Garrett Wollman
Tue Jul 1 03:49:09 EDT 2014

<<On Tue, 01 Jul 2014 01:30:37 -0400, A Joseph Ross <> said:

> On 6/30/2014 2:05 AM, Martin Waters via Boston-Radio-Interest wrote:

>> Now, I would like to know what's going to be done to collect the
>> royalties Aereo should have been paying.

> Probably very little.  Aereo probably will have no money and likely
> will file bankruptcy.  The plaintiffs in this case will probably be
> quite happy to force Aereo to shut down, and won't throw good money
> after bad trying to collect blood out of a stone.

There's always the chance that Aereo's lawyers can see some daylight
between the Copyright Act (requiring the statutory license regime) and
the Communications Act (which defines a cable system for the purpose
of retrans consent).  But that seems like a difficult and unlikely
course given the thrashing that they got in the Supreme Court.

A lot of the reporting on this case has conflated the royalties paid
under the statutory license given to all cable systems in the
Copyright Act (17 USC 111(c)) with the additional rents stations are
able to extract from MVPDs in retrans "negotiations" under the 1992
Cable Act (47 CFR 325(b)).  Aereo's position all along was that they
were not engaged in "retransmission" so they were not subject to the
statutory license.  Now that the court has determined that Aereo is,
in effect, a cable system -- at least for the purposes of the
Copyright Act -- Aereo should be entitled to take the statutory
license, and royalties under that license are owed to the Register of
Copyrights and NOT to individual broadcasters.

Subsection 325(b) of the Communications Act does not appear to provide
any penalty for violations of retrans consent, unlike section 325(e)
(regarding satellite carriage of out-of-market signals), which
provides for statutory damages of $25,000 per violation.  So my guess
is that Aereo does not owe anything to the broadcasters, but may owe
quite a bit to Copyright Office -- if they can figure out how to apply
the statutory royalty formula to Aereo's situation.

I don't know what priority the Copyright Office would have in any
hypothetical Aereo bankruptcy.


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