Supreme Court

Supreme Court Juggles Copyright Law and Modern Technology in Aereo Case

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The U.S. Supreme Court stepped gingerly into the brave new world of cloud computing and online streaming Tuesday morning when the justices heard oral argument in American Broadcasting Companies, Inc. v. Aereo, a case testing the reach of copyright law in today's hi-tech world.

At issue is whether Aereo, a New York-based company whose tagline reads, "Watch Live TV Online," is in violation of federal copyright law because it does not pay royalties for the TV broadcasts its service allows paying customers to watch on their smart-phones, tablets, and computers.

"Aereo is an equipment provider," the company's lawyer, David C. Frederick, told the Court. That equipment includes some 10,000 dime-sized antennas in the company's Brooklyn facility. Those antennas, Aereo says, operate just like the old-fashioned antennas that were once commonly affixed to TV sets. They catch over-the-air broadcasts and allow people to watch those broadcasts on their TVs. According to federal law, the old-fashioned scenario raises no copyright concerns. Aereo maintains that its hi-tech service should be seen as the modern equivalent. "All Aereo is doing is providing antennas and DVRs that enable consumers to do" what the law already allows them to do, Frederick repeatedly stressed during questioning.

But several members of the Court voiced significant doubts about the probity of Aereo's approach. "If every other transmitter does pay a royalty," observed Justice Ruth Bader Ginsburg, "you are the only player so far that doesn't pay any royalties at any stage."

Justice Stephen Breyer amplified that concern. "It looks as if somehow you are escaping a constraint that's imposed upon" cable companies and satellite systems, he told Frederick. Indeed, added Justice Elena Kagan, from the user's standpoint, Aereo is "exactly the same as if I'm watching cable."

But the other side faced sharp questioning as well. Representing ABC and several other media entities in their fight against Aereo was Paul Clement, the former solicitor general and high-profile conservative lawyer. He told the Court that because Aereo is "publicly performing" copyrighted material it must pay the price. "They provide thousands of paying strangers with public performances over the TV, but they [claim] they don't publicly perform at all. It's like magic," he quipped.

Yet Clement's definition of what should count as a "public performance" of copyrighted material plainly troubled several of the justices.

Justice Sonia Sotomayor, for example, worried that "someone who sells coaxial cable to a resident of a building" might be "swept up as a participant in this." They also enable strangers to watch public performances, she implied.

Justice Samuel Alito, who appeared visibly frustrated with Clement's evasive answers at one point, raised a broader concern. "I need to know how far the rationale that you want us to accept will go…what effect it will have on these other technologies," Alito declared.

Foremost among those "other technologies" is what's commonly called "the cloud," a shorthand term for the ability to store and access vast amounts of material online, including copyrighted items such as the digital files for songs and movies.

What if, asked Justice Breyer, an anti-Aereo ruling causes fallout for "other things that really will change life and shouldn't, such as the cloud?"

It's a good question. But judging by Tuesday's closely divided oral argument the Court is still groping its way towards an answer.

A ruling in American Broadcasting Companies, Inc. v. Aereo is expected by June.

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  1. Great. So the Supreme Court is going to rule on technology they don’t understand.

    1. I was reading the SCOTUSBlog recap, and the Court has basically supported the black-letter reading of whatever the copyright statute of the time said. I am hoping this trend will continue as Aereo is clearly designed and executed in such a manner as to be compliant under statute.

      1. You’re an engineer, so I would imagine your guess on this would be pretty good:
        Do you think those 10,000 tiny little antennas are actually used, or is it just a compliance thing? It would make a lot more sense to just get the signal once, and multicast it to all of the subscribers….

        1. I’d bet they are scruplous in dedicating one antenna per customer, because even a hint of otherwise from a disgruntled former employee would destroy the company.

          Whether it is one antenna per reigstered customer, or only one per logged-in customer, I do not know.

          1. If they are doing that, they must have picked a damn good location. I have to use a huge amplified antenna to pick up HDTV, and it has to be angled in different directions to pick up different stations…

        2. Yes they are used. To do otherwise would put them in noncompliance with copyright law.

  2. Technology bad. Established way of doing things good.

  3. I dont understand why an over-the-air broadcast company wouldnt want as many people watching as possible.

    You are giving it away for free, you want people watching it for free, what is the problem?

    1. They get revenue from local ads. A car dealership in New York isn’t to pay extra for commercials that are viewed in Omaha.

      1. Yeah, but Aereo only shows local stations to people who live in that local area. You sign up in NYC, you get NYC stations and NYC ads, etc.

        Actually, some tiny over the air broadcasters filed a brief in favor of Aereo, because they’re so small that they couldn’t extract retransmission fees anyway.

        1. I was unaware of that part. I thought they showed local NYC stations all over the country.

      2. So hotels should have to pay extra because out-of-towners are watching?

        If you know you have a national audience, sell more national ads.

        This doesnt take any dollars out of the stations pocket. Someone watching in Omaha costs them nothing. And for some ads, they can charge more.

        1. I’m guessing that hotels do have to pay extra. They are treated the same as a cable company.

      3. A car dealership in New York isn’t to pay extra for commercials that are viewed in Omaha.

        But the car dealership in New York is only paying for New York, not Omaha. It is pretty interesting technology, but they charge you for it. The content providers want a piece of that revenue.

        1. But ads for a car dealership in New York are of no interest to people watching in Omaha.

          1. But ads for a car dealership in New York are of no interest to people watching in Omaha.

            I was mistaken, they only show networks for the local area. The wife and I looked into it and decided to just go with a ‘mudflap’ antenna for OTA.

        2. It is pretty interesting technology, but they charge you for it.

          I had to pay for my antenna. Did Winegard not pay royaltiezz???!!

        3. The content providers want a piece of that revenue.

          It’s the same as ISPs wanting NetFlix to pay them to carry their traffic?

      4. OTOH – it certainly doesn’t *hurt* the broadcaster.

        Al they’re doing is providing a new way of receiving the same broadcast as OTA.

        And a huge difference between Aereo and cable is that cable inserts local commercials into those re-transmissions.

        1. Al they’re doing is providing a new way of receiving the same broadcast as OTA.

          And allowing you to record it, IIRC.

          1. Yes, but the recording of a broadcast for personal use has been affirmed both locally (Betamax) and offsite (DVR). So that can not be the issue requiring a ruling.

            1. are they changing it at all before sending it along to the end user?

              1. Nope. They are sending down the internet pipe everything received on the antenna you rented, as I understand.

              2. are they changing it at all before sending it along to the end user?

                My understanding is that they simply record the OTA stuff on a DVR that you pay to rent. Then you log in over the internet or device (ROKU) and watch. I don’t see a problem with it from a fair use standpoint.

                Here is their website:

                https://aereo.com/about

            2. are they changing it at all before sending it along to the end user?

    2. Volokh had a post about it. The problem is the law itself, a very convoluted piece of crap, which arbitrarily mandates that the cable companies carry the over-the-air channels and pay rooyalties for the privilege. The broadcasters claim that if Aereo does it for free, customers will ditch the royalty paying cabel companies for the pirate Aereo.

      The problem at heart is the typical statist police power confusion of conflicting and internally inconsistent laws. The proper ruling is to throw the whole thing out and tell Congress to try again (or better yet, don’t try again). But instead they are going to scramble for a very narrow ruling which will change as little as possible, because whatever they decide, no matter how narrow, is going to rewrite a lot of piss poor law.

  4. If every other transmitter does pay a royalty,” observed Justice Ruth Bader Ginsburg, “you are the only player so far that doesn’t pay any royalties at any stage.”

    they don’t make transmitters. they make receivers. and then allow people to access them over the internet. not quite the same thing there ruth.

    1. Well, Ruth, maybe you’d like it if you thought of it as affirmative action for new technology.

      1. But Affirmative action at this point is for that which cannot make it on the merits. That would put Aereo in the same camp as the asian kids.

  5. so is Aereo transmitting or re-transmitting. I’d get it I could rent/buy an antenna out of my local market. basically to get the CBS and Fox broadcasts on Sundays.

  6. Indeed, added Justice Elena Kagan, from the user’s standpoint, Aereo is “exactly the same as if I’m watching cable.”

    Holy shit! This might be the stupidest person to ever sit on the court. The nimrod can’t figure out the difference between OTA television and cable – that puts her IQ south of 85.

    1. It isn’t as stupid as you make it. I beleive the point she was making is that watching your local broadcast stations over Aero seems to be no different than watching your local broadcast stations via cable. Both are getting the signal from the local stations and sending them on to local viewers.

      1. It is as stupid as IF makes it out to be. The end user’s experience simply can’t be relevant to the case. Imagine that, instead of having the array of antennas, Aereo just used one and re-broadcast it to their end users. The users see exactly the same thing, but Aereo is now clearly in violation of the copyright law. To take a more egregious example, say I host a service which uses all of the same equipment on the user end: TV, Roku, Internet connection. But now I host software that scours the Web for a torrent of anything the user wants. The users still see exactly the same thing, but we’re again clearly violating copyright law. A few seconds of thought about this shows that Kagan’s concern about what the user experiences can’t possibly be pertinent to the liability of the provider. It’s terrible legal reasoning.

  7. I dont understand why an over-the-air broadcast company wouldnt want as many people watching as possible.

    You are giving it away for free, you want people watching it for free, what is the problem?

    robc,

    You don’t understand how the station owners think.

    Yes, they do offer the product “over the air” for free.

    But they also SELL the transmission rights to cable operators. That is a relatively new phenomenon, as cable operators were formerly FORCED to carry local OTA channels and the local stations could not charge them for that service in their locale. That changed several years back and now the cable companies are not forced to carry every local station – they typically DO carry them because their customers want them to. And because their customers want them to, the local stations charge the cable operators for the right to transmit.

    This is almost an entirely big-city phenomenon because the local stations are also owned by companies that own cable-only networks – if the Chicago cable companies want to carry ESPN then Disney also charges them to carry WLS-TV because Disney owns that ABC station.

    In a smaller city like Des Moines, Disney doesn’t own the local ABC station so they can’t get any extra money from the cable company; in fact they probably encourage the local ABC affiliate to not charge a carrying fee to Des Moines cable operator(s).

  8. Why isn’t this something congress can choose to regulate. Or not?
    They should flip a coin and invite congress to clarify.

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