Is the Supreme Court Preparing to End TV as We Know It?

Justices will soon decide whether to hear a lawsuit that broadcasters say they need to win to survive.

Members of the cast of NBC's 30 Rock.
National Journal
Brendan Sasso
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Brendan Sasso
Jan. 10, 2014, midnight

The Su­preme Court could de­cide as soon as Fri­day wheth­er it will hear a case that could re­shape the tele­vi­sion in­dustry.

ABC, CBS, NBC, Fox, and oth­er TV broad­casters are su­ing to shut­down an In­ter­net video com­pany called Aereo. The broad­casters warn that if they lose, it could be the end of their in­dustry.

Aereo, which is backed by me­dia mogul Barry Diller, al­lows cus­tom­ers to watch loc­al TV chan­nels on their com­puters, tab­lets, or In­ter­net-con­nec­ted TVs for a monthly fee. But, un­like cable and satel­lite pro­viders, Aereo doesn’t pay the TV broad­casters for their con­tent.

In a brief filed with the Su­preme Court, law­yers for the TV net­works as­ser­ted that Aereo’s busi­ness mod­el is “built on the for-profit ex­ploit­a­tion of the copy­righted works of oth­ers” and that the com­pany “im­per­ils “¦ the vi­ab­il­ity of over-the-air broad­cast tele­vi­sion.”

Aereo ar­gues that it doesn’t need the broad­casters’ per­mis­sion be­cause it uses clusters of tiny an­ten­nas to pick up the over-the-air broad­cast TV sig­nals and then trans­mits those chan­nels to its cus­tom­ers over the In­ter­net. Any­one has the right to ac­cess broad­cast TV with an an­tenna, al­though most people watch broad­cast chan­nels as part of a pack­age from their cable pro­vider.

The broad­casters say Aereo is try­ing to cre­ate a loop­hole in copy­right law, but Aereo ar­gues it is only mak­ing it easi­er for con­sumers to ac­cess video that should already be free.

The case turns on wheth­er Aereo’s ser­vice is a “pub­lic per­form­ance” or wheth­er each an­tenna and video stream is “private.” The U.S. Court of Ap­peals for the 2nd Cir­cuit has backed Aereo, while fed­er­al Dis­trict Court judges in Wash­ing­ton, D.C., and Cali­for­nia have ruled for the broad­casters in cases in­volving a sim­il­ar ser­vice.

Both sides want the Su­preme Court to take up the case. The broad­casters say Aereo is caus­ing them “ir­re­par­able harm” as long as it keeps op­er­at­ing, while Aereo fears that if the Su­preme Court doesn’t hear the case, the com­pany will have to wage costly battles with the broad­casters in Ap­peals Courts around the coun­try.

The case is about more than just one In­ter­net video com­pany. If Aereo wins, cable and satel­lite pro­viders may use a sim­il­ar tech­nique to avoid the bil­lions of dol­lars they pay every year to of­fer broad­cast TV chan­nels.

“I don’t know if Aereo per se is that big of a con­cern to broad­casters,” Den­nis Whar­ton, a spokes­man for the Na­tion­al As­so­ci­ation of Broad­casters, said. “What’s the con­cern is the pre­ced­ent that is set of tak­ing con­tent that you don’t own, char­ging a price for it, and keep­ing all the rev­en­ue. That’s the re­volu­tion­ary concept.”

News Corp. Pres­id­ent Chase Carey threatened last year to yank Fox pro­gram­ming off the air if Aereo wins.

“If we can’t have our rights prop­erly pro­tec­ted through leg­al and polit­ic­al av­en­ues, we will pur­sue busi­ness solu­tions,” Carey said at the time. “One such busi­ness solu­tion would be to take the net­work and turn it in­to a sub­scrip­tion ser­vice.”

Steve Ef­fros, a tele­vi­sion-in­dustry con­sult­ant and a former lob­by­ist for the cable in­dustry, pre­dicted that if the Su­preme Court sides with Aereo, the broad­casters will launch an all-out lob­by­ing push to get Con­gress to re­write the law or for the Fed­er­al Com­mu­nic­a­tions Com­mis­sion to in­ter­vene.

“The copy­right law is, of course, writ­ten by Con­gress, so they could change two words and end this thing,” Ef­fros said. “There is an im­port­ance to what the Su­preme Court may de­cide to do here, but it is an im­port­ance with re­gard to the be­gin­ning of a pro­cess, not the end of a pro­cess.”

If cable pro­viders stop pay­ing broad­casters to of­fer their chan­nels, broad­casters will have only one re­main­ing source of rev­en­ue: ad­vert­ising. But that rev­en­ue stream is also un­der as­sault from tech­no­lo­gies that al­low view­ers to skip com­mer­cials.

The broad­casters have also sued Dish Net­work over its Hop­per ser­vice, which lets view­ers auto­mat­ic­ally skip over ads on broad­cast chan­nels.

Whar­ton warned that if new tech­no­lo­gies force broad­casters off the air, view­ers will lose ac­cess to not only qual­ity en­ter­tain­ment, but also a crit­ic­al in­form­a­tion source dur­ing dis­asters.

“Ask the people in New Jer­sey and New York City [dur­ing su­per­storm Sandy] if broad­cast­ing mattered. When all the cable sys­tems were down, when all the broad­band sys­tems were down, when all the cell-phone net­works were down, broad­cast­ing was the one tech­no­logy that sur­vived,” he said.

But John Bergmay­er, a staff at­tor­ney for con­sumer ad­vocacy group Pub­lic Know­ledge, ar­gued that pub­lic policy shouldn’t be dis­tor­ted to pro­tect the big in­cum­bent play­ers.

“I just can’t get over the broad­casters. They get free spec­trum that oth­er people don’t get, and they’re sup­posed to be of­fer­ing a free ser­vice, but they just can’t get out over the fact that there are some people that might want to re­ceive their con­tent with an an­tenna in­stead of pay­ing for it,” Bergmay­er said.

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