the exact same Oscars ceremony at the same time, that broadcast must to be transcoded 1,000 times individually. It developed proprietary high-density transcoders to handle the load.

From the transcoding, the recording heads to a remote DVR, one step of Aereo's technology path that is pretty garden variety. The remote DVR is a cloud-based storage system for a member's individual recordings. In the simplest terms, it's a bunch of big drives at Aereo's facility in each city. Rather than a storage drive in your own home, the remote DVR is hooked up to the Internet to deliver the video to the subscriber through the network, finishing the cycle that started when the tiny antenna fired up to the right channel.

Having worked out the tricks to keep the Aereo broadcast streams copyright legal -- a claim that the broadcasters and a US District Court in Utah still don't buy -- Aereo faced a more prosaic problem. All those antennas, all that transcoding and all that storage was hot stuff, literally.

"How you cool the damn thing?" Kanojia said.

Lots of ACs

The heating problem was one dilemma, finally, with a simple solution: lots of high-octane air conditioners. The design of Aereo's antenna arrays -- sticking up out of boards that plug into chassis towers -- not only stuck the antennas out where they could receive radio frequencies but also created an airflow tunnel from top to bottom.

Aereo's first antenna facility in New York was indoors, a floor of an office building in Brooklyn. Cooling it down just meant having an HVAC (heating, ventilation and air conditioning) system installed and running. But as Aereo expanded to other cities, it needed a more modular setup that wouldn't force it to find open floor space in tall towers. That created the need for a new setup, which turned out to create more heat.

The company developed boxes made of radio-signal-invisible material, the same material used for stealth aircraft. These "cubes," as Aereo calls them, contain racks and racks of antenna chassis, transcoders, and network gear, with a working room big enough to allow a service technician access and an electric substation to power it. Each cube serves about 7,000 to 10,000 Aereo customers, who use about 3 watts of electricity each, Kanojia estimated.

That wattage already means heat is pumping in, he said. "If you're in a city like Dallas at 100 degrees, or Atlanta on a roof, you've got to cool the damn thing," he said.

The signals

Even an elegantly designed antenna, cooled to perfection, won't work if it's not in the right place -- a place with all the TV signals. The signal hunt for Aereo's initial launch in New York City in 2012 was what sent Kanojia and Lipowski on their chase around the the rooftops of New York with duct-taped PVC receivers looking for a location that would pick up all the channels Aereo needed.

In the transition to fully digital broadcast signals in 2009, the Federal Communications Commission drew up maps that indicated where, if consumers followed the necessary steps, a proper antenna above a dwelling should be able to pick up TV broadcasts.

As Kanojia and Lipowski made their own map of New York's broadcast signals, they found big holes.

"It's striking to me," Lipowski said, describing missing signals at many places around the city, no more than a few miles from the current broadcast center on the Empire State Building. "You would not get the channels that the FCC said you should be able to receive. ... It was just gone, you could no longer receive television signals, you had to do something different. That's not fair."

Lipowski and Kanojia found their signal sweet spot at the Brooklyn building, a location with direct line of sight with the Empire State Building and One World Trade Center, which will become NYC's broadcasting tower next year.

Even now, as the company attempts to expand across the country while battling for survival in court, Aereo workers canvass each new city with a rigged-up mast searching for signals, one not much different than the bomb look-alike Lipowski and Kanojia first built with pipe and duct tape.

"We've gone a little bit more sophisticated. We now have collapsible PVC pipes, actually," Lipowski said. "It's not a lot classier, but it's a little classier."

Correction at 8:57 a.m. PT: The site of the first meeting of Aereo's founder and CTO has been corrected. They met in Norwood, Mass.