Opinion analysis: A clever new technology thwarted — for now
on Jun 25, 2014 at 2:03 pm
Insisting that it was not striking a blow against new communications technology, the Supreme Court on Wednesday nevertheless took a sizeable step toward shutting down at least part of a fresh approach to delivering TV programs to paying audiences. It ruled that the engineers at the new firm of Aereo, Inc. had — so far — not found a way to avoid violating television networks’ copyright privileges by delivering their programs to Aereo’s customers for a small monthly fee.
The analytical technique the Court used in finding a likely copyright violation by Aereo was to compare its streaming of Internet-based TV programs to cable TV systems’ snatching of TV broadcasts out of the airwaves for re-delivery to customers. Congress meant to bar that kind of programming in a major 1976 revision of the Copyright Act, the Court said, and it applied that change directly to Aereo’s clever new business model.
The over-the-air TV broadcast industry had taken the case of American Broadcasting Companies v. Aereo to the Supreme Court, claiming that its very survival was at stake. Aereo’s system, the industry contended, was offering a very cheap version of TV programming to its customers while paying not a cent in royalties to the TV networks and their program developers. This was threatening to draw the networks’ own paying customers away, depriving it of revenues that have been replacing their declining take from advertising, the TV firms said.
The Court, in its six-to-three ruling, said nothing about rescuing the TV broadcasters, basing its ruling on a fairly simple application of what it means to “perform” a copyrighted program through distribution to “the public.” Aereo’s system, Justice Stephen G. Breyer wrote for the majority, both performs the copyrighted programs and does so through delivery to the public.
Aereo has developed a system in which it uses thousands of tiny antennas, each tuned to respond to an individual customer’s Internet demand for a particular TV program, and through those antennas it delivers to each customer only their own personal copy. Aereo contended that it simply was supplying the technology hardware — like a DVD recorder — to enable its customers to get access to TV programs that were broadcast over the air.
The Court rejected that claim, concluding that Aereo was not simply an equipment provider. It was putting on the TV shows for its customers, the public.
However, the Court went to some lengths to show that it was issuing only a narrow ruling. It said it was dealing, at this point, only with Aereo’s system so far as it enabled its viewers to view copyrighted TV programs “live,” or after only a brief delay. Justice Breyer stressed that the decision said nothing about downloading a TV program in order to recover it and keep it on hand for somewhat later viewing.
As the case had unfolded before the Court, many in the communications technology sector had worried that a ruling against Aereo would lead to new copyright restrictions on the modern phenomenon of “cloud computing” — that is, downloading something from the Internet, and storing it in a “cloud” provided as a separate service.
It will be time enough to deal with the “cloud,” the opinion said, when an issue directly involving that technology gets before the Court. Justice Breyer also said the new decision was not dealing with other potential time-shifting download technologies.
The Aereo case will now return to lower courts, and it appears that Aereo may have some opportunity there to salvage some of what it offers to its customers. Whether that would still make use of the system of small antennas, taking TV programs off the airwaves, is not clear at this point.
Justice Breyer’s opinion largely in favor of the broadcast industry was supported by Chief Justice John G. Roberts, Jr., and by Justices Ruth Bader Ginsburg, Elena Kagan, Anthony M. Kennedy, and Sonia Sotomayor. Justice Antonin Scalia, joined by Justices Samuel A. Alito, Jr., and Clarence Thomas, dissented. The Scalia opinion argued that what Aereo was doing simply was not a performance at all. It accused the majority of writing a confusing new copyright doctrine that will be hard for lower courts to apply, and for industry to understand what is and is not allowed.