Supreme Court Says Aereo Infringes TV Broadcasters' Copyright

Siding with television broadcasters, the U.S. Supreme Court today ruled that the online video service Aereo infringes copyright by streaming live television programs to its subscribers' smartphones and tablets.

The 6-3 ruling, which reverses a pro-Aereo decision by the 2nd Circuit Court of Appeals, likely will force the Barry Diller-backed cord-cutting service to either shut down or significantly revamp its business model.

The dispute between the broadcasters and Aereo dates to 2012, when the start-up launched in New York City. A coalition of broadcast networks promptly sued the company, arguing that it infringed copyright by “publicly performing” television shows without a license.

Aereo countered that its performances were “private” -- and therefore didn't require licenses -- due to the company's technology. Aereo uses dime-size antennas to capture programs and stream them on an antenna-to-user basis. The start-up said that the one-to-one nature of the streams meant they weren't public.

The Supreme Court disagreed with Aereo, ruling today that its “behind-the-scenes” architecture was irrelevant to the legal question. “Why would a subscriber who wishes to watch a television show care much whether images and sounds are delivered to his screen via a large multi-subscriber antenna or one small dedicated antenna?” wrote Justice Stephen Breyer for the majority.

“When an entity communicates the same contemporaneously perceptible images and sounds to multiple people, it transmits a performance to them regardless of the number of discrete communications it makes.”

Breyer also wrote that Aereo's service was similar to that offered more than 40 years ago, by the original “community antenna TV” companies. Those companies -- which set up antennas on hills and then carried the signals into subscribers' homes via coaxial cable -- originally offered people better reception than they could get with rabbit ears.

When the broadcasters challenged those companies in court, the Supreme Court sided with CATV providers. Congress responded by rewriting the copyright law in 1976, to make clear that CATV companies can't transmit programs without licenses.

Breyer said in his opinion that Aereo offers the same type of service that Congress aimed to address with its 1976 changes. “Having considered the details of Aereo’s practices, we find them highly similar to those of the CATV systems,” he wrote. “And those are activities that the 1976 amendments sought to bring within the scope of the Copyright Act.”

It's not clear yet what Aereo's next step is, but industry observers doubt it will be able to continue with its current business plan.

“Aereo's out of business. All of the Aereo copycats need to find something else to copy,” says University of Maryland law professor James Grimmelmann, who has followed the case closely.

One Aereo copycat, FilmOn X, backed by billionaire Alki David, was largely shut down by the courts before today's decision.

Aereo CEO and founder Chet Kanojia called today's decision “a massive setback for the American consumer.”
He added: “We are disappointed in the outcome, but our work is not done. We will continue to fight for our consumers and fight to create innovative technologies that have a meaningful and positive impact on our world.”

It's also not yet clear what the decision means for cloud computing services. A host of outside technology companies had expressed concern that an anti-Aereo ruling could pose a risk to digital storage lockers, which allow stream content from remote lockers to people's computers.

Breyer largely sidesteps those issues in the opinion, writing that the court isn't now addressing how the copyright law “will apply to technologies not before us.” He specifically adds that the court isn't considering whether remote storage systems infringe copyright.

Some legal experts say that language could protect cloud computing services from copyright infringement liability. “The impact on the cloud computing industry is overblown,” says Andrew Goldstein, a media and entertainment attorney with Freeborn & Peters. “The Supreme Court's majority opinion did as good a job as it could in trying to emphasize that this was a narrow, limited opinion.”

But Grimmelmann isn't convinced. “We're going to have some uncertainty for consumer electronics and cloud service providers,” he says.
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7 comments about "Supreme Court Says Aereo Infringes TV Broadcasters' Copyright".
  1. Douglas Ferguson from College of Charleston , June 25, 2014 at 2:52 p.m.
    So if "looks like cable TV" -- even though it is not -- then it is the same as cable TV. Interesting (simple-minded) interpretation. I think the justices underthought the issues.
  2. J S from Ideal Living Media , June 25, 2014 at 4:30 p.m.
    You're right, Douglas. I suspect the Court just didn't understand what they were considering, other than who was the wealthier party (which they specifically note). Wondering now if Aereo will act as an outsourcer for broadcast stations, charging to carry them online 24/7? Or make deals for retransmission of the local stations? Or make deals with "cable" channels? They could increase their subscribers, especially with broadcast stations getting weaker year after year.
  3. Chuck Lantz from 2007ac.com, 2013ac.com network , June 25, 2014 at 5:29 p.m.
    I think JS and Douglas hit it on the head with their comments: "I think the justices underthought the issues." and "especially with broadcast stations getting weaker year after year." The ultimate result of the decision is that fewer people will be watching what the networks, and their sponsors, provide. How can that possibly be good for anyone? As long as Aereo didn't change the programming in any way, especially by adding or deleting the existing content and ads, where is the harm? And despite the USSC claiming the decision is narrow, will it eventually have any effect on Hulu, Slingbox and other systems that are essentially retransmissions?
  4. Doug Garnett from Atomic Direct , June 26, 2014 at 9:39 p.m.
    I'm pleased to see a unanimous decision affirming the idea that copyright matters and that merely because it's possible to steal something easily using digital means that the stealing is still not allowed. Any other decision has a tremendously negative effects on the economy - in areas reaching much further than cable or broadcast TV.
  5. Edmund Singleton from Winstion Communications , June 27, 2014 at 6:12 a.m.
    We the people allow the broadcasters to broadcast in the public air ways and make big bucks while we the people get what?
  6. Bob Gordon from The Auto Channel , June 29, 2014 at 4:03 p.m.
    I believe that if you want to own and operate a broadcast station using public airwaves you should have to live in the coverage area... broadcasters need to have local responsibility... thank your FCC for screwing up what was once the best broadcast system in the world... with unlimited ownership comes unlimited negation of local responsibility...when the owner of the local station is seen around town they have to be reactive to local needs... when they live away so does their responsiveness...
  7. Edmund Singleton from Winstion Communications , June 30, 2014 at 6:44 a.m.
    I am doing just what Aereo did in part, I purchased an HDTV recorder from Amazon just for local stations...