Transcripts For CSPAN2 The Communicators 20130722 : vimarsan

2014 spending bill along with two environmental bills, one on coal ash regulations and the other on epa rules. Meanwhile, the senate gavels back in tomorrow at 10 a. M. Eastern. Members will consider a procedural motion on a bill that addresses fiscal 2014 spending for transportation projects and housing and urban development programs. Live coverage of the house on cspan, the senate here on cspan2. Host this week on the communicators, we want to introduce you to chet kanojia, ceo and founder of aereo. Whether kanojia, what is aereo . Guest we think of aereo as a really new way of thinking about how people are going to consume television in the future. Its an Online Platform which is direct to consumers, and people can get access today to live broadcast television along with a dvr on any device without a cable connection just using the internet for the grand old price of 8 a month. Host and this is overtheair broadcast channels that chemocan get through aereo. Guest that is correct. Host what am i holding in my hand here . Guest thats, actually, the key piece of the Aereo Technology, thats a microantenna. And think about as how you used to have overtheair antennas in the past, they were large. We miniaturized them, so a lot of sophisticated technology. And the purpose of miniaturizing them so we can build hundreds of thousands of these things into a very small room. And by doing that we can allow a cloudbased implementation of how a consumer can capture the signal which is really the big innovation here because the Cloud Technologies allow us to lower the costs down very dramatically, lower barriers to the consumers very significantly because suddenly you dont need boxes, cables or cords, you just go online, sign up and you have access. Thats actually the antenna. Host whats it made out of . Guest copper. Host and thats all it is . Is there a chip . Guest no, thats just the loop, the front end of it, and theres a whole host of technology on a circuit board, and the equipment in its final form looks like telecommunications equipment. Host does this prohide hd provide hd reception . Guest it does, certainly, yes. Host whats the legal status of aereo at this point . I know theres some court cases going on, in fact, one this week was decided. Guest yes. So aereo was challenged by, i forget the amount, but it was, i think, 17 or 20 or 18, somewhere in that range, broadcasters in new york when we announced our intentions to launch the company about a little over a year ago, year and a half ago at this point. And they asked the court for, to stop us as issue an injunction. And we were very fortunate that the court took a really detailed view of the technology. There was a hearing and almost a trial. They concluded that we succeeded on our merits. The technology was going to be lawful and decided not to stop that, so that was a very significant win for the company because it was a threshold issue of whether if our belief in our technology and the analysis we had done was correct. And after that validation we, the plaintiffs appealed that decision in the appellate court, Second Circuit, and early april this year we got a decisioning from the appellate court, again, revalidating the trial courts findings that it was a Legal Technology and should not be stopped. And, you know, as it happens looking for yet another doover, the portfolios appealed that as well the plaintiffs appealed that as well and requested the entire Circuit Court to get together and hear en banc as they call it. Full disclosure, im not a lawyer, but i seem to have picked these terms up these days. And the entire Circuit Panel then commented yesterday denying their request. So thats the current status. While the trial continues at the lower court level and its proceedings and discovery and various other things that are going on. Host how many customers does aereo currently have . Guest we have not disclosed our subscriber count. Were a private company. One of the luxuries of being a private company in particular, so on top of that were in litigation, so, obviously, that complicates things further. What we are finding is that as we go to a city, several tens of thousands of people register, preregister to say we like the idea, we understand the concept, we either today use an antenna or we dont have cable tv or variety of other reasons. We use, we understand online video, we use that, and so this makes a lot of sense for us to combine two, three of these alternatives to create a full experience at a price point that seems a little bit more hodge call pause logical because, you know, most of these people most people dont watch hundreds of channels, they tend to watch four, five, seven, ten channels, somewhere in that range, and theres at least some rationality, some logic along with simplicity, variety and other things that are valuable to consumers. Host are there cable channels that are part of aereos service . Guest so we have, were working with loom Bloomberg Television as a first partner in this thing, and that seems to very done very well. It sort of coinsides with our view that televisions revolution is going to be called what i call skinny live and deep live libraries. Things that are not time sensitive can be in libraries and, in fact, they are. If you go to netflix be, amazon or any of these online libraries, you have a tremendous amount of content that makes it there. And we think people want live for things that are relevant, unscripted so it tends to be sports news, large reality shows, special events, things of that nature. So as a result we focus on news as a first category that we think we can open this platform up to and allow these consumers to have access to different things. So thats host whats your response when broadcasters say youre stealing their signal . Guest you know, at some point you have to sort of call it what it is, its name calling because when three federal courts express an opinion that it is a Legal Technology and its consistent with what congress intended, its difficult for me to sort of look at it any other way except as name calling or mischaracterization. Fact to have matter is that this content is paid for by the consumers in advertising, spectrum that the broadcasters have, and i think its worth clarifying that Aereo Technology is only applied to freetoair television, freetoair broadcast not cable content or cable channels. When we look with a cable channel, for example, in many bloombergs case, its a Productive Partnership where we enter into a commercial relationship with hem. So its difficult for me to even answer the question why is it stealing when youre required to program to consumers interest. A consumer has a right to an antenna. And whether they buy the antenna from radioshack or from air owe is sort of aereo is sort of not relevant. Weve consistently established a paradigm. The length of the wire that connects your antenna to your dvr and to your Television Set isnt a matter of debate, you know . If you live in an Apartment Building where you have a 50foot wire versus a 10foot wire, how is that any different . So we think that, you know, thats our response. Host well, we want to bring into the conversation Matt Schwartz who is a reporter with Communications Daily. Thanks, good to be here. Mr. Kanojia, from the very beginning of your companys existence, aereo have been beset by lawsuits, by the threat of lawsuits. Walk me through your thought process as you decided to start a company knowing that the big broadcasters would immediately attempt to sue you out of existence. Guest well, you know, my hope was and i think when we started, we spent actually a few months Walking Around and educating people. And our hope and intent was that as we educate these folks, you y would recognize that some of this innovation, as surprising as it is or unexpected as it is, can be good and, frankly, here was a great example how upstart new Technology Company was trying to expand the audience base, build technology that was outside of the restricted sort of cable ecosystem, really innovate around a lot of different areas, user interfaces, cost points, variety of different things. So our goal actually, our hope was that we would educate people, and we understood there would be controversy, but, you know, there was sort of a belief that they would, you know, logic would prevail. The Second Circuit sided with your company in april and just refused to hear it again en banc this past week, but one of the judges in the dissent and both of those instances had some pretty or harsh words for you. He calls aereos service a sham or a scam, a, quote, goldberglike contrivance overengineered in an attempt to avoid the overreach of the copyright act. How would you respond to those sorts of accusations . Guest first and foremost, i think its important to note that the company spends a tremendous amount of resource, time and money, to understand the law, try to engineer technology to fit within the law. So i respond to that by saying we, all were doing is we understand the law, we are taking advantage of the guardrails that the law has set up, and the purpose is to build technology that complies within those guardrails. And i think thats a perfectly fine thing to do. Lots of how would you, how would you characterize somebody who looks at the speed limit while driving and sets their car to, essentially, not exceed the speed limit and follow the law . The broadcasters might say to you that while you may be acting within the letter of the copyright law having a specific antenna for each individual customer, by not doing public performances, youre violating the spirit of the copyright law and the Program Producers arent getting their fair share of copyright royalties. Guest so, you know, i think we would answer to that in the following way. Number one, today and i think this is the nabs statistic about 54 Million People get television over the air using an antenna in some way, shape or form. So are you saying that those 54 Million People are wrong . The intent behind the broadcasting law, and i think this started in 1932 or 33, was the spectrum would be granted so that broadcasters would program in Public Interest and convenience. And it was paid for. It was paid for every today by the value of the spectrum, and it is paid for every day by the advertising that those consumers are exposed to, right . So now what the size of the antenna and where its placed shouldnt be a matter of debate. People are, obviously, getting compensated because theres plenty of advertising and, in fact, thats the revenue thats dominant for a lot of these broadcasters as well. The issue really, as far as im concerned, is this industry in genre acts general reacts the same way to every technological innovation that comes around. Were on cspan, and the broadcasters had the same fight with Cable Companies that lasted numbers of years until it became a meaningful business, and now everybodys a great, happy partner. This happened with vcrs when the vcrs first came out, home recording devices. Same dispute, multiple years later many billions of dollars got produced. So this is a default reaction to keep everybody out, stop innovation because fear leads as opposed to opportunity. But Cable Companies have to pay. When Cable Companies originally started and they had Community Antenna television and went around to customers and said we can improve your reception, here install this cable, that lasted for a while, but eventually in the 1992 act, congress changed that, set up a consent regime and even if the Cable Companies want to just take these free broadcast signals off the air, they still have to pay the broadcasters. What makes aereo different . Why are you treated in it seems to me that the Cable Companies are treated unfairly compared to you. Guest i dont think so. I think were treated very unfairly. So you really have to sort of take a look at the whole thing in a grander scope, right . There is a distinction, and this is part of the mission of our company. A distinction, has been since time immemorial on equipment providers and npds or Cable Companies, if you will. The person who makes a tuner, a Television Set, a box, an antenna, doesnt pay retransmission consent because theyre providing equipment to the consumer. Whereas companies that have statutory rights that go along with being able to buy content, being able to force people to sell them content even though they may be competitive they have monopoly rights in markets because they have the rights to Public Access on electric utility poles. I mean, theres a bouquet of rights that come along, and as part of that they have to pay broadcasters. So here is the internet, has no rights. Zero. Absolutely no rights, in fact, severe constraints and threat of the future because we dont know whats going to happen visavis neutrality, we dont know whats going to happen visavis caps, we dont know any of these things. So heres an ecosystem that has absolutely no rights, a tremendous amount of uncertainty, and in comes a company that creates interesting technology, and the idea that you can equate the two is just absolutely incorrect. I think in any rational persons mind equipment providers have never paid retransmission consent. Theyre not subject they dont have the rights and the protections a Cable Company does. So trying to levy that regime on equipment providers just absolutely makes no sense. So whats next after that . Every car radio needs to pay retransmission fees . Is it a taxation scheme that youre really talking about at that point . Host but, chet kanojia, what would be the difference between aereo and, lets say, youtube taking broadcast programs and just putting the whole program right on youtube for people to watch. Guest structurally, technologically theres a huge amount of difference. Number one, the way Aereo Technology works each individual consumer gets their own antenna, gets their own dvr locker. They control the entire experience. We, aereo doesnt take the signal, right . The consumer when they log in, theyre able to tune, pick what they want to do with their antenna separate. Their video experience is absolutely unique and exclusive to them. So, for example, if a bird flew in front of your antenna and it didnt fly in front of your neighbors antenna, your signal would be interrupted versus your neighbors signal would not be interrupted, right . Thats how i look add it is its very discreet, distinct, onetoone relationship. Now, if any other company be decides and builds technology and intellectual property aside that essentially protects that paradigm and says and, in fact, Cable Companies are deploying network dvrs which are exactly the same technology. I think there have been reports comcast is now doing trials in multiple markets and intends to roll that out, cablevision has rolled out a network dvr. Theyre no different. Theyre exactly the same technologies. So somehow the law should apply differently to them and not to us . It just doesnt seem fair. Host where did the name aereo come from . Guest so in india growing up im from india originally, and i immigrate today the u. S. In the early 90s. Antennas are called aereos. It goes back to the old short wave radio. And as i was searching for a name, i thought the idea of combining aereo with a video and making aereo sounded cool. Host whats your background . Guest in which way, do you mean . Host business wise, technology wise. Guest im an engineer by training. And in late 99, early 2000 i started a company which was called navik which pioneered how to collect viewership information from cable boxes. So we used to work with all the major Cable Companies, processed millions and millions of channel changes, utilization and the information was very useful for a variety of purposes, and that Company Became successful and was subsequently acquired by microsoft in 2008 which freed me up a little bit of time after that to focus on the new project which was then i decided to pursue aereo. Host on your web site you have a blog, and its, it talks about all the cities that you are in or coming to, going to, where its available. Atlanta, boston, about 16 cities, correct . Guest right. 32 total that we hope 22 total that we hope to finish by fall. Host and what about washington, d. C. . Guest i believe its on that list, yes. Host whats the reaction from lawmakers and the fcc to your technology . Guest i think we at the moment we focus on education, our goal is to educate people to sort of show them what the capabilities of the technology are. And i think its a tremendously positive reaction that people get. People say, wow, this is cool because it really brings competition and choice into the marketplace which is, obviously, important from a consumers per spect pif. It creates perspective. It creates an alternative way of sort of thinking about, oh, where is the next generation going, how are they going to consume content, what are the modalities, what kind of devices, what kind of technological investments, in particular Cloud Technologies are relevant and important. To continue to foster, you know, a great experience ecosystem. Because you really start hooking at what else looking at what else is happening which is cost of content production is coming down. There is a variety of different sources. Theres a different approach being developed, and whether its youtube or netflix, you know, a number of companies are doing really innovative things. And i think there will be a time where there will be a set of platforms that you can just go to the dial tones of the future where you just go and say this is my live dial tone, i have access to news, to all of the Online Platform<\/a> which is direct to consumers, and people can get access today to live broadcast television along with a dvr on any device without a cable connection just using the internet for the grand old price of 8 a month. Host and this is overtheair broadcast channels that chemocan get through aereo. Guest that is correct. Host what am i holding in my hand here . Guest thats, actually, the key piece of the Aereo Technology<\/a>, thats a microantenna. And think about as how you used to have overtheair antennas in the past, they were large. We miniaturized them, so a lot of sophisticated technology. And the purpose of miniaturizing them so we can build hundreds of thousands of these things into a very small room. And by doing that we can allow a cloudbased implementation of how a consumer can capture the signal which is really the big innovation here because the Cloud Technologies<\/a> allow us to lower the costs down very dramatically, lower barriers to the consumers very significantly because suddenly you dont need boxes, cables or cords, you just go online, sign up and you have access. Thats actually the antenna. Host whats it made out of . Guest copper. Host and thats all it is . Is there a chip . Guest no, thats just the loop, the front end of it, and theres a whole host of technology on a circuit board, and the equipment in its final form looks like telecommunications equipment. Host does this prohide hd provide hd reception . Guest it does, certainly, yes. Host whats the legal status of aereo at this point . I know theres some court cases going on, in fact, one this week was decided. Guest yes. So aereo was challenged by, i forget the amount, but it was, i think, 17 or 20 or 18, somewhere in that range, broadcasters in new york when we announced our intentions to launch the company about a little over a year ago, year and a half ago at this point. And they asked the court for, to stop us as issue an injunction. And we were very fortunate that the court took a really detailed view of the technology. There was a hearing and almost a trial. They concluded that we succeeded on our merits. The technology was going to be lawful and decided not to stop that, so that was a very significant win for the company because it was a threshold issue of whether if our belief in our technology and the analysis we had done was correct. And after that validation we, the plaintiffs appealed that decision in the appellate court, Second Circuit<\/a>, and early april this year we got a decisioning from the appellate court, again, revalidating the trial courts findings that it was a Legal Technology<\/a> and should not be stopped. And, you know, as it happens looking for yet another doover, the portfolios appealed that as well the plaintiffs appealed that as well and requested the entire Circuit Court<\/a> to get together and hear en banc as they call it. Full disclosure, im not a lawyer, but i seem to have picked these terms up these days. And the entire Circuit Panel<\/a> then commented yesterday denying their request. So thats the current status. While the trial continues at the lower court level and its proceedings and discovery and various other things that are going on. Host how many customers does aereo currently have . Guest we have not disclosed our subscriber count. Were a private company. One of the luxuries of being a private company in particular, so on top of that were in litigation, so, obviously, that complicates things further. What we are finding is that as we go to a city, several tens of thousands of people register, preregister to say we like the idea, we understand the concept, we either today use an antenna or we dont have cable tv or variety of other reasons. We use, we understand online video, we use that, and so this makes a lot of sense for us to combine two, three of these alternatives to create a full experience at a price point that seems a little bit more hodge call pause logical because, you know, most of these people most people dont watch hundreds of channels, they tend to watch four, five, seven, ten channels, somewhere in that range, and theres at least some rationality, some logic along with simplicity, variety and other things that are valuable to consumers. Host are there cable channels that are part of aereos service . Guest so we have, were working with loom Bloomberg Television<\/a> as a first partner in this thing, and that seems to very done very well. It sort of coinsides with our view that televisions revolution is going to be called what i call skinny live and deep live libraries. Things that are not time sensitive can be in libraries and, in fact, they are. If you go to netflix be, amazon or any of these online libraries, you have a tremendous amount of content that makes it there. And we think people want live for things that are relevant, unscripted so it tends to be sports news, large reality shows, special events, things of that nature. So as a result we focus on news as a first category that we think we can open this platform up to and allow these consumers to have access to different things. So thats host whats your response when broadcasters say youre stealing their signal . Guest you know, at some point you have to sort of call it what it is, its name calling because when three federal courts express an opinion that it is a Legal Technology<\/a> and its consistent with what congress intended, its difficult for me to sort of look at it any other way except as name calling or mischaracterization. Fact to have matter is that this content is paid for by the consumers in advertising, spectrum that the broadcasters have, and i think its worth clarifying that Aereo Technology<\/a> is only applied to freetoair television, freetoair broadcast not cable content or cable channels. When we look with a cable channel, for example, in many bloombergs case, its a Productive Partnership<\/a> where we enter into a commercial relationship with hem. So its difficult for me to even answer the question why is it stealing when youre required to program to consumers interest. A consumer has a right to an antenna. And whether they buy the antenna from radioshack or from air owe is sort of aereo is sort of not relevant. Weve consistently established a paradigm. The length of the wire that connects your antenna to your dvr and to your Television Set<\/a> isnt a matter of debate, you know . If you live in an Apartment Building<\/a> where you have a 50foot wire versus a 10foot wire, how is that any different . So we think that, you know, thats our response. Host well, we want to bring into the conversation Matt Schwartz<\/a> who is a reporter with Communications Daily<\/a>. Thanks, good to be here. Mr. Kanojia, from the very beginning of your companys existence, aereo have been beset by lawsuits, by the threat of lawsuits. Walk me through your thought process as you decided to start a company knowing that the big broadcasters would immediately attempt to sue you out of existence. Guest well, you know, my hope was and i think when we started, we spent actually a few months Walking Around<\/a> and educating people. And our hope and intent was that as we educate these folks, you y would recognize that some of this innovation, as surprising as it is or unexpected as it is, can be good and, frankly, here was a great example how upstart new Technology Company<\/a> was trying to expand the audience base, build technology that was outside of the restricted sort of cable ecosystem, really innovate around a lot of different areas, user interfaces, cost points, variety of different things. So our goal actually, our hope was that we would educate people, and we understood there would be controversy, but, you know, there was sort of a belief that they would, you know, logic would prevail. The Second Circuit<\/a> sided with your company in april and just refused to hear it again en banc this past week, but one of the judges in the dissent and both of those instances had some pretty or harsh words for you. He calls aereos service a sham or a scam, a, quote, goldberglike contrivance overengineered in an attempt to avoid the overreach of the copyright act. How would you respond to those sorts of accusations . Guest first and foremost, i think its important to note that the company spends a tremendous amount of resource, time and money, to understand the law, try to engineer technology to fit within the law. So i respond to that by saying we, all were doing is we understand the law, we are taking advantage of the guardrails that the law has set up, and the purpose is to build technology that complies within those guardrails. And i think thats a perfectly fine thing to do. Lots of how would you, how would you characterize somebody who looks at the speed limit while driving and sets their car to, essentially, not exceed the speed limit and follow the law . The broadcasters might say to you that while you may be acting within the letter of the copyright law having a specific antenna for each individual customer, by not doing public performances, youre violating the spirit of the copyright law and the Program Producers<\/a> arent getting their fair share of copyright royalties. Guest so, you know, i think we would answer to that in the following way. Number one, today and i think this is the nabs statistic about 54 Million People<\/a> get television over the air using an antenna in some way, shape or form. So are you saying that those 54 Million People<\/a> are wrong . The intent behind the broadcasting law, and i think this started in 1932 or 33, was the spectrum would be granted so that broadcasters would program in Public Interest<\/a> and convenience. And it was paid for. It was paid for every today by the value of the spectrum, and it is paid for every day by the advertising that those consumers are exposed to, right . So now what the size of the antenna and where its placed shouldnt be a matter of debate. People are, obviously, getting compensated because theres plenty of advertising and, in fact, thats the revenue thats dominant for a lot of these broadcasters as well. The issue really, as far as im concerned, is this industry in genre acts general reacts the same way to every technological innovation that comes around. Were on cspan, and the broadcasters had the same fight with Cable Companies<\/a> that lasted numbers of years until it became a meaningful business, and now everybodys a great, happy partner. This happened with vcrs when the vcrs first came out, home recording devices. Same dispute, multiple years later many billions of dollars got produced. So this is a default reaction to keep everybody out, stop innovation because fear leads as opposed to opportunity. But Cable Companies<\/a> have to pay. When Cable Companies<\/a> originally started and they had Community Antenna<\/a> television and went around to customers and said we can improve your reception, here install this cable, that lasted for a while, but eventually in the 1992 act, congress changed that, set up a consent regime and even if the Cable Companies<\/a> want to just take these free broadcast signals off the air, they still have to pay the broadcasters. What makes aereo different . Why are you treated in it seems to me that the Cable Companies<\/a> are treated unfairly compared to you. Guest i dont think so. I think were treated very unfairly. So you really have to sort of take a look at the whole thing in a grander scope, right . There is a distinction, and this is part of the mission of our company. A distinction, has been since time immemorial on equipment providers and npds or Cable Companies<\/a>, if you will. The person who makes a tuner, a Television Set<\/a>, a box, an antenna, doesnt pay retransmission consent because theyre providing equipment to the consumer. Whereas companies that have statutory rights that go along with being able to buy content, being able to force people to sell them content even though they may be competitive they have monopoly rights in markets because they have the rights to Public Access<\/a> on electric utility poles. I mean, theres a bouquet of rights that come along, and as part of that they have to pay broadcasters. So here is the internet, has no rights. Zero. Absolutely no rights, in fact, severe constraints and threat of the future because we dont know whats going to happen visavis neutrality, we dont know whats going to happen visavis caps, we dont know any of these things. So heres an ecosystem that has absolutely no rights, a tremendous amount of uncertainty, and in comes a company that creates interesting technology, and the idea that you can equate the two is just absolutely incorrect. I think in any rational persons mind equipment providers have never paid retransmission consent. Theyre not subject they dont have the rights and the protections a Cable Company<\/a> does. So trying to levy that regime on equipment providers just absolutely makes no sense. So whats next after that . Every car radio needs to pay retransmission fees . Is it a taxation scheme that youre really talking about at that point . Host but, chet kanojia, what would be the difference between aereo and, lets say, youtube taking broadcast programs and just putting the whole program right on youtube for people to watch. Guest structurally, technologically theres a huge amount of difference. Number one, the way Aereo Technology<\/a> works each individual consumer gets their own antenna, gets their own dvr locker. They control the entire experience. We, aereo doesnt take the signal, right . The consumer when they log in, theyre able to tune, pick what they want to do with their antenna separate. Their video experience is absolutely unique and exclusive to them. So, for example, if a bird flew in front of your antenna and it didnt fly in front of your neighbors antenna, your signal would be interrupted versus your neighbors signal would not be interrupted, right . Thats how i look add it is its very discreet, distinct, onetoone relationship. Now, if any other company be decides and builds technology and intellectual property aside that essentially protects that paradigm and says and, in fact, Cable Companies<\/a> are deploying network dvrs which are exactly the same technology. I think there have been reports comcast is now doing trials in multiple markets and intends to roll that out, cablevision has rolled out a network dvr. Theyre no different. Theyre exactly the same technologies. So somehow the law should apply differently to them and not to us . It just doesnt seem fair. Host where did the name aereo come from . Guest so in india growing up im from india originally, and i immigrate today the u. S. In the early 90s. Antennas are called aereos. It goes back to the old short wave radio. And as i was searching for a name, i thought the idea of combining aereo with a video and making aereo sounded cool. Host whats your background . Guest in which way, do you mean . Host business wise, technology wise. Guest im an engineer by training. And in late 99, early 2000 i started a company which was called navik which pioneered how to collect viewership information from cable boxes. So we used to work with all the major Cable Companies<\/a>, processed millions and millions of channel changes, utilization and the information was very useful for a variety of purposes, and that Company Became<\/a> successful and was subsequently acquired by microsoft in 2008 which freed me up a little bit of time after that to focus on the new project which was then i decided to pursue aereo. Host on your web site you have a blog, and its, it talks about all the cities that you are in or coming to, going to, where its available. Atlanta, boston, about 16 cities, correct . Guest right. 32 total that we hope 22 total that we hope to finish by fall. Host and what about washington, d. C. . Guest i believe its on that list, yes. Host whats the reaction from lawmakers and the fcc to your technology . Guest i think we at the moment we focus on education, our goal is to educate people to sort of show them what the capabilities of the technology are. And i think its a tremendously positive reaction that people get. People say, wow, this is cool because it really brings competition and choice into the marketplace which is, obviously, important from a consumers per spect pif. It creates perspective. It creates an alternative way of sort of thinking about, oh, where is the next generation going, how are they going to consume content, what are the modalities, what kind of devices, what kind of technological investments, in particular Cloud Technologies<\/a> are relevant and important. To continue to foster, you know, a great experience ecosystem. Because you really start hooking at what else looking at what else is happening which is cost of content production is coming down. There is a variety of different sources. Theres a different approach being developed, and whether its youtube or netflix, you know, a number of companies are doing really innovative things. And i think there will be a time where there will be a set of platforms that you can just go to the dial tones of the future where you just go and say this is my live dial tone, i have access to news, to all of the Relevant Sports<\/a> and things of that nature. And they are rational. They are not you have to pay 300 a month and whether you like it or not, thats the only option that you have. Host Matt Schwartz<\/a>. Sir, some if the courts find that this is not a violation of the copyright act, if your business is allowed to proceed, surely others are going to get on this. Theres going to be a lot of competition in this area. Time warner cable, its already been be reported to be considering doing Something Like<\/a> this, taking broadcast signals and put them on their internet streams in order to avoid paying retransmission fees. Some companies, some broadcast companies have threatened to take their programming off the air so that you dont have access to it. What does the future of the Television Industry<\/a> look like where the copyright act doesnt quite fit or where there is confusion over how to apply it . Guest i think it fits. I think theres absolutely Crystal Clear<\/a> today, and again, people should this is an important point, and i really would hope the press is diligent in really educating people that there is a distinction between broadcast which is supposed to be free to you as a consumer and other copyrighted content that youre required to pay for separately. Theres a huge distinction. People essentially put a whole wrapper, well, if aereos successful, we are not going to get paid or aereo doesnt support that which is absolutely incorrect and wrong. The idea that a Technology Allows<\/a> you to access what you have today access to, that is not going to change the industry of television or what the evolutions going to look like. Its going to and i think, again, a very naive perspective that if somebody says, well, Time Warner Cable<\/a> can do this, you have to take a step back and look at the reality of the situation. All Cable Companies<\/a> today are buying programming from consolidated media companies. So its not a single broadcaster. Its a broadcaster that owns a variety of cable channels that go along with that. And our contention is that until the ecosystem moves towards individualized choice, you are really not going to see any proliferation of these kinds of technologies that these people are talking, reporting in press. So i think a lot of these are empty hyperbole arguments that people use in the press and really there should be a distinction drawn between the source, the type, the nature of the industry. To answer your question on people going away from the broadcast situation, again, you know, i think of that as irrational and saber rattling from a set of people who are not interested in innovation. The reality of the matter is 50 plus according to the nab, are using an antenna in some way, shape or form. If antennas are that bad for you, if idea a consumer can pick up video using an antenna is that bad, you should have already left the broadcast system. How is it that people can do that, and there is no harm, lifes going great, and a little company, aereo, is suddenly going to mean the death of you . The reality is theres been an agenda behind this historically and, in fact, this was, this has been part of the issue that they would rather just be cable. And just, essentially, have the protected dual revenue stream. The problem with that is the intent in congress granting the spectrum was public convenience. The right for people to be able to get this programming for free using a technology is important. That was the basis of the spectrum grant. And that needs to be protected. And i have a very difficult time believing that lawmakers are going to sit idle while this develops and as it happens that people are going to be able to, consumers are not going to be able to have access to broadcast tv. I dont think thats in the future of the united states. And they may not sit idle, but they may target Companies Like<\/a> aereo. I think there is a desire to support innovation. I think there is a desire to create competition. I think there is a desire to have choice. And i have a very naive immigrants point of view which says thats the u. S. System. How could it not be the u. S. System that new things come in and make progress . Host mr. Kanojia, what does it cost an aereo service . To the consumer . Guest about 8 a month. There are two different plans, 8 or 12. Host and for that 8 or 12, what does one get . Guest for 8 you get a single antenna with 20 hours of storage for your recordings host and you can watch that on your ipad, phone or home . Guest any device or application that we dont charge for, outlets, if you do. And for 12 you get the ability to do that with two antennas and 60 hours of storage. Host so can somebody be in their car traveling across country and watch a continuous to program or not . Guest so aereos a geolocked technology is probably a good way to describe it. We protect the idea that a local broadcast is local. So when you exit its constrained to your home market. Host where did your funding come from for this company . Guest were a private company, so we are venture financed, if you will, is a good way to describe it. Host and Barry Dillers<\/a> one of your financiers . Guest i see the company that hes chairman of is an investor. Host so in ten years from there now well, first of all, whos your competition today and with google possibly getting into tv and apple and sony, etc. , etc. , is that your competition . Guest i think it all remains to be seen how this is going to develop. I think these are very early days. I think consumers, theres not going to be a single one dominant mare. I think theres going to be a fracturing of some sort. But i think its certainly going to be online. And i think its certainly going to be decoupled, meaning the technology, the experience is going to be decoupled from an ownership perspective with the content which is the opposite of what it is today. Its a highly integrated stack as a result. If you wanted as a new company to provide user interfaces or search, for example, you cant get into the game. So we think its definitely going to be online. We think its definitely going to be dominated by people that provide interesting user experiences in technologies, and we think more rationalized packages or disaggregation is ultimately inevitable just because the way the system is set up today its, its out of control. And i think the prices the way they are escalating versus how peoples ability to pay for it or how their usage habits are changing, youre seeing that in young consumers the average age, i think median age used to be 21, cable today is 29 or 30. Thats a trend that should not be ignored that the market is evolving away from the conventional model thats been there. And i think the companies that are able to create how these Consumers Want<\/a> to consume and create that ecosystem are the ones that i think are going to be dominant and winning. Host Matt Schwartz<\/a>, we have one minute. All right. One minute. How is aereo any more legal than people who use peertopeer filesharing software to record a broadcast show and make that available . Isnt aereo just in a way, in essence, to monetize and automate peertopeer file sharing . Guest so i cant comment on the legal aspects of any of those things not being a lawyer. I dont think ive ever thought about the distinction. Be i think there is individual users creating individual copies using individual antennas, then i think theyre similar. But i dont think peertopeer does that. I think its not individual antennas by individual consumers making those copies, so i think theyre very technologically distinct. I dont know the legal implications of that. Host and weve been talking with chet kanojia, ceo and founder of aereo. Matt schwartz of Communications Daily<\/a> has been our guest reporter. Gentlemen, thank you. Guest thank you. Thank you. Just ahead, House Armed Services<\/a> Committee Ranking<\/a> member adam smith talks about the relationship between foreign assistance and national security. Then a discussion about immigration initiatives to empower immigrant communities in metropolitan areas of the u. S. After that, health care analysts talk about proposals to lower medicare costs by restructuring the programs costsharing components. And later former president jimmy carter speaks to the Carnegie Endowment<\/a> in washington, d. C. About the israeli pal stun yang conflict Palestinian Conflict<\/a> and middle east security. 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