Aereo as American as Apple Pie: Media Mogul Diller
Major television and cable companies' opposition to Aereo is "overblown," media mogul Barry Diller told CNBC on Friday, addressing the controversy surrounding the TV-over-the-Internet venture he backs.
"Broadcasters received licenses for free. And their responsibility on the other side, the quid pro quo, was they were to program in the public convenience and interest," he continued. "And what that then specifically meant is they all had to broadcast and make available with an antenna their signals."
Aereo allows subscribers online access to their local, over-the-air broadcast channels via a remote antenna. The service—with free and paid options—is only available in New York. Plans are in place to quickly expand to Boston and other cities.
"This is a technological platform that, we think, is legal. We think it's in both the spirit and the letter of the law," Diller contended, saying what Aereo charges its subscribers is analogous to electronic stores selling television antennas.
"If the law is changed to say that antenna providers have to pay retransmissions, we'll pay it," he added. "But until you get Radio Shack to do it, we're not going to volunteer."
Last year, major television networks sued Aereo in federal court, alleging copyright infringement because Aereo's not paying lucrative retransmission fees to the broadcasters, like cable and pay-TV operators.
Besides the overhead disadvantage, cable and pay-TV operators would face lower-cost competition from Aereo for customers who only want the major broadcast networks and other stations currently available over the air.
(Disclosure: Comcast—the parent company of NBCUniversal and CNBC—owns the NBC broadcast network and provides cable television service.)