‘We’re not going to sit idly by and let people steal our content,’ Chasey Carey said. | REUTERS News Corp. threat: Charging for Fox

LAS VEGAS — In an Armageddon-like declaration that could unravel network TV, a top News Corp. executive said Fox could become a subscription service if courts don’t put a halt to the retransmission of its shows for free.

Chase Carey, News Corp.’s president and chief operating officer, rattled an opening day audience at the National Association of Broadcasters already nervous about what the advances of mobile and subscription content mean for the industry’s future.


At issue is a federal court decision last week not to impose an injunction against Barry Diller’s Aereo, a service that provides broadcast TV streaming through its devices. The company argues that it doesn’t have to pay retransmission fees because it provides small antennas to its users, but Fox — along with CBS, NBC and Disney — insists the antennas are a ruse to conform with a legal loophole.

NAB CEO Gordon Smith, who had already invoked jitters about Aereo a few times before his question-and-answer session with Carey, asked once again and received a startling answer.

“If we can’t have our rights properly protected through legal and governmental solutions, we will pursue a business solution,” Carey said. “One solution would be to take the network and make it a subscription service. We’re not going to sit idly by and let people steal our content.”

Aereo's CEO and founder, Chet Kanojia, told POLITICO that Carey and other broadcasters were thinking about the service all wrong.

"What effectively they are saying is you can't have your antenna," he said in an interview. "They are saying I got the spectrum for free. I made billions of dollars off of it. Now I want your revenue stream."

Kanojia contends that for broadcasters to take his signal off the air would abrogate the social contract that is the basis of the legal regime that gives the broadcast industry special status.

"The deal with Congress was, I'm going to program in the public interest and convenience, free to air," he said. "That doesn't apply anymore."

While Carey was speaking in Las Vegas, News Corp. also released a statement on the Aereo matter: “We are committed to broadcasting under a business model where programmers receive fair compensation from parties that want to redistribute our product while continuing to make our product available for free to individual consumers that want to access our signal. We believe that 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.”

Carey’s was a bold remark, but executives from other networks have been suggesting the prospect in private conversations with regulators and congressional staffers.

Such a move would unravel the network-affiliate relationships that are the bedrock of free broadcast television. Affiliates wouldn’t have exclusive content upon which to build their brand identities and the networks would have to find ways to replace billions in retransmission fees and ad revenues.

“It would be a total disaster for the affiliates,” said Matthew Berry, chief of staff to FCC Commissioner Ajit Pai. “I guess they would just put their original content on FX or some cable station, something like that. It would be very bad for everyone.”

Within a half-hour of Carey’s comments, panelists at a session on Congress’s legislative agenda were being asked about the issue. None of those on the panel were aware of what the questioner was asking.

NAB spokesman Dennis Wharton sought to soothe fears.

“We believe broadcasters are going to prevail in the Aereo case, so we won’t have to see Fox do this,” Wharton said. “The courts will find Aereo to be copyright infringers, which will make the comment moot.”

Kanojia said that if current broadcasters give up their licenses to operate, then someone else will step in.

"I think broadcasting is a very important component in this country and isn't going away," he said. "Somebody else will be a broadcaster. It still is what generates mass audiences, and that's what people watch."

POLITICO is an affiliate of Allbritton Communications Company, which is an active member of the National Association of Broadcasters.

Brooks Boliek contributed to this story.

This article first appeared on POLITICO Pro at 5:36 p.m. on April 8, 2013.