On Wednesday, the International Center for Law & Economics, along with the Competitive Enterprise Institute, filed an amicus brief in the Ninth Circuit Court of Appeals supporting the appellants in Fox Television Stations, Inc. v. Aereo Killer LLC. The case arose out of Aereo Killer’s Internet video platform, from which it would retransmit content without either the consent of the broadcast stations or permission from the holders of copyrights in the content it distributed.
Aero Killer essentially seeks to engage in regulatory arbitrage by, on the one hand, claiming that it qualifies for compulsory licenses as a “cable system” under Section 111 of the Copyright Act, while on the other hand seeking to avoid applying for “retransmission consent” under the Cable Act.
In our brief we explore the issue of the interplay between “retransmission consent” and “compulsory licenses,” and on Aereo Killer’s unjust and illegal attempt to create a carve out for itself in violation of Congressional intent:
Defendants seek a compulsory license under Section 111 of the Copyright Act, which would allow them to sell a service that retransmits copyrighted television shows without permission from the program owners—while paying only statutorily determined royalties that do not come close to market rate for Plaintiffs’ programming. At the same time, however, Defendants have configured their service so that they do not need to obtain consent from the broadcasters whose signals they wish to retransmit, because Internet-based retransmission services do not meet the Communications Act’s definition of an MVPD. On the latter point Defendants are correct: Internet-based retransmission services are not MVPDs. However, treating their service as a “cable system” under the Copyright Act, but not under the Communications Act, is contrary to the statutory framework Congress created.
In practice, and by design, therefore, a service that retransmits television programming is subject to both provisions, or neither of them, depending on the technical details of the service. Congress affirmed its intent that these provisions go hand-in-hand in 1994
Congress crafted the statutory regime as it did precisely to prevent the unjust enrichment of television resellers at the expense of broadcasters and copyright owners. Defendants do not operate a cable system and are thus ineligible for the compulsory copyright license. If they wish to retransmit plaintiffs’ television programming, they are free to bargain for a copyright license, as so many other Internet-based video distributors have done.
