Aereo plans 'pause' after Supreme Court ruled it illegal

The streaming-TV startup isn't giving up, but it will take a break as a suit seeking to shut it down goes back to a lower court.

Joan E. Solsman Former Senior Reporter
Joan E. Solsman was CNET's senior media reporter, covering the intersection of entertainment and technology. She's reported from locations spanning from Disneyland to Serbian refugee camps, and she previously wrote for Dow Jones Newswires and The Wall Street Journal. She bikes to get almost everywhere and has been doored only once.
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Joan E. Solsman
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An Aereo transcoder. Joan E. Solsman/CNET

Aereo, the startup that the Supreme Court this week said was illegally retransmitting broadcast TV over the Internet, said it will "pause" operations as it figures out its next move, adding that the company's "journey is far from done."

"We have decided to pause our operations temporarily as we consult with the court and map out our next steps," Chief Executive Chet Kanojia said in a letter posted to the company's blog Saturday.

On Wednesday, the Supreme Court handed down a victory to the broadcasters suing to shut down Aereo, deciding the company is fundamentally the same as a cable company yet doesn't pay broadcasters the same fees cable companies must, a violation of the Copyright Act. (CBS, the parent company of CNET, is one of the broadcasters suing Aereo.)

The Supreme Court decision, while affecting little more than an estimated 100,000 subscribers to Aereo, had wider implications, raising legal questions for cloud-based services Dropbox and Apple's iCloud and tipping the balance in the way courts may interpret copyright law toward protecting intellectual property rather than fostering innovation.

Kanojia was clear that Aereo isn't ready to concede defeat following the high court's ruling, which was unequivocal that Aereo's current business model violates copyright law despite the company's argument that it is simply an equipment rental service. However, the letter from the startup indicates not only that Aereo has hope for its own future but also that it remains dedicated to the public's ability to access broadcast TV with an antenna, no matter the antenna's size or location.

The case will return to the Second Circuit Court of Appeals, which previously rejected a preliminary injunction to stop Aereo, within about 30 days following the high court's decision. The appeals court must decide whether to order the parties to file supplemental briefs or to proceed based on what both sides have already told the court, but the Supreme Court's ruling gives the Second Circuit little choice but to issue the injunction.

Aereo could decide to try to bring the case to a full trial with a different line of legal argument -- a daunting prospect given the Supreme Court has already sided against it -- or the company could settle with the broadcasters in some fashion.

Saturday, Aereo said subscribers had until 8:30 am PT Saturday to watch live television or any stored shows on their remote DVR, and would be refunded their last paid month. Aereo charges $8-$12 for its service, which dedicates a mini-antenna to each subscriber to capture over-the-air TV signals, store them in a remote DVR, and stream them to connected devices in a member's home.

Kanojia said in his letter that the outpouring of support for Aereo was "staggering."

"The spectrum that the broadcasters use to transmit over-the-air programming belongs to the American public, and we believe you should have a right to access that live programming whether your antenna sits on the roof of your home, on top of your television or in the cloud," he wrote.