Supreme Court Kills TV Service Aereo

The justices side with TV broadcasters in a 6-3 decision.

Aereo allows subscribers to watch local TV channels on their tablets, phones, and computers. 
National Journal
Brendan Sasso
Add to Briefcase
See more stories about...
Brendan Sasso
June 25, 2014, 6:19 a.m.

The Su­preme Court de­clared Wed­nes­day that In­ter­net video ser­vice Aereo is il­leg­al.

The 6-3 de­cision is a huge win for the TV net­works, who feared that Aereo could des­troy their busi­ness mod­el.

Writ­ing for the ma­jor­ity, Justice Steph­en Brey­er con­cluded that the “pur­pose” of copy­right law makes it clear that Aereo’s ser­vice is a “pub­lic per­form­ance,” and the com­pany there­fore needs per­mis­sion for TV con­tent.

Aereo al­lows sub­scribers to watch and re­cord loc­al TV chan­nels on their com­puters, tab­lets, phones, and In­ter­net-con­nec­ted TVs for as little as $8 per month. The prob­lem is that un­like cable pro­viders, Aereo doesn’t pay the TV sta­tions for their con­tent.

Every­one has the right to ac­cess over-the-air TV chan­nels us­ing an an­tenna. Aereo calls it­self a “mod­ern-day tele­vi­sion an­tenna and DVR.” But Aereo sub­scribers don’t have an­tenna arms stick­ing out of their tab­let com­puters. In­stead, Aereo uses a cluster of thou­sands of tiny an­ten­nas to de­liv­er video over the In­ter­net to all of the sub­scribers in an area. Tech­nic­ally, sub­scribers are rent­ing ac­cess to one of those an­ten­nas.

But the court didn’t buy Aereo’s de­scrip­tion of it­self. Brey­er wrote that the his­tory of copy­right law “makes clear that Aereo is not simply an equip­ment pro­vider,” and is ac­tu­ally “sub­stan­tially sim­il­ar” to a cable TV ser­vice. There­fore, Aereo should have to pay re­trans­mis­sion fees just like cable pro­viders do, the court ruled.

The court ac­know­ledged that Aereo only ac­tiv­ates an an­tenna based on a re­quest from an in­di­vidu­al user, but said the com­pany it­self is still in­fringing on copy­right. The tech­no­lo­gic­al dis­tinc­tion makes no dif­fer­ence to either users or TV broad­casters, the court con­cluded.

“Giv­en Aereo’s over­whelm­ing like­ness to the cable com­pan­ies tar­geted by [copy­right law], this sole tech­no­lo­gic­al dif­fer­ence between Aereo and tra­di­tion­al cable com­pan­ies does not make a crit­ic­al dif­fer­ence here,” the ma­jor­ity wrote.

Barry Diller, a me­dia mogul and primary in­vestor in Aereo, has said re­peatedly that the ser­vice would shut down if it lost at the high court. 

Aereo CEO Chet Kan­ojia said the de­cision is a “massive set­back for the Amer­ic­an con­sumer.” But he said the com­pany’s “work is not done,” and “we will con­tin­ue to fight for our con­sumers and fight to cre­ate in­nov­at­ive tech­no­lo­gies that have a mean­ing­ful and pos­it­ive im­pact on our world.”

Justice Ant­on­in Scalia wrote the dis­sent, which was joined by Justices Clar­ence Thomas and Samuel Alito. The con­ser­vat­ive justices ar­gued that the court should fo­cus on the plain read­ing of copy­right law and not try to ex­pand it to meet Con­gress’s in­tent.

“It is not the role of this Court to identi­fy and plug loop­holes,” they wrote. “It is the role of good law­yers to identi­fy and ex­ploit them, and the role of Con­gress to elim­in­ate them if it wishes.”

The In­ter­net in­dustry has been track­ing the Aereo case nervously, fear­ing that a broad rul­ing against the video start-up could en­danger oth­er cloud stor­age pro­viders. Like Aereo, com­pan­ies in­clud­ing Google, Amazon, Apple, and Drop­box al­low users to re­motely ac­cess copy­righted ma­ter­i­al.

The court tried to craft a nar­row rul­ing, say­ing it was not ad­dress­ing all re­mote stor­age of con­tent.

But the dis­sent­ers ar­gued the rul­ing will “sow con­fu­sion for years to come,” as courts try to sort out which ser­vices are le­git­im­ate and which too closely re­semble Aereo.

The TV broad­casters had feared that an Aereo win could doom their whole in­dustry by elim­in­at­ing the roughly $3.3 bil­lion they pull in every year in pay­ments from cable TV pro­viders. If the court had up­held Aereo, the cable pro­viders could have cut off those pay­ments either by en­ter­ing in­to agree­ments with Aereo or mim­ick­ing the com­pany’s tech­no­logy.

In a state­ment, Na­tion­al As­so­ci­ation of Broad­casters CEO Gor­don Smith said TV sta­tions “will al­ways wel­come part­ner­ships with com­pan­ies who re­spect copy­right law.”

“Today’s de­cision sends an un­mis­tak­able mes­sage that busi­nesses built on the theft of copy­righted ma­ter­i­al will not be tol­er­ated,” Smith said.

What We're Following See More »
WITH LIVE BLOGGING
Trump Deposition Video Is Online
4 hours ago
STAFF PICKS

The video of Donald Trump's deposition in his case against restaurateur Jeffrey Zakarian is now live. Slate's Jim Newell and Josh Voorhees are live-blogging it while they watch.

Source:
SOUND LEVEL AFFECTED
Debate Commission Admits Issues with Trump’s Mic
5 hours ago
THE LATEST

The Commission on Presidential Debates put out a statement today that gives credence to Donald Trump's claims that he had a bad microphone on Monday night. "Regarding the first debate, there were issues regarding Donald Trump's audio that affected the sound level in the debate hall," read the statement in its entirety.

Source:
TRUMP VS. CHEFS
Trump Deposition Video to Be Released
5 hours ago
THE LATEST

"A video of Donald Trump testifying under oath about his provocative rhetoric about Mexicans and other Latinos is set to go public" as soon as today. "Trump gave the testimony in June at a law office in Washington in connection with one of two lawsuits he filed last year after prominent chefs reacted to the controversy over his remarks by pulling out of plans to open restaurants at his new D.C. hotel. D.C. Superior Court Judge Brian Holeman said in an order issued Thursday evening that fears the testimony might show up in campaign commercials were no basis to keep the public from seeing the video."

Source:
A CANDIDATE TO BE ‘PROUD’ OF
Chicago Tribune Endorses Gary Johnson
9 hours ago
THE LATEST

No matter that his recall of foreign leaders leaves something to be desired, Gary Johnson is the choice of the Chicago Tribune's editorial board. The editors argue that Donald Trump couldn't do the job of president, while hitting Hillary Clinton for "her intent to greatly increase federal spending and taxation, and serious questions about honesty and trust." Which leaves them with Johnson. "Every American who casts a vote for him is standing for principles," they write, "and can be proud of that vote. Yes, proud of a candidate in 2016."

FUNERAL FOR ISRAELI LEADER
Obama Compares Peres to ‘Giants of the 20th Century’
9 hours ago
THE DETAILS

Speaking at the funeral of former Israeli Prime Minister Shimon Peres, President Obama "compared Peres to 'other giants of the 20th century' such as Nelson Mandela and Queen Elizabeth who 'find no need to posture or traffic in what's popular in the moment.'" Among the 6,000 mourners at the service was Palestinian President Mahmoud Abbas. Obama called Abbas's presence a sign of the "unfinished business of peace" in the region.

Source:
×