TIME Companies

Here’s How Aereo Thinks It Can Bring Itself Back From the Dead

Aereo Antenna
Aereo CEO Chet Kanojia holds one of the company's small antenna. Boston Globe—Boston Globe via Getty Images

Aereo is arguing that it's a cable company in a hail-mary play for legal and business salvation

Is television streaming service Aereo actually “over,” as its top investor, Barry Diller, put it after a seemingly devastating blow at the Supreme Court last month? Maybe not. The company has embraced a new legal argument it hopes can help it stave extinction.

In a letter to a lower court judge Aereo is, for the first time, arguing that it’s a cable company. Neither Aereo nor the broadcasters made that claim before the Supreme Court. Aereo is only bringing it up now because the company’s lawyers have spotted a window, however small, opened by the decision that most regarded as a death knell for the company.

While the Supreme Court never directly said that Aereo is a cable company, it came close to doing so, finding that Aereo “is for all practical purposes a traditional cable system.” Aereo is essentially saying “that’s good enough for us.” But the New York City-based company is making that argument very selectively, taking advantage of two laws’ differing definitions of what exactly a cable company is.

While telecommunications fall under the purview of the Telecommunications Act of 1996, copyright issues are governed by the Copyright Act of 1976. Importantly, both laws have definitions for what constitutes a cable company — but they’re different definitions, and the Copyright Act’s is more broad. Another vital point: the Copyright Act grants cable companies, as it defines them, with so-called “compulsory licenses” to retransmit broadcast television content.

In Aereo’s letter to the lower court judge, it’s only arguing that it’s a cable company in terms of the Copyright Act, and thus “entitled to a compulsory license.” Getting such a license would also neatly address the broadcasters’ initial suit that resulted in the Supreme Court decision. If Aereo receives a compulsory license under the Copyright Act, it would no longer be infringing upon the broadcasters’ copyrights, as the Supreme Court found that it was. “[Aereo is] just trying to get around at least the copyright infringement claim being brought in this lawsuit by saying, ‘Okay, we’re going to apply for a compulsory license,’” says Bruce Boyden, Assistant Professor of Law at Marquette University Law School.

But Aereo’s letter has another key feature: It makes no mention of the Telecommunications Act whatsoever. That means Aereo’s performing a potentially brilliant bit of legal ju-jitsu by trying to take advantage of the two laws’ different definitions of a cable company. It wants to be seen as a cable company to the Copyright Act to get access to the compulsory licenses, but not as one to the Telecommunications Act, which would bring about FCC regulation and require it to pay retransmission fees to broadcasters. When asked if this is indeed Aereo’s new strategy, a spokesperson for the company told TIME simply to “refer to Wednesday’s filing,” which “should answer [the] question.”

Crucially, the Copyright Act’s compulsory licenses would in all likelihood be cheaper than the Telecommunication Act’s fees, meaning that if this all works, Aereo might just survive economically as well as legally.

“It depends on the number of subscribers they have … but I think it’s fair to say [compulsory licenses cost] less than what you’d pay for retransmission consent,” says John Bergmayer, a senior staff attorney at Public Knowledge, an intellectual property advocacy group.

Aereo’s new strategy “could come out any number of ways,” says Bergmayer, who added that any judge involved will have to carefully navigate the murky waters between the Telecommunications Act and the Copyright Act’s differing definitions. But Aereo is facing long odds: While it insists the Supreme Court called it a cable company, the Court’s decision failed to specifically “hold that [Aereo is] a cable system under [the Copyright Act],” Boyden says, meaning a judge might not accept Aereo’s argument.

On top of that, the Second Circuit actually faced a similar case several years ago, eventually deciding that a similar streaming company, ivi, didn’t qualify for the Copyright Act’s licenses—a decision the Supreme Court let stand. Aereo is a slightly different case—ivi streamed to all customers regardless of their geographic location, while Aereo took pains to limit streaming to spots where people could already receive broadcasters’ over-the-air transmissions for free. Aereo actually says the Supreme Court decision against it overturned the lower court’s ivi decision, but, as Boyden argues, “there’s nothing directly in the Aereo Supreme Court decision saying [ivi] is reversed, so I think the district court judge will be bound by ivi to say (to Aereo), ‘no, you don’t qualify.’”

Still, there’s nothing like a company performing a last-minute legal hail-mary pass to try and stay alive. Or, as Boyden put it in a football analogy of a different flavor: “[Aereo] is in stoppage time, they’re one goal down, they need a goal to tie.”

TIME Technology & Media

Aereo Lawyers: We’re A Cable Company Now

And therefore, they argue, entitled to a compulsory license under Section 111 of the Copyright Act

In a letter to a District judge on Wednesday, lawyers for Aereo signaled a shift for the television streaming company whose business was halted in late June following a Supreme Court decision.

Aereo’s lawyers are now implying the company — which transmitted television broadcasts directly to users via the Internet — is a cable system and not a technology service provider as the Second Circuit court found. Because of this, the lawyers say they are entitled to a compulsory license under Section 111 of the Copyright Act and should be allowed to continue operating.

“Under the Second Circuit’s precedents, Aereo was a provider of technology and equipment with respect to the near-live transmissions at issue in the preliminary injunction appeal. After the Supreme Court decision, Aereo is a cable company with respect to those transmissions,” the lawyers write in a letter published by the Hollywood Reporter.

They continue, “If Aereo is a ‘cable system’ as that term is defined in the Copyright Act, it is eligible for a statutory license, and its transmissions may not be enjoined (preliminarily or otherwise).”

Following the Supreme Court decision, which found the company violated copyright law and should be required to follow the same rules as cable and satellite companies, the start-up halted business. Lawyers also say that, given the Supreme Court’s 6-3 ruling, any potential legal action against their operations should be limited to the “simultaneous or near-simultaneous streaming of over-the-air television programs.”

Broadcasters argue, however, that Aereo’s arguments are invalid.

“Aereo never before pled (much less litigated) Section 111 as an affirmative defense,” the plaintiff’s lawyers wrote. “Whatever Aereo may say about its rationale for raising it now, it is astonishing for Aereo to contend the Supreme Court’s decision automatically transformed Aereo into a ‘cable system’ under Section 111 given its prior statements to this Court and the Supreme Court.”

TIME TV

How to Roll Your Own Aereo (Spoiler: It’s Not Cheap)

Supreme Court Hears Case Pinning Startup Internet TV Company Aereo Against Major Broadcast Networks
Andrew Burton—Getty Images

Over at Zatz Not Funny!, Dave Zatz addresses the Aereo-sized elephant in the room: How do you replace Aereo now that it’s gone?

The secret to Aereo’s short-lived success was that you didn’t need to buy hardware to use it. You “rented” an antenna stored at one of Aereo’s facilities somewhere, and the company retransmitted the signal over the Internet to you, either in real time or you could remotely record shows to be transmitted later. The most expensive Aereo plan topped out at $12 a month.

So the spoiler, in case you missed it in the headline: rolling your own Aereo-like setup won’t exactly be cheap. It’s okay. You can click away to something else now. I understand.

If you’re still here, we’ll assume that you want some sort of solution that’ll not only let you record TV, but let you stream live TV to yourself on an array of devices. If you just want to use cord-cutting services — you don’t care about live TV, in other words — check out this post for some services to try. We’re also assuming you get a strong over-the-air signal where you live. You can bet Aereo’s antennae were nicely positioned to catch strong signals; the signals to my place in Boston, for instance, are weaker than a toddler trying to lift a car.

Newer TiVo + Add-on Streaming Box

TiVo wants your business, to be sure, though Zatz figures “cord cutters will need to front about $300 in hardware and $15/month to approximate Aereo.” That’s for a base-model TiVo Roamio box ($200 MSRP) — the only version to sport over-the-air antenna connections — and monthly service. You’ll also need to add TiVo’s streaming box ($130 MSRP), which only streams over a Wi-Fi connection and doesn’t yet sport an Android app.

Older TiVo + Slingbox

If you really want to stream it all, your best bet, according to Zatz, is a used TiVo Premiere box with lifetime service attached to it. That means trying your luck on eBay, basically (they seem to be going for north of $200). That’ll let you use an over-the-air antenna to record shows on the major networks for later. Then, for transmitting live and recorded TV over the Internet to yourself, Zatz says the Slingbox is “still the best game in town.” That means another $180 to $300 in hardware costs, plus paying extra for the Slingplayer mobile apps.

Tablo TV

Zatz also calls Tablo TV “One part Slingbox, one part DVR. Like rolling your own Aereo with a better UI and higher video quality, without those pesky regional restrictions.” The hardware runs between $219 and $289, with lifetime service running another $150 (you can pay $5 a month or $50 a year, too). You also need to supply your own hard drive, which could run a hundred bucks or more if you want to be able to store a lot of video.

No You Don’t Replace Aereo, Silly Rabbit [Zatz Not Funny!]

 

TIME Television

Dear TV Business: Cord Cutters Are Not Your Enemies. They’re Your Fans.

Aereo's rent-an-antenna service lost in court. But if the TV business keeps treating customers as adversaries, it will eventually lose too

Yesterday at the Supreme Court, the great American dream of renting a tiny antenna in a closet somewhere so you could more easily watch The Biggest Loser live on your phone died. The court ruled 6-3 that Aereo, a business dedicated to streaming over-air TV signals online to subscribers, was ripping off broadcast networks by taking a free product and selling it like bottled tap water from a public drinking fountain. The Aereo Speedwagon got a flat tire.

I’m not a lawyer. I don’t even like that many legal dramas. So I can only assume that SCOTUS is correct in saying that Aereo’s system was a cheat. Fair enough. And I cover TV closely enough to know that it costs a lot of money to make. Broadcasters saw Aereo taking their signal and selling access to it without giving them a dime; they would be stupid not to try to quash that. Also fair enough.

But if broadcast TV–and the larger TV industry–is a healthy business, it shouldn’t look at the Aereo case as a thumbs-up to continue the status quo. A healthy business would ask: What did customers want from Aereo? And why aren’t we just giving–or selling–that thing to them ourselves?

In simplest terms, Aereo customers wanted a way of getting “free” (scare quotes since they paid Aereo and because nothing is truly free), live broadcast TV without paying hundreds of dollars a year for cable. Yes, they could do this with a digital antenna hooked to a TV, a computer or a DVR, but in practice not everyone can get quality reception. In any case, wanting to get over-air TV without having to pay cable for the privilege is not an outlandish demand; it’s something you’re supposed to be able to do in exchange for broadcasters using public airwaves for free. Aereo users also liked being able to stream that TV to mobile devices–live, not after a day or a week on Hulu–which is not a condition of the networks’ getting public spectrum but should not outrage networks, for whom the more viewers the better.

Did anyone really need that? Maybe not! Maybe Aereo was a stupid product. (I was not a subscriber.) Maybe a devoted consumer could replicate its effects with various workarounds, and maybe a sane consumer could just live without it. So what? Since when is the industry that is bringing you the 16th season of Big Brother not in the business of giving people stupid things they want? Particularly if they’ll pay for it?

One answer is that, while the networks have to technically be in the business of broadcasting for free, in practice they now depend on a system where most people get their signal from cable operators, which collectively pay several billion a year in “retransmission” fees. If Aereo’s methods were legal, cable companies would probably mimic them. And cord-cutting–going without a cable subscription–is a greater threat to cable companies, but the networks also have little incentive to upset this system by making it much easier for penny-pinching couch potatoes to do.

This situation is not all the broadcast networks’ fault by a long shot. There is a complex network of media companies–many owned by the same conglomerates–who are invested in the $200/month big cable bundle: broadcasters, cable channels, premium channels, studios, cable and satellite carriers. Their interests often conflict–as you noticed if CBS disappeared from your cable screen in the middle of the US Open–but for complex, intersecting reasons, they generally owe allegiance to the existing business model of The Big Bundle.

Which means that the larger TV business ends up treating its consumers like adversaries. There are far more options for TV watchers than a decade ago, yet not as many as there could be. You can watch, say, the Olympics on your iPad–but you have to prove you have a cable subscription, even if your cable company doesn’t provide the Internet bandwidth you’re using. You can stream many shows eventually, but you can’t stream much live TV legally for any price. You can choose from a few cable packages, but they all involve subsidizing plenty of channels you’ll never watch. If a certain choice would threaten The Bundle, the answer is: Nope. You don’t really want that. Besides, what else are you going to do?

Well, whatever. Business isn’t a popularity contest, right? And it’s possible to base a successful industry on limiting options and trusting your customers have little other choice–ask the airlines! Of course, Elon Musk’s supersonic tubes are not going to become a practical alternative to air travel any time soon. And maybe TV can manage its own way for a long while yet. But even with the restrictions that the current system sets up, a not-insignificant number of would-be cable subscribers are saying, eh, maybe Netflix isn’t the same, but it’s good enough. I’m not going to argue that TV and cable companies have an ethical obligation here–because LOL–but they may have a long-term interest that they’re sacrificing in the name of squeezing ever more out of The Bundle for now.

But changing our media options isn’t just about demanding things from the bad old corporations. Consumers have an obligation here too: to recognize that TV doesn’t appear in front of your eyeballs like magic. If the current business model gives way to a more a la carte one, that doesn’t mean it will be cheap. A legal Aereo-like service would likely cost more than Aereo charged. Picking and choosing to subscribe to a few channels–without the group subsidy from the Bundle–will probably cost much more than most people assume, and depending what you choose, could cost more than The Bundle.

Media choice, in other words, isn’t magic, but it’s also not something consumers need to be protected from. Every “problem” that technology creates for TV companies–startups like Aereo, people sharing HBO GO logins–is also a sign that people love TV. Why not show those TV lovers a little love too?

TIME Supreme Court

Explaining Aereo’s Demise: Bad for Cord-Cutters, Good for Lawyers

Supreme Court Aereo
Chet Kanojia, chief executive officer of Aereo Inc., left, leaves the U.S. Supreme Court following oral arguments by Aereo Inc. and American Broadcasting Companies Inc. in Washington, D.C., U.S., on Tuesday, April 22, 2014. Bloomberg—Bloomberg via Getty Images

The Supreme Court ruled out one type of TV gizmo, but the question of how copyright law works in the cloud-computing age remains unresolved

The U.S. Supreme Court’s decision today in the much-awaited Aereo case leveled a gnarly blow to the growing population of “cord-cutters” and granted an unexpected boon to Washington lobbyists.

The decision limits cord-cutters’ choices in what is an already anemic landscape. As of now, people who want to watch TV without paying for cable or satellite television can subscribe to video streaming sites like Netflix or Hulu for a set price each month. Or they can purchase actual hardware, like Apple TV or Roku, which act like updated, Internet-connected versions of old-school set-top cable boxes.

But when it comes to negotiating copyright fees—the heart of the Aereo case—those much-celebrated “disruptive technologies” aren’t really all that disruptive at all. All of them, from Netflix to Roku, play by the entrenched industry’s rules, dutifully paying what’s known as retransmission consent fees (or “retrans fees”) to broadcasters and other content producers to transmit their shows to paying customers. Netflix, for example, paid AMC for the rights to offer binge-watch favorite “Breaking Bad.”

Aereo was the only company that side-stepped the industry entirely by refusing to pay any retrans fees whatsoever. Aereo argued that it was merely facilitating people’s established right use an antenna to capture “free-to-air” broadcast signals passing through public airwaves. For the last 30 years, the court has interpreted the Copyright Act to protect people’s right to watch broadcast TV captured over an antenna at home. So long as that TV watching experience constituted a “private performance,” within the definition provided by the law, broadcast companies could not demand payment from people, the court held.

But on Wednesday, the court did not buy Aereo’s argument. Its decision not only obliterated Aereo’s business model, it also threw wide-open the door for new questions about certain passages in the Copyright Act. What is the definition of a “private performance” anyway? Why is it a “private performance” if I put an antenna on my roof, capture broadcast signals, and save them onto my DVR player to watch later, and it’s not a “private performance” when that antenna is 20 miles away in Aereo’s antenna farm, and I save those broadcast signals onto the cloud?

And with that—cue the lawyers!

In the ruling today, both the majority and dissenting opinions predicted future scuffles both in Congress and the courts over exactly this question. While the majority ruled that customers streaming broadcast TV through Aereo fell under the category of a “public performance”–not a private one–the three dissenting justices argued that Aereo had not, in fact, “performed at all.”

In both opinions, hundreds of words were dedicated to parsing the meaning of a “performance” and both ended up leaving open the possibility that the court would have to hear more cases on the matter when new technologies continued to emerge. Both suggested that perhaps Congress would need to clarify the meaning of the law.

“We cannot now answer more precisely how the Transmit Clause or other provisions of the Copyright Act will apply to technologies not before us,” Justice Steven Breyer wrote for the majority. “Questions involving cloud computing, DVRs, and other novel issues not before the Court…should await a case in which they are squarely presented.”

That sort of deep ambiguity is music to the ears of lawyers and lobbyists. Over the next year or so, Washington should gird itself for hordes of well-paid lawyers to pore over the Copyright Act in an effort to interpret it—and particularly the definition of a “performance”—in such a way that it behooves their clients and, perhaps more to the point, squeezes out whatever competition has emerged in that rapidly developing space.

We should expect cloud computing companies, including Dropbox, Google and Microsoft, to try to ensure that the definition of “performance” does not expand to include every time someone “plays back” a file on one of their services. We should also expect that other industries, particularly those that gain from strong copyright laws, like the Motion Picture Association of America, will try to make that the definition of “performance” as broad as possible in order to create legal concerns for cloud computing companies that allow users to store files without checking for copyright violations.

Whether Aereo will be around to see the other shoe drop remains to be seen. While most analysts agree that Aereo will be lights out by the end of the summer, the company seemed unwilling to throw in the towel. “Our work is not done,” Aereo CEO Chet Kanojia said in a statement following the decision “We will continue to fight for our consumers and fight to create innovative technologies.”

TIME Tech Policy

Aereo Backer Barry Diller: ‘It’s Over Now’

Barry Diller Aereo
Barry Diller, chairman and chief executive officer of IAC, pauses during an interview in New York City on April 1, 2014 Scott Eells—Bloomberg/Getty Images

The controversial TV-streaming service Aereo’s business methods were ruled illegal by the Supreme Court on Wednesday morning, dashing the startup’s plans to disrupt the well-entrenched pay-TV industry. That’s particularly bad news for media bigwig Barry Diller, who helped the startup get off the ground when his company IAC led a $20.5 million funding for Aereo back in 2012.

Diller is a former chief executive of both Paramount Pictures and Fox who has since leaped into the digital age full-bore. His current company IAC owns hot digital properites such as CollegeHumor, Vimeo and OkCupid. Aereo fit in nicely with his vision of the digital future, and he rewarded the startup with considerable cash. In addition to the original $20.5 million, IAC was also involved in later funding rounds of $38 million and $34 million for Aereo, according to Crunchbase.

Now it’s unclear whether the startup will have any future at all. Diller had previously said there was “no Plan B” if the courts ruled Aereo illegal. On Wednesday, he seemed willing to accept defeat. “We did try,” he told CNBC, “but it’s over now.”

Diller told Bloomberg that though the millions dumped into the company weren’t a significant financial loss for IAC, blocking Aereo’s technology was “a big loss for consumers.”

TIME Law

WATCH: What Aereo’s Supreme Court Case Means For You

The way you watch television could hang in the balance

+ READ ARTICLE

Television streaming startup Aereo could revolutionize the way we watch our favorite programming, but its future is in the hands of the Supreme Court, which is set to decide in the coming days whether Aereo’s streaming methods are legal.

Want to know more about Aereo and what the case will mean for you? Watch TIME’s explainer video above.

MONEY Sports

Your Guide to Watching World Cup Soccer—Legally, for the Most Part

There are more ways than ever to tune in to the World Cup, held this year in Brazil. Here are all the options.

+ READ ARTICLE

The World Cup starts on Thursday, and if you’re like pretty much everyone in the world (the 2010 Cup drew an audience of 3.2 billion), you’re looking for ways to watch this event at home, at work, on the train, maybe in the shower. Here are all the legal methods — plus a couple ambiguously legal ones — to get your soccer football fix.

Regular Old Television

If you own a TV (or can sneak one into your office), you automatically have access to the 10 matches that will air on ABC. Have cable or a satellite TV package? Then you can watch the other 54 matches exclusive to ESPN and ESPN 2. Here’s a TV schedule to help you keep track of all the channels. As you might guess, the first two scheduled matches for the United States team, on Monday, June 16 (versus Ghana) and Sunday, June 22 (versus Portugal) are being shown on ESPN, not ABC.

Streaming Via ESPN

TV? What is this, 2010? Nowadays it’s all about watching everything on your computer, smartphone, or tablet, and ESPN has delivered with the relaunched ESPN FC. The website is a soccer news and video hub that sports both a website and a downloadable app for your mobile devices. During the World Cup, ESPN FC will be airing all of ESPN and parent company ABC’s World Cup coverage. That means you can watch all 64 matches online as well (assuming your cable provider is on this list). The problem? Just like with NBC’s online streaming of the Winter Olympics, you need a cable or satellite subscription to access any of the content.

Stream Directly From Your TV

Want to watch at work, but don’t have a TV at your desk? Devices like Slingbox let you stream direct from your home TV and then watch on the Slingbox website or app. It also offers a 1080p viewing experience in case ESPN’s quality dips. You can stream anything you could normally watch on your home TV, meaning no ESPN unless you pay for cable or satellite. However, Slingbox can stream ABC matches from your TV if you own a digital TV tuner (which comes included in certain Slingbox models).

Try Aereo (Before the Supreme Court Bans It)

Aereo is a service that has planted thousands of tiny TV antennas all around the U.S. and then streams that content to a subscriber’s computer or mobile device. (This creative method of skirting copyright law has led to a bit of legal trouble.) Because it largely depends on what it can pick up off the air, Aereo’s content essentially consists of the major networks. Luckily for you, that means all 10 matches being shown on ABC. (Unlucky for you, no matches featuring Team USA, at least not in the beginning.) The best part? The company is offering a 30-day free trial (after that, it will cost $8 a month). Just make sure you live in one of its coverage areas.

Stream for Free … in Spanish

Spanish language channel Univision is streaming every single match from the first two rounds for free, without requiring the viewer to be a cable or satellite pay TV subscriber. Even better, the company offers an Android and iOS app in addition to its website. The catch? Well, obviously, broadcasts are in Spanish. If you speak the language, this is muy bueno, and if you don’t, you can listen to EPSN radio with the match on mute. Consider giving the original broadcast a chance, though. Spanish announcing is always better. Gooooooool!

Cross the border

As for the more… creative methods for World Cup viewing, many U.S.-based soccer fans head across the border — virtually. Canada’s CBC, the U.K.’s BBC, Ireland’s RTE and Australia’s SBS are all streaming everything for free—but only to people who live in their respective home countries. To get around the regional lock, hard-core fans use services like TunnelBear that create a virtual private network, masking one’s true location.

Is it legal? Accessing content from outside these networks’ region is a clear violation of their terms of service; but whether users are actually breaking the law is apparently a grey area. “While there are differences among the courts about the use of masking IP addresses to gain access to a site,” Electronic Frontier Foundation staff attorney Mitch Stoltz told Forbes, “it is pretty well established that simply violating the Terms of Service alone is not sufficient to warrant a violation of the Computer Fraud and Abuse Act.”

Stoltz admits that authorities might go after a TunnelBear user as an example to others, but says such an outcome is “very unlikely.” For its part, TunnelBear emphasizes that it is based in Canada, outside U.S. jurisdiction, and that there is “no Canadian law that requires us to keep logs on customer usage.”

TIME Gadgets

Aereo Arrives for Chromecast As Supreme Court Decision Looms

Google Chromecast
David Paul Morris—Bloomberg/Getty Images

Delayed by a week, Aereo's TV-streaming service is finally available for Google Chromecast players.

Aereo, the Internet television streaming upstart currently embroiled in a historic Supreme Court showdown with broadcast companies, is finally available for Google Chromecast. Its arrival on Google’s streaming media dongle Thursday comes one week after its intended debut.

Aereo wrote on Twitter last week that it was delaying Chromecast support until June 4 “to work out a few kinks.” Make that June 5 then: the Aereo app is live now on the Google Play store. The move adds another significant Aereo player to a lineup that includes browsers for Windows PCs, Linux PCs and Macs, iOS devices, Apple TV and Roku set-top boxes.

If you have a Chromecast dongle, you live in an Aereo coverage area and you’re willing to pay the company’s monthly subscription fee ($8 for 20 hours of DVR space, $12 for 60 hours and the option to record two shows at once), you can connect online to Aereo’s local antenna bank to receive and record live broadcast TV. There’s no additional subscription fee — Aereo handles all storage of recordings on its end and you don’t need to have an existing cable subscription to view the antennae-captured shows.

The catch — and this is why signing up today isn’t risk-free — is that Aereo is smack in the midst of a momentous Supreme Court battle, squaring off with indignant broadcast companies for its right to exist. Since Aereo streams over-the-air content it intercepts via antennas — each the size of a dime and leased to one user — it claims it’s doing nothing you couldn’t yourself, and thus it owes broadcast companies nothing.

The broadcast companies (naturally) disagree. They claim Aereo is in violation of federal copyright law. At issue is whether Aereo’s service qualifies as a public or private performance: if SCOTUS deems it public, Aereo’s in trouble, whereas if it’s deemed a series of private transmissions, the company may be able to continue unperturbed.

A ruling is expected any day now.

TIME Television

Cable Industry Frets Over Future of Your Television Bundle

Change is coming to the way you watch television, and there will be winners and losers. At the annual cable industry conference, insiders are squirming in their seats.

LOS ANGELES—Cable television’s lucrative strategy of “bundling”—charging customers for a package of channels rather than allowing them to pay only for the ones they want—came under attack here Tuesday during the first day of the National Cable & Telecommunications Association’s annual Cable Show.

Jerry Kent, the CEO of Suddenlink, a regional cable broadband service, said during a panel discussion that when it comes to bundling, the industry is “at a tipping point.” The model will fail, he warned, as soon as “certain cable operations stop carrying certain programmers because it’s too expensive,” he said. “Or when people start disconnecting” because their cable bill is too high.

Nancy Dubuc, the president and CEO of A+E Networks, who spoke on the same panel was even more blunt. “A la carte is already coming,” she said, as the audience, nearly all of whom draws a paycheck from the bundling model, squirmed in their seats.

While the pay-TV industry, which includes cable, as well as satellite and fiber providers, like Verizon FiOS, has quietly relied on bundling as their lifeblood for decades, the model has drawn fire in recent years. That’s partly because the price of those expanded basic cable bundles have grown at more than twice the rate of inflation every year for the past 17 years, according to data from the Federal Communications Commission. And it’s partly because Americans’ TV-watching habits have started to change. Consumers can now purchase many episodes and series “a la carte” through online companies, like Apple’s iTunes or Google Play.

Just last week, the premium cable channel HBO agreed to allow Amazon Prime customers to stream popular shows like “The Wire,” “The Sopranos,” and, at some point in the near future, newer series like “Girls.” (Disclosure: TIME’s parent company, Time Warner, is the owner of HBO as well as several other cable television channels that benefit from bundling.)

The discussion about bundling comes just a week after the Supreme Court heard a case involving a small start-up, Aereo, that has built its business model around snatching broadcast signals from the airwaves, “recording” them onto the cloud, and delivering customers a premium, a la carte experience—all without paying content producers pricey “retransmission fees.” If the justices decide in favor of Aereo and it was widely adopted, the consumer need to pay for a bundle of cable channels may be further eroded.

With all these changes, industry has reason to squirm. In a report last year, media analysts at the investment firm Needham & Company estimated that if all TV content were unbundled, the TV industry would take a $70 billion dollar hit, and all but 15 or 20 channels would disappear. During an afternoon event at the Cable Show, Amdocs, a company that works in customer experience, announced their findings from a survey of North American households: more than half would prefer to pay individually for channels they actually want, rather than a large bundle of choices.

Kent and his fellow cable execs, including Rob Marcus of Time Warner Cable, which is no longer owned by Time Warner, pointed the finger at programmers, like ESPN or the Disney Channel, which charge large fees to distribution companies for the privilege of transporting their content to customers. Distributors, whose customers demand channels like ESPN, have no choice but to pay programmers’ high prices, a cost that’s passed onto customers themselves.

Partly in response to rapidly rising customer costs, the FCC proposed rules last month that would limit programmers’ ability to leverage high prices from distributors. For the same reason, Canadian regulators directed TV companies late last year to offer customers a la carte choices by 2015.

John Skipper, the president of ESPN, a network owned by the Walt Disney Company, who spoke on the same panel as Kent and Dubuc, said the reaction against bundling was unfounded. He lamented “that old canard” that only a few people are watching sports while “grandmothers are paying for it” through bundling. “It’s a nice rhetorical device, but it’s not fact,” he said, adding that ESPN was “the single greatest buttress in the pay-TV package.”

Skipper went onto slam online video-streaming sites, like Netflix and Amazon, which he said were encroaching on the old guard’s business model. “Shame on us if we don’t protect our turf,” he said.

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