American Broadcasting Companies v. Aereo

The Internet is abuzz with discussion in the wake of today’s ruling in American Broadcasting Companies v. Aereo, but I can’t let it go by without offering my own opinion. As a “cord cutter” who lives an hour away from most of the over-the-air broadcasters, I have a personal interest in an Aereo-like service. I’d much rather pay $8/month to receive local television broadcasts over the Internet than to pay to install and maintain an aerial antenna. So it was with much dismay (but little surprise) that I read that the Supreme Court ruled 6-3 against Aereo.

I won’t presume to say that I know the law better than six justices of the nation’s highest court. Indeed, I’m not convinced that the ruling is incorrect from a legal standpoint. It’s certainly true, as the majority held, that Congress acted in 1976 to prevent the retransmission of broadcasts by community antenna TV (CATV) systems. Aereo, according to the majority, is similar to the old CATV systems. The fact that the underlying technology is substantially different from CATV (particularly in that there’s a 1:1 correspondence between receiver and customer as opposed to the one-to-many of CATV) is irrelevant, only the customer-facing experience matters.

As Justice Scalia noted in his dissent, that’s a lousy argument. I’ll grant that Aereo was slavishly devoted to the strict letter of the law (a less generous description is “exploiting the hell out of loopholes”), but the technical implementation matters. Aereo subscribers have their own antenna (ephemerally-assigned, as I understand it) and their recordings are stored in their own account. It’s not much of a leap (except in the cost) to provide an antenna and run a coaxial cable directly from the antenna to the customer’s television. At that point, it would be very difficult to argue that the service provider is “performing”, even by the ludicrously broad definition in the 1976 update to the Copyright Act.

Even if the Court’s ruling today is technically correct for this specific case, I worry about the impact it will have on technological advances in general. While the majority took care to say that “those who act as owners or possessors of the relevant product”, you have to imagine that some enterprising entertainment lawyer is looking to step up the attack on services like Slingbox. Just as rulings against Napster, Grokster, and others have failed to end file sharing, consumers will still be able to find content they want online. It’s just a matter of whether or not the creators and distributors get paid for it. The content industry has shown to be remarkably out of tune with the consumer, and the Aereo ruling only delays the inevitable.

Of course, Aereo isn’t exactly being forced to shutter. They can stay in business by paying retransmission fees to the broadcasters (assuming such an option is economically viable for them). This is probably the outcome that would make the broadcasters happiest. The real money these days is in retransmission fees, not advertising, so broadening the viewer base without broadening the pool of people paying for content they’re entitled to (by virtue of living within the broadcast range of the station) isn’t nearly as lucrative. Alternately, if Aereo provided a specific antenna to each user (such that the user owned the antenna and Aereo just housed it), that might be sufficient to meet the conditions established in today’s ruling.

It’s unlikely that Aereo will do anything but shut down. Aereo’s CEO has said “there is no plan B”. While the Court’s ruling today may have been correct, it is wrong.

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