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Aereo CEO defends antenna, slams broadcasters

Controversial Internet television service Aereo is much like other popular high-tech entertainment products that courts have found to be legal, the company’s chief executive, Chet Kanojia, maintains.

The service, available in 11 cities so far, lets customers watch over-the-air broadcast channels via the Internet for $8 to $12 a month. Broadcasters have sued, saying Aereo is distributing their programming without paying the licensing fees required by copyright law.

But Kanojia, in an interview with Yahoo Global Anchor Katie Couric, explains that Aereo dedicates a tiny television antenna to each customer and then streams the signal over the Internet to the customer’s phone, computer or TV set.

“The idea that somebody using an antenna is somehow stealing the signal just flies contrary to the original relationship between the consumer, the government, for giving them the spectrum, and the broadcaster,” he says. “Now if somebody's come out with a smarter antenna, a clever, different antenna, and you don't like that evolution is happening, that suddenly  more people might use antennas, I'm sorry about that. And that's the just nature of the technology in the industry.”

Broadcasters including Disney (DIS), News Corp’s (NWSA) 20th Century Fox and CBS (CBS) say Aereo’s tiny antennas are just a gimmick to get around paying licensing fees. Cable companies pay billions of dollars for the right to offer local over-the-air channels to their subscribers, the broadcasters note.

But since the Supreme Court’s historic 1984 “Betamax” decision permitting video cassette recordings, courts have allowed a host of new technologies to impinge on copyrighted entertainment. In 2008, an appeals court allowed Cablevision to offer a DVR service to customers with all the programming recorded on a centralized server.

“Nobody disputes that a consumer can have an antenna. Nobody disputes a consumer can make a copy of free-to-air signal that they have a right to,” Kanojia says. “Nobody disputes the combination of those two things as legitimate. In fact, you can buy a device today, TiVo or various other boxes, that allow you to plug an antenna in.”

The two sides will face off in the Supreme Court next week. The U.S. Court of Appeals for the Second Circuit ruled in Aereo’s favor last April but, after the Supreme Court decided to hear the case, the 10th Circuit Court of Appeals blocked the service in its six-state region.

Kanojia says he can’t predict how the high court will rule but IAC (IACI) chairman Barry Diller (an investor in Aero) says the court should absolutely reject the broadcasters’ challenge in an WSJ op-ed today. President Obama’s solicitor general sided with broadcasters while many technology companies have sided with Aereo, warning that an adverse ruling could undermine many Internet-based services.

“I don't know what's going to happen or won't happen — this is the U.S. Supreme Court,” Kanojia says. “But I do like my facts. I do have a great degree of confidence in that basic argument.”

The full interview can be found here.