If you think your cable bill is too high, you probably don’t want to read this.  The Supreme Court yesterday put a stake in the heart of a start-up that delivered network television on the cheap.  More fairly, the Supreme Court recognized that Congress killed the service – Aereo – well before it got off the ground.  Let’s talk about the decision in Plain English.

This is a copyright case.  If you make a work – including a television show – you can get a copyright.  Federal law provides that no one can “publicly perform” that work unless they pay you.  And the specific provision is very broad:  it applies if the show is transmitted “by means of any device or process” and even if the audience receives it “in separate places” and “at separate times.”

Here is Aereo’s service.  You pay a fee.  In exchange, they send you network television over the Internet.  The fee is small because Aereo’s costs are low.  It doesn’t pay the copyright owners.  Instead, it has thousands of individual antennas, each of which can tune into a particular channel requested by a particular subscriber.  Aereo then saves the subscriber’s program in a separate file.  It sends the data over the Internet.

The service basically caused the broadcast networks and cable companies to lose their minds.  The networks spend tens of millions of dollars developing their programs.  The cable companies spend tens of millions of dollars paying the networks to distribute those programs.  If companies like Aereo could do the same for free, then – the broadcasters and cable companies said – the whole industry could fall apart.

Today, the Supreme Court declared Aereo illegal by a vote of six to three.  Justice Breyer’s majority opinion recognized that Congress adopted the “public performance” statute to subject entities that essentially function as cable companies to the copyright laws.  The Court recognized that Aereo sends only a single copy out to each subscriber, whereas a cable company sends out one stream to all of its subscribers.  But that technical distinction, it decided, made no substantive difference under the law.

Aereo had argued hard that a ruling that its service is illegal would create serious legal doubts about other technologies, especially cloud computing.  But the Supreme Court can wave legal problems away and it did with this one.  The majority explained that its ruling does not call into question services in which people who have the right to a work store it remotely.  And it left for another day exactly how the copyright laws apply to services that don’t walk and talk like cable companies.

Justice Scalia wrote a dissenting opinion joined by Justices Thomas and Alito.  They thought that Aereo did not perform any work “publicly,” because each individual subscriber picked the particular channel and the particular program.  The dissenters thought that maybe Aereo had found a “loophole” in the law, but they were entitled to use it until Congress closed it.

The upshot is that you shouldn’t cancel your cable subscription.  Today’s ruling leaves little to no room for upstarts like Aereo to find clever legal ways to distribute television programs at a low cost.  Of course, you can always put up your own antennae.

Posted in American Broadcasting Companies v. Aereo, Featured, Plain English / Cases Made Simple

Recommended Citation: Tom Goldstein, How copyright law blocks cheap Internet TV: In Plain English, SCOTUSblog (Jun. 25, 2014, 9:55 PM), http://www.scotusblog.com/2014/06/how-copyright-law-blocks-cheap-internet-tv-in-plain-english/