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US government rebuffs Aereo's first shot at rebooting

The US Copyright Office says the online-TV startup doesn't qualify -- yet -- for a content license that would let it restart streaming.


Online-television startup Aereo's request for a copyright license that might let it resume streaming -- despite TV network opposition and a Supreme Court ruling against it -- isn't going to be simple.

The US Copyright Office told Aereo it wouldn't process the startup's request for a license that pays for broadcast programming without having to get the permission of broadcasters themselves, in a letter dated Wednesday. The office said Aereo, as an online distributor, falls outside the scope of the act that created this license.

But it didn't shut the door on Aereo entirely.

"The Office will not refuse Aereo's filings but will instead accept them on a provisional basis," the letter said, adding that it may take definitive action -- including outright rejection -- based on how court and regulatory developments play out.

Basically, that means if Aereo wants to resume streaming, it'll have to get lawmakers, judges, or regulators -- specifically the Federal Communications Commission -- to start defining it as a cable system. Aereo declined to comment.

Aereo -- a startup backed by IAC Chairman Barry Diller that uses arrays of tiny, individual antennas to pick up free over-the-air television and then stream that programming to paying customers -- aimed to shake up the online television world with its $8- to $12-subscriptions that stream over-the-air television, but it has shut down service after the Supreme Court ruled against it last month, sending the case back to a lower court with little room to do much except issue an injunction against it.

But Aereo's response has been to accept the premise of the Supreme Court's decision -- that it is basically the same as a cable system, and therefore must pay royalty fees -- by asking for the same license that cable systems can. Working in Aereo's favor, this is what is known as a compulsory license. That means Aereo doesn't need any approval from the broadcasters to pay its way and resume retransmissions. (CBS, the parent company of CNET, is among the broadcasters suing Aereo.)

It is a royalty system set up in the Copyright Act of 1976 -- the same act the Supreme Court found Aereo to be violating -- that allows cable systems to retransmit copyrighted programming by paying royalty fees with the Licensing Division of the US Copyright Office.

The license is set up in what is known as Section 111. In the letter dated Tuesday, the Copyright Office said Internet retransmissions fall outside the scope of this section according to an earlier case known as WPIX, and that the Supreme Court's ruling last month did nothing to change that precedent.