In Aereo Internet TV case, U.S. Supreme Court justices show concern

“Grappling with fast-changing technology, Supreme Court justices debated Tuesday whether they can protect the copyrights of TV broadcasters to the shows they send out without strangling innovations in the use of the internet,” Mark Sherman reports for The Associated Press. “The high court heard arguments in a dispute between television broadcasters and Aereo Inc., which takes free television signals from the airwaves and charges subscribers to watch the programs on laptop computers, smartphones and even their large-screen televisions. The case has the potential to bring big changes to the television industry.”

“But several justices expressed concern that a ruling for the broadcasters could hamper the burgeoning world of cloud computing, which gives users access to a vast online computer network that stores and processes information,” Sherman reports. “Paul Clement, representing the broadcasters, tried to assure the court it could draw an appropriate line between Aereo’s service and cloud computing generally. People who merely retrieve what they have stored should have no reason to worry, Clement said.”

“But David Frederick, representing Aereo, said the ‘cloud computing industry is freaked out about the case’ because it sees its $10 billion investment at risk if the court were to hold that anytime music or an image is stored online and then retrieved, the copyright law would be implicated,” Sherman reports. “In each market, Aereo has a data center with thousands of dime-size antennas. When a subscriber wants to watch a show live or record it, the company temporarily assigns the customer an antenna and transmits the program over the Internet to the subscriber’s laptop, tablet, smartphone or even a big-screen TV with a Roku or Apple TV streaming device. The antenna is only used by one subscriber at a time, and Aereo says that’s much like the situation at home, where a viewer uses a personal antenna to watch over-the-air broadcasts for free.”

Read more in the full article here.

Related articles:
TV’s future is about to be decided by U.S. Supreme Court – April 17, 2014
US federal court suspends Aereo internet TV service in several states – February 20, 2014
By putting over-the-air online legally, Aereo clears the way for all TV everywhere – April 10, 2013
Apple is a winner in the Aereo online TV ruling, for now – July 12, 2012

32 Comments

  1. Although I so not use Aereo, I side with Aereo on this. Not only because they match up one antenna to one user but also because the broadcasts are transmitted over the air, not over private connections, but connections anyone can use without any special technology.

    They are not charging for the programming, they are charging for the medium upon which the signals are being relayed. This model does not steal revenue from the broadcasters because the revenue is not built upon a subscription model. Broadcaster revenue is ad based, and if those ads are still being shown to consumers, the net difference is nil.

    What’s next? Are producers of antennas going to have to pay broadcasters a royalty or monthly fee consumers using their antenna? Maybe the coax cable is the medium used to deliver the content so the coaxial cable manufacturers should be sued too.

    1. I agree with most of your points. The broadcasters are fighting because they can’t determine (increase) advertising rates based on over the air subscriber counts. Long term this can have a huge impact on their revenue.

      1. Since they do not have accurate counts of who watches over the air tv, you think it would be in Aereo’s favor to come up with a subscriber count and/or program tracking so it can sell that to the broadcasters so they can get a better picture about who’s watching what.
        The previous model was based on in inaccuracy of the “Nielsen” ratings which were subject to lies and manipulation. If Aereo sold or bartered this info back to them, I wonder if they could settle the case.. Too late now of course, but still

  2. I also side with Aereo. It’s a slam dunk rationally. It bothers me that the Supremes are so easily confused with a lot of technobabble and I hope that someone can explain to them simply that with Aereo, no content has been stolen or compromised. I am free to buy an antennae and stick it on top of my television, why can I not buy an antennae and stick it anywhere I want. The signal is free.

    I think it was Ruth Bader Ginsburg who said to Aereo, “Everyone else is paying for this, why shouldn’t you?” Which is not true at all. No one who puts up an antennae is paying.

    What people are paying for is a bit of space to house their antenna. You still have to watch the commercials.

    What this is all about really is that the content providers are able to charge the cable providers up the ying yang to re-broadcast their content. If Aereo succeeds, that money is in danger, to say the least, and cord cutters have all the more reason to drop cable.

    1. I am in agreement with you, Thelonious. But keep in mind that many Supreme Court decisions are based not so much on the details of the case at hand, but on the larger, more broad constitutional issues relating to the specific case and case law. It’s important to distinguish between the two, and understand the broader issues that a decision by the Supreme Court could affect. While the Surpremes (especially that ever-pesky Diana Ross – just kidding) could determine their opinion on narrow grounds, don’t be surprised if the resulting opinion in June is likely based on broader legal matters. When Chief Justice Roberts ruled in favor of upholding the Affordable Care Act, his deciding opinion was something of a surprise, focusing on a legal matter that few expected.

      So to assume that today’s arguments and case specifics will determine the direct of the Court, that might not necessarily be so. The Betamax case touched on similar ground between content holders and technology, as several other cases have as well. Neither the media nor us railbirds may be thinking through the potential legal and constitutional consequences of a decision either way, and viewed in that manner we could be in for a surprise regardless of how the final decision turns out.

      It’s the bigger constitutional picture that may drive the Court more than the specifics of this case.

      Most interesting. Stay tuned.

    2. At its core, Aereo’s service is no different than if I charged my neighbors down the hill from my house to use an extra TV antenna I installed by my house (atthe top of the hill). They get service they couldn’t otherwise get, I make money for providing the ACCESS to a service that was otherwise free. I’m charging for the use of my antenna, nothing more.

      In my example (as well as the case), the customer can’t get the service from their location, and Aereo is simply hooking them up.

  3. The real problem here is the little antennas do nothing. Semantically it’s the same. But what a true end user needs to do, is buy and attach an antenna, appropriate for their home, then have an internet pipe, hardware and software, unshareable, for the Free To Air and remote TIVO experience to be legitimate. What Aero is doing is broadcasting content under the guise of personal use, which is not possible. There can’t be a service provider between your stored content and your Internet connected device, other than the data pipe itself.

    1. Yeah, that’s what has me worried. I don’t think Aereo can claim they’re not retransmitting when the signal from the antenna goes on a shared line (the internet) to your home. You’re renting your own antenna, and you’re renting your own DVR, but you’re not renting your own transmission medium. I’m pretty sure that could be construed as retransmission.

      But I want Aereo to win really bad, so I hope I’m wrong.

      ——RM

    2. They are *transmitting* but they are certainly not *broadcasting*.

      The data is received by an antenna leased by a single customer, and transmitted to a single customer. The fact that they are operating this at scale (many single antennas to many single users) does not make it broadcasting in any sense of the word. Therefore it cannot be a “public performance” of copyrighted material.

      It is a private transmission for personal use only.

      Can the Supreme Court decide that you are not allowed to lease an antenna or rent the use of one, but must buy one instead?

      Can the Supreme Court rule on the allowable “length of the wire” from your “antenna” to your “television”? Must you locate it physically on your own home?

      1. No, they most certainly are ‘broadcasting’ in the technical term (not the layman’s idea of ‘broadcast’ being a TV show….or a woman’s shadow), which is ‘transmitting a TV or radio show’.

        You are also not using ‘public performance’ in the sense that has been defined by Congress, SCOTUS and FCC for well over 70 years.

        Look, it is easy for all of us to see how we might benefit from Aereo (I would FINALLY get PBS OTA!) but broadcasters are not in the business of doing things for us anymore than you go to work to make money for others. You do it for yourself, your spouse, your kids. Your employers benefit (hopefully) as do their customers, but unless you work for free at a charity, you demand compensation.

        Broadcasters are no different, no matter how bad you want to rationalize why you personally should be able to benefit from their loss. That’s not Capitalism not Free Enterprise.

        Think of your likeness. If Anelina Jolie is in the middle of a model shoot and you pull out your, uh, point and shoot, why shouldn’t you be able to sell that likeness and profit? She is already making money from the ‘professional’ photographer, and you haven’t taken away from her beauty, just made her appearance available to more people. That’s what she wants anyhow….right?

        No. What you are doing is diluting that value, same as Aereo. Local broadcasters no longer get the large money from advertisers, so they need retransmission fees to compensate (although not in all markets), but Aereo is undermining that by re-selling (without paying) what the broadcasters have already invested in. This will lead to others (cable and satellite) to get out of retransmit fees. Great! Huh?….No. Eventual loss of broadcasters. what will Aereo sell then….?

        Will they then do this with books? Music?
        What’s the difference?

        I expect this attitude of entitlement from some, but I am a little disheartened to see it from my conservative friends here.

        1. Well of course everyone wants to be paid for their work…. and they ARE. The commercials that are inserted by the national networks are intact… and the commercials inserted by the local affiliates are also intact when the viewer sees the show.

          So, Sorry, but your argument doesn’t hold water… at least with me. That’s like saying that if you have 100 people over for a party to watch something on OTA TV, that you should pay for that, than if you just have, say, one or two people watching. Regardless of how many people are watching your TV, it has a zero effect on the money raised from advertising from either the network or the affiliate.

          Money for these shows is generated by both the commercials from the networks and the affiliates. Neither are loosing any money because of Aero.. Nothing Aero does dilutes this. And in fact, I could EASILY make the argument that they make MORE money from Aero because MORE people get to see the programs they broadcast..

          1. You could make that argument and you would be wrong.
            What newspapers have already suffered local broadcasters are getting a taste of, and that is curtailed ad budgets. It doesn’t matter how many papers you ‘sell’ if the car dealers and boutiques stores don’t have the money to place high-dollar ads, so the result is you lower the ad rates. Same for local TV.

            Both of these markets have less ad revenue and ‘viewers/subscribers’, which is a nasty combination causing locals to need more money.

            So, when you say Aereo is giving them more viewership, they may add a small percent, but the larger number will be lost revenue when cable and satellite use this same tactic to get around retransmission fees.

            Don’t believe me? Just ask someone in the business.

          2. also-
            “That’s like saying that if you have 100 people over for a party to watch something on OTA TV, that you should pay for that”

            If it is a business, you DO have to pay, because you are technically making money off that ‘rebroadcast’.

            Here is a fun fact, if you have a Super Bowl party at your house, and charge people a small amount for all the wings and kegs, the NFL wants their cut. Give beer and food to friends, no issue. Look it up.

        2. Firstly, “broadcasting” = “broad” “casting” (one to many).

          And secondly, your argument sounds like you’re simply defending an existing business model. “Diluting that value”. “Undermining” re-transmission fees. That’s not a legal argument.

          If it turns out an individual has the right to contract to a third-party their receipt of a free over-the-air broadcast and then have that material privately transferred to them over the internet (similar to the rights affirmed in the 2008 Cablevision decision), then the old business models may very well be obsolete.

          Court rulings do change the landscape.

          1. I am defending it, because it is needed.
            Actually, the company I work for would benefit greatly in an Aereo victory, and I would also get some channels at home that I can’t pickup OTA. That doesn’t make it right.

            Also, keep in mind that in the 2008 Cablevision agreement, Cablevision can be required by the broadcaster to pay retrains fees to have their channel carried in the first place. Aereo doesn’t do that.

      2. Do the antennas truly, verifiably work or is it a symbolic gesture of an antenna? That’s the core of the issue. No lies, they have to be an ISP, leasing individually working components that actually work, a straight non-shareable line from the broadcasting station over the air to the storage locker, where the end user can pickup their content at any time. If they are crossing the lines, recording all the content once, de-duplicating counts, and sharing it out to individuals with common interests, then they are a rebroadcasting.

  4. Everyone should understand: For the broadcasters, this isn’t about Aereo. They could care less about whether this little outfit pays them a few bucks. No, what has them freaked out is that a ruling in favor of Aereo could mean the end of retransmission fees altogether.

    Think about it. If Aereo’s system is a valid workaround of the retransmission law, what is to stop Time Warner Cable from installing one of these antenna arrays at each hub and including an antenna rental as part of each subscriber’s fee? Voila! For the price of the initial hardware investment, no retransmission fees ever have to be paid again.

    (In reality, it’s more likely that the cable companies would use the threat of this “nuclear option” to negotiate much smaller fees, rather than immediately build the antenna arrays, but either way, the broadcasters are out a ton of bucks.)

    Supreme Courts in general, and this one in particular, don’t like issuing decisions that massively change the business status quo, so expect a weaselly, nitpicky, overly specific decision that will attempt as much as possible to keep both retransmission fees and cloud computing untouched. I personally think Aereo is toast, but I’m rooting for them hard.

    ——RM

      1. I honestly don’t think the interests of small broadcasters (do those really even exist anymore?) are in any danger here. They don’t command big fees from cable companies anyway. They survive via advertising, so the more eyeballs on their ads, the better.

        ——RM

        1. Depends on how you define ‘small’.

          Broadcasters have ‘areas of domain’ that allow them to be the sole supplier of a network (like a franchise). Towns that fall outside any of these areas from adjoining cities can elect to carry channels from as many as they want provided they get the right. Some channels require them to pay, some don’t.

          A city in the 100,000 population range may have several towns with 10-50,000 residents nearby, greatly expanding the broadcasters viewership.

  5. This is one of the most obvious and hilarious cases I’ve heard come before the Supreme Court. It doesn’t belong there. Aereo has NO legal reason for existing. They’ll lose, like DUH, and this case will do NOTHING AT ALL to change television. It’s that irrelevant and plain old criminal.

    1. Don’t be so sure.

      The broadcasters are voluntarily transmitting their programming into the public airwaves for all to receive.

      Aereo is allowing you to receive the signals by leasing you their hardware, and are privately transferring them to you for your personal use.

      You can receive the transmission and watch it on your own TV.
      You can record it for your own personal use.
      Can you mount an antenna on your neighbour’s roof?
      Can a cable company offer you a cloud-based PVR service?

      1. I don’t have any problem with Aereo ‘leasing’ equipment. But they, as a company, have not a hope of convincing anyone they have a right to the media being transferred over the airwaves and charging for the service. Never going to happen. It’s blatant copyright violation and crime. They own none of the content and can’t touch it.

        Required: A license for the content by Aereo. There is none. This verdict is trivial. It should never have gone to the Supreme Court.

        And yes, I’ve thrashed through ever contorted argument Aereo attempts to foist. None of them have an ounce of credibility.

      2. Well, no, they are not voluntarily broadcasting- that is a required mandate with their license from the FCC. The public must have access to broadcasts OTA, and, these days, those broadcasts must be digital and in HD. It’s often better to use a local antenna rather than a cable feed for normal channels.

        1. The content is most certainly being VOLUNTARILY transmitted over the public airwaves. Nothing forces a content creator to do so. You can shoot a video and never broadcast it. A production company can produce a television series and never choose to broadcast it over the air. (Look at HBO).

          These content creators have decided to make their product available to everyone over the public airwaves. That means they accept the legal requirement that everyone is allowed to receive it for free (even Aereo).

          We know that a cloud-based service is allowed to record copyrighted television content for you, and transmit it to you over the internet (as per the 2008 Cablevision decision).

          Is it that big a leap to say that Aereo can’t do the same?

  6. All commercials are via product placement within televised programming.
    Air waves are now available for sale from FCC for higher speed WIFI + USA wide WIFI Internet access.

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