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17
May
2013

Ripples from Aereo TV decision continue to widen

It's only been a little over six weeks since the Second Circuit Court of Appeals issued its decision in the Aereo TV litigation, which is summarized here: http://www.kandutsch.com/articles/aereo-2-broadcast-networks-zip. We've just begun to see the ripple effects of the court's decision, including News Corporation (Fox) announcing that it will consider re-packaging its free off-air TV channels as pay-TV cable channels, Senator John McCain's amendment of his cable a la carte bill in Congress to require the FCC to auction the spectrum of any broadcaster that moves its must-see programming to cable, Time Warner Cable's statement that if Aereo emerges victorious, the company might invest in similar antenna technology to avoid retransmission consent fees. See http://www.washingtonpost.com/business/technology/2013/05/02/f6b43b84-b27b-11e2-baf7-5bc2a9dc6f44_story.html.

Now DIRECTV has announced that it is considering testing a new set-top box that would include an integrated tuner designed to capture both over-the-air and satellite signals, allowing DIRECTV to avoid paying millions of dollars each year in retransmission consent fees.

"We're spending a lot more time looking at over-the-air solutions," said DIRECTV CFO Patrick Doyle. "Where if you go back three, or four, or five years ago before retrans started to grow like it did, it didn't make sense for us ... Now we're spending a fair amount of time on the technology side of taking an over-the-air signal, integrating it in our set-top boxes, and not paying a retrans cost." http://www.lightreading.com/cable-manufacturers/directv-weighs-ota-tuners/240155019

While the future of the free television programming is uncertain, it seems clear that the current retransmission consent regime is on thin ice, and that probably means, most immediately, a la carte choice for consumers – an obvious social good that has been deferred for all too long thanks to our dysfunctional content distribution models and captive politicians and regulators. Barry Diller and the rest of his Aereo team deserve a lot of credit for shaking things up.

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