FOX-Aereo Dispute Could Force Network Off Broadcast TV, Says Chase Carey

FOX-Aereo Dispute Could Force Network Off Broadcast TV, Says Chase Carey

The News Corp. president-CEO suggested "converting the FOX broadcast network to a pay channel" during the NAB convention in Las Vegas on Monday

News Corp. president-CEO Chase Carey unveiled the nuclear option on Monday in FOX TV network's fight with Barry Diller’s Aereo over retransmission fees. Carey told a broadcasters’ convention in Las Vegas that if Fox loses its fight with Aereo, it might turn Fox’s broadcast stations into pay TV stations.

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“We won’t just sit idle and allow our content to be actively stolen,” Carey (pictured, left) said in a statement after his speech to the National Association of Broadcasters.

“It is clear that the broadcast business needs a dual revenue stream from both ad and subscription to be viable. We simply cannot provide the type of quality sports, news, and entertainment content that we do from an ad supported only business model. 

“We have no choice but to develop business solutions that ensure we continue to remain in the driver’s seat of our own destiny.  One option could be converting the FOX broadcast network to a pay channel, which we would do in collaboration with both our content partners and affiliates.”

Carey’s statement came little more than a week after a divided appellate court panel in New York rejected major networks and broadcasters request that it stop Aereo from retransmitting TV stations signals over the Web without paying.

Aereo argues that because it uses thousands of tiny antennas, each assigned to a single customer, it doesn’t have to pay the broadcast retransmission fees that broadcasters have demanded from cable systems. Aereo’s system, currently only in New York, allows a customer to see the signal on a TV, a computer or a cellphone.

On the day of the verdict, broadcasters promised to vigorously fight Aereo as the service expands into additional markets.

It’s not yet clear if courts or Washington will decide the future of services like Aereo. In the past Congress has repeatedly questioned any actions that moves content now shown on over the air TV to cable. At the same time, Congress has also heard repeated testimony that retransmission fees can help broadcast stations’ finances.

Carey indicated Monday that Fox may look to Washington for relief. He said Fox believes Aereo, “is pirating our broadcast signal.”

“We will continue to aggressively pursue our rights in the courts, as well as pursue all relevant political avenues, and we believe we will prevail,” he added.

Virginia Lam, an Aereo spokeswoman suggested any move to pay TV for over the air broadcasts would be unfair. 

“Aereo has invented a simple, convenient way for consumers to utilize an antenna to access free-to-air broadcast television, bringing television access into the modern era for millions of consumers,” she said.

“It's disappointing to hear that Fox believes that consumers should not be permitted to use an antenna to access free-to-air broadcast television. Over 50 million Americans today access television via an antenna.

“When broadcasters asked Congress for a free license to digitally broadcast on the public's airwaves, they did so with the promise that they would broadcast in the public interest and convenience, and that they would remain free-to-air. Having a television antenna is every American's right."

There was no immediate reaction to Chase’s comments in Washington.

Rival networks pointed only to a joint statement issued last week.

“This case is still in its early stages and we are confident that when the record is fully developed the rights of content owners will be protected and the courts will conclude that Congress never intended to allow services like Aereo to retransmit our programming for profit without our authorization,” said that statement.