Aereo Case Pits Tiny Antennas Against Broadcast and Studio Giants

AereoThe Aereo case argued before the Supreme Court this week pits thousands of tiny antennas against broadcast and studio giants, such as Fox Broadcasting, Twentieth Century Fox, Univision and PBS. Aereo, Inc., which offers a fee service in which subscribers received cloud stored free network programs via individual antennas installed in their homes, won at the federal trial court level and an appeal to the second circuit federal appeals court. In essence, the Aereo subscribers make a copy of programming using a small antenna, the copy is stored via cloud technology, and then the customer accesses the stored program via another small antenna.

The federal court of appeals for the second circuit in New York issued their opinion last year and affirmed the trial court decision in favor of Aereo, the defendant in the case. Judge Droney wrote the decision for the second circuit, which decided the case on a two to one vote of the three judge panel. At the appellate level, the court only construes interpretation of the law, it does not retry the facts. The major issue reviewed by the second circuit was whether or not Aereo violated copyright law by publically broadcasting copyrighted content. Aereo says the  public broadcasting doctrine does not apply, because they copy content for a specific end user, instead of the public at large, and then transmit the content only to that specific end user. Accordingly, Aereo pits many tiny antennas in its case against the broadcast and studio giants that dispute its business practices.

Aereo would definitely violate the “public performance” doctrine by saving network broadcasts and then showing them on its own separate network. They assert the right to basically do the same thing on an individualized basis for many users at once. The major difficulty in deciding the correct course of action in the case is that the copyright law in question was enacted in 1976, before any of the technology in question was remotely possible. The court must look at the language of the statute and its legislative history to glean what Congress intended for technology beyond its scope of knowledge, or even imagination, nearly 40 years ago.

The second circuit decided the case last year based on another second circuit decision called Cablevision decided in 2008. The Cablevision decision dealt with DVR technology and the court decided that the cable company offering DVR technology did not need to pay additional licensing fees to copyright owners based on delayed broadcasts to individuals who “saved” a program. A significant difference here, at least to most observers, is that Aereo does not pay licensing fees to anyone. They store free broadcasts for their subscribers. The second circuit felt that whether or not Aereo paid a fee or not was irrelevant to the discussion of what constitutes a public performance for copyright law purposes. Because the programs were stored by individual users and later shown only to them, the broadcasts were not deemed public and did not violate copyright law according to the appellate court. Now, the Supreme Court will decide if the second circuit was correct.  Based on the oral argument discussion, the Supreme Court could determine that payment of some kind of licensing fee is an important distinction from Cablevision.

The Supreme Court’s oral arguments have been closely scrutinized by television industry participants. The US Government, acting through the Solicitor General, argued on behalf of the broadcast and studio interests against Aereo. Justice Ruth Bader Ginsburg took Aereo’s attorneys to task for the apparent free ride given to the company. Justice Stephen Breyer noted the difficulty of deciding a case involving cloud technology, the use and contours of which could change over time. The members of the court appear wary of an overbroad decision one way or the other because of the potential for creating difficulties in the use of emerging technology.

In the Aereo case pitting many tiny antennas against the broadcast and studio giants, the justices’ reluctance to issue an overbroad ruling likely signals a decision on more limited grounds. In this type of case, Congress will need to act at some point to make its intentions clear regarding use of cloud technology to store and rebroadcast copyrighted materials. In the absence of congressional action, the courts have to guess, as best they can, what Congress intended almost 40 years ago. The court could decide the case in the most limited way it can muster in order to prevent an Aereo free ride while protecting burdensome restrictions on use of cloud technology.

By William Costolo

New York Times
Boston Globe

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