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Challenge to streaming TV

Asserting that the future of broadcast television is seriously at risk, networks, stations, and programming companies have asked the Supreme Court to give them broad copyright protection against the streaming of their programs on the Internet by an outsider, with no payments to them.  The Court may take its first look later this year at the case, American Broadcasting Companies v. Aereo, Inc. (docket 13-461).  An answering brief is now due on November 12.   The case, if granted, could be decided in the current Term.

At the center of this digital age controversy is a Brooklyn-based company, Aereo, Inc., that uses many small antennas to pick up over-the-air TV programs which it then transmits, for a fee, to customers.  It does so without the permission of the broadcasters or owners of the copyrights on the shows, and it has won a major victory in a ruling last April by the  Second Circuit Court declaring that, because the transmissions are not legally a “public performance,” there is no violation of the federal Copyright Act.  The TV industry counters that this is exactly the kind of competition that the Act was written to head off.

To illustrate its grievance, the broadcast industry told the Court that this is what the Circuit Court’s ruling means in the real world: “When tens of thousands of Aereo subscribers all simultaneously watch the same broadcast of the Super Bowl using Aereo, Aereo is not publicly performing the Super Bowl.  It is merely making tens of thousands of simultaneous ‘private’ performances to its subscribers.”  That, the petition argued, is “nonsensical reasoning” that contradicts the “plain text” of the Copyright Act.

Led by the ABC-TV network, much of the over-the-air television industry has joined in what its lawyers call an urgent petition, arguing that Aereo’s operations threaten “a profound and devastating effect on broadcast television.” Aereo is able to charge lower fees to its viewers than other distributors of TV programs because, unlike them,  Aereo is not “paying a penny” to the copyright owners, the petition said.   Since the broadcast industry now relies more heavily upon income from transmission fees than from advertising, this new challenger is posing a basic threat to the broadcasters’ ability to continue providing TV for free, the industry contended.

The threat, the companies added, is not coming only from Aereo.  There are now “copycat” operators who are also picking up broadcasts and peddling them on the Internet, and some of the distributors who have been doing business with the broadcast companies are pondering splitting off or demanding a reduction in the transmission fees they have been paying, the petition said.

Under the Copyright Act, the owner of a protected creation has an exclusive right “to perform the copyrighted work publicly.”  Thus, the key issue in the new case is what Congress meant by “public performance.”  The over-the-air TV industry has argued that Congress used intentionally broad language on what constitutes a public performance, and made it clear that the language would apply even if technology were to shift to new devices or methods in the future.  Thus, the petition contended, when Aereo picks up programs from broadcasters and sends them on to “tens of thousands of members of the public over the Internet for a profit,” that is a vast public performance and, given Aereo’s current plans for expansion, its operations will soon reach tens of millions more viewers.

The industry argues that Aereo put together its digital approach to transmitting copyright programs precisely to fit within a loophole that the Second Circuit Court had created in copyright law in a 2008 ruling (the so-called Cablevision decision) that the Supreme Court refused in 2009 to review.  Under that approach, a one-to-one transmission of a specific program signal is not a public performance.  In the Second Circuit’s view, the industry asserted, “so long as no two people can receive the same transmission of a performance, the public performance right is not violated — even if the performance is being transmitted concurrently to thousands of members of the public.”

In this case, the court of appeals concluded that because Aereo assigns each of its subscribers an individual antenna at the time the show is streamed or recorded, the company’s “performance” is private rather than public.  The court analogized the service to the ability of a local television customer to watch and record a program for later viewing.  In essence, the court of appeals concluded, Aereo is lawfully providing a service for many local residents that they could have undertaken themselves individually.

That is a view that other courts have rejected, the broadcasters and programmers told the Court.   Thus, it is now up to the Court to settle the meaning of “public performances,” the petition said.

The broadcasters’ request does face three challenges.  First, the court of appeals decided only that the broadcasters were not entitled to a preliminary injunction against the Aereo service.  The Supreme Court generally does not enter a case at such an early stage, but it may conclude that this ruling essentially determines Aereo’s legality under the copyright laws.  Second, while the broadcasters identify decisions holding that such services violate the Copyright Act, none have been issued by a court of appeals, so that the case lacks the “circuit conflict” that generally drives the Court’s review.  Third, other cases on the same question are being litigated in several lower courts, and the Justices may decide the best course is to await one of those.

One side issue that will arise as the case proceeds in the Supreme Court is the slim possibility that Justice Elena Kagan will not take part.  The TV industry’s petition quotes a brief that she filed as U.S. Solicitor General in the precedent-setting Second Circuit Cablevision ruling that provided a precedent for the new Circuit Court decision.  The practice of the Justices, however, is not to recuse themselves on the basis of their prior participation in separate, though closely related, cases.

Recommended Citation: Lyle Denniston, Challenge to streaming TV, SCOTUSblog (Oct. 23, 2013, 8:48 PM),