From Forbes

When Aereo was arguing the case it ultimately lost before the Supreme Court, it went to great pains to argue it wasn’t a cable company. The Court, for its part, wasn’t having it. In its decision, it called the video streamer “substantially similar” to a cable company, said the service bears an “overwhelming likeness” to one, and was “for all practical purposes” the same kind of business. That rationale was critical in handing Aereo a defeat, but also left the company an opening courtesy of the very law used to bludgeon it: the 1976 Copyright Act. Under the Act, a cable system is entitled to seek a “compulsory license” to broadcast content and Aereo plans on doing just that.

What’s fascinating about this twist is that it represents a legal 180 for all involved, first and foremost. Aereo had carefully avoided classifying itself as a cable system in part because an earlier case WPIX v. ivi had suggested that services repurposing broadcast television for internet streaming weren’t cable systems. Though the Court didn’t explicitly say so, it appears to have overturned that precedent in the Aereo case. Furthermore, in going the route of seeking a compulsory license, Aereo is likely to find itself allied with another streaming service, FilmOn, which had decided in the immediate aftermath of the Court’s decision to do just that. Apparently, Aereo’s legal and business strategists — with some time to deliberate — believe what FilmOn concluded: This might be the lowest resistance, lowest cost path to gain access to the content in question.

Finally, in what might be the strangest coincidence of all, there are faint echoes of the decision that declared the Affordable Care Act, Obamacare, legal back in 2012. In that case, the majority opinion concluded that the “penalty” for not having insurance was a tax — arguing against the Administration’s position that it wasn’t. But in doing so, Chief Justice John Roberts wrote, the ACA was legal. Here, the Court hasn’t gone quiet as far yet in declaring Aereo’s business legal. But by essentially declaring it a cable system — again arguing against the company — it may have created the only path to legality Aereo needs.

As Justice Sonia Sotomayor put it during the hearings on the case: “I mean, I read it and I say, why aren’t they a cable company? … Do we have to go to all of those other questions if we find that they’re a cable company? We say they’re a capable company, they get the compulsory license.”

Aereo’s case was sent back to U.S. District Judge Alison Nathan and it asked for immediate clarification that it’s eligible for that license under Section 111 of the Copyright Act. Alki David, the CEO of FilmOn, has been making that argument for the past 4 years. Back then, he was trying to transmit local stations over his service but the networks stopped him. “Our argument in 2010 was we’re a cable system,” he said. “Judge [Naomi] Buchwald didn’t understand U-verse and Fios was the same essential technology.”

David’s argument is that his service was taking content and turning it into data packets just like AT&T and Verizon were with their TV offerings. “If you have over 50 subscribers and have cables and wires, you are a cable system,” he said. FilmOn, for its part, serves more than 45 million customers across the U.S. and Europe, mostly showing them video-on-demand content as well as some cable channels it has licenses for. But until the Aereo decision, it’s been shut out of the broadcast channels that Judge Buchwald didn’t believe it was entitled to back in 2010 .

The case is now in the same U.S. District Court albeit in the hands of Judge Nathan. While FilmOn isn’t a party to Aereo’s case, it’s clear David hopes the outcome will be different this time. “It’s the fundamental right of everybody in america to have local TV made available to them,” he said.

David and his legal advisors believe that with the Aereo decision in hand, they have a strong argument to push for a compulsory license. In that respect, they are now aligned with Aereo, though it’s likely the two companies will end up as competitors should this tactic prove successful.

But for that to happen, either the Courts will have to direct the U.S. Copyright Office to take action or the office will need to do so on its own. The timing for either scenario is uncertain. In the meantime, this could all theoretically be preempted by the broadcast networks coming to an agreement with Aereo, FilmOn and anyone else who wishes to take free, over-the-air broadcasts and sell them over the internet.

Why might they want to do that? Because the balance of power could shift if the compulsory license is granted. CBS, NBC, ABC, and Fox receive on the order of $5 per month in the New York area for each cable subscriber in exchange for their content. They get those fees as part of a negotiation that’s enabled by a different law: the 1992 Cable Act. The cable companies essentially have to agree to pay more for broadcast content because those networks all are part of larger companies that own numerous channels essential to keeping subscribers happy. But for Aereo, it might be enough — at least for the time being — to just get the networks it lost back on the air. And under a compulsory license, they would almost certainly pay substantially less than $5 per customer (the formula is complex, but it’s based on a percentage of revenues).

Aereo had argued that without a favorable Supreme Court ruling, it had no future. But by looking farther into the past, it’s now seeing things differently. Yet the company again finds itself hoping for a favorable outcome at the hands of a federal court. As Yogi Berra once said, “Its like deja vu all over again.”

For more on this story go to: http://www.forbes.com/sites/markrogowsky/2014/07/10/the-aereo-saga-takes-a-weird-turn-with-a-possible-ally-and-shades-of-obamacare/

For a lot more iNews Cayman related stories go to: “Aereo shutters its TV streaming service… for now” published June 30 2014 at: http://www.ieyenews.com/wordpress/aereo-shutters-its-tv-streaming-service-for-now/