• by Wendy Davis , Staff Writer, April 22, 2014

The Supreme Court today didn't seem particularly concerned with the fate of Aereo, a startup backed by Barry Diller that allows people to stream over-the-air television to iPhones and other devices.

But the justices appeared keenly aware that any ruling against Aereo could also pose a risk to cloud services like Dropbox. That's because the broadcasters contend that Aereo is “publicly performing” television shows when it streams them from its antenna farms to users' computers. But if the act of streaming a program is a public performance, then cloud storage systems -- which also stream content from remote lockers to people's computers -- also arguably engage in performances.

The Obama administration, which weighed in against Aereo, says that cloud services are different from Aereo because users themselves place content in the cloud. The DOJ argued in its papers that cloud-computing services merely “offer consumers more numerous and convenient means of playing back copies that the consumers have already lawfully acquired.”

Paul Stewart, who argued for the DOJ today, reiterated that point. “If you have a cloud locker service, somebody has bought a digital copy of a song or a movie from some other source, stores it in a locker and asks that it be streamed back, the cloud locker and storage service is not providing the content. It's providing a mechanism for watching it.”

But Aereo's lawyer, David Frederick, pointed out that not all content in digital storage systems has been purchased. “The cloud provider can't tell what is legal or what is not legal. Some stuff could be up there pirated. Some stuff could be up there perfectly licensed. ... That's why the cloud industry is very concerned that if you have too expansive an interpretation of ... the public performance right, you are consigning them to potentially ruinous liability.”

Justice Stephen Breyer indicated several times that a ruling that Aereo publicly performs programs could have unforeseen consequences that no one wants. He said that he doesn't understand how the decision will affect other technologies. “I've read the briefs fairly carefully, and I'm still uncertain that I understand it well enough,” he said.

At the same time, several judges seemed troubled that Aereo apparently engineered its system to take advantage of a perceived loophole in the copyright law. Aereo uses thousands of tiny antennas to capture television programs, and then streams them to users. The company says at its performances are private because they're made on an antenna-to-user basis.

Justice Ruth Bader Ginsburg asked Aereo whether there was any “technically sound reason to use these multiple antennas.”

Chief Justice John Roberts pressed the point, saying the system appeared designed solely to avoid copyright infringement -- but he added that doing so wasn't necessarily problematic. “I'm just saying your technological model is based solely on circumventing legal prohibitions that you don't want to comply with, which is fine. I mean, that's -- you know, lawyers do that,” he said.

Toward the end of the hearing, Justice Sonia Sotomayor asked the broadcasters' attorney, Paul Clement, what would happen to Aereo if it lost this battle. “If they actually provide something that is a net benefit technologically, there's no reason people won't license them content,” he replied. “But on the other hand, if all they have is a gimmick, then they probably will go out of business and nobody should cry a tear over that.”