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Canadian content makers take stand against Aereo’s signal-sharing service

Aereo founder and CEO Chet Kanojia stands next to a server array of antennas as he holds an antenna between his fingers.

Bebeto Matthews/AP

Canadian musicians, actors, and TV and film producers lined up Monday with powerful players in the U.S. television industry, as the American broadcast networks prepare to go to the U.S. Supreme Court to fight a high-tech startup they say threatens their very existence.

The Canadian Media Production Association (CMPA), the lobby group Music Canada, the Society of Composers, Authors and Music Publishers of Canada (SOCAN), the actors' union ACTRA, and other Canadian professional organizations filed an amicus brief with the U.S. Supreme Court arguing against Aereo Inc., a two-year-old service that enables subscribers to watch live or recorded TV signals from over-the-air channels on a smartphone, tablet, computer, Roku device or Apple TV box.

Aereo, which costs $8 (U.S.) per month for basic service and an additional $4 for more DVR storage, operates in 12 markets, including Austin, Tex., where it launched Monday. It features a lineup of about 30 channels.

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Backed by the media mogul Barry Diller, Aereo is expanding to 22 U.S. cities by the end of the year. (It has not announced any Canadian plans.)

The U.S. broadcast networks fear Aereo could pose a serious challenge to their businesses. Unlike cable and satellite companies, which remit more than $2-billion every year in payments known as retransmission fees, Aereo does not pay broadcasters to distribute their signals.

The company argues it is not a broadcasting-distribution undertaking similar to cable and satellite companies, but rather a provider of technology that enables individuals to watch free TV, which they could do on their own with a simple over-the-air aerial. It has prevailed on nearly every court challenge, setting the stage for a hearing before the U.S. Supreme Court on April 22.

"It's probably not fair to say, but a lot of innovation on the Internet these days feels sometimes like, 'How can you avoid compensating somebody who would otherwise be compensated, and that gives you more value?'" Michael Hennessy, the president and CEO of the CMPA, said in an interview. "This is a commercial service, and it's aimed at a mass audience. The idea that it's just the same as individual households pulling down signals, I don't buy it, and I think that's one of the reasons we signed the brief."

"We're always on the side of protecting flows of compensation to producers for rights in content," he added. "We're not against innovation, but avoiding payment for rights is not innovative, in our view."

Like the U.S. broadcast networks and their TV and film studio partners, the Canadian associations argue Aereo's existence depends on a "perceived loophole" in U.S. copyright law that appears to differentiate between forms of transmission.

"In their amicus brief, the international associations and copyright scholars argue that the U.S. Copyright Act, its legislative history, and treaty history make clear that Congress intended to enact a broad technologically neutral public performance right that would not leave open the loophole Aereo claims exists," wrote Barry Sookman, a partner with McCarthy Tétrault, in a blog post published Monday.

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Mr. Sookman's partner, Steven Mason of McCarthy Tétrault, filed the brief Monday. It cited Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers of Canada, a 2012 Supreme Court of Canada decision which held that on-demand transmissions of music streams constituted communications "to the public," rather than private interactions.

Other backers of the brief include the international recording industry lobby group IFPI, the International Confederation of Music Publishers (ICMP), the Confédération Internationale des Sociétés d´Auteurs et Compositeurs (CISAC), the International Federation of Actors (FIA), the Fédération Internationale des Associations de Producteurs de Films (FIAPF), the Australian Copyright Council, and the British Copyright Council.

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