The Supreme Court Doesn’t Like Aereo”“But Is Worried About Declaring It Illegal

The justices mull the fate of the video-streaming website.

Aereo CEO Chet Kanojia (L) leaves the U.S. Supreme Court with unidentified family members after oral arguments April 22, 2014 in Washington, DC. The Supreme Court heard arguments in a case against Aereo on the companys profiting from rebroadcasting network TVs programs obtained from public airwaves. 
National Journal
Brendan Sasso
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Brendan Sasso
April 22, 2014, 8:50 a.m.

The Su­preme Court justices were crit­ic­al of the In­ter­net video ser­vice Aereo dur­ing or­al ar­gu­ments Tues­day — but they ap­peared un­sure how to rule.

The justices wor­ried that if they de­clare Aereo il­leg­al, it could throw oth­er ma­jor ser­vices, such as “cloud” stor­age pro­viders, in­to jeop­ardy.

Justice Steph­en Brey­er said he was “nervous” about sid­ing with TV broad­casters, who claim that Aereo is steal­ing their con­tent.

“This is really hard for me,” Justice So­nia So­to­may­or said.

Aereo al­lows sub­scribers to watch and re­cord loc­al TV broad­casts 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 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.

ABC, CBS, NBC, and Fox all sued, claim­ing Aereo is in­fringing on their copy­righted ma­ter­i­al. Paul Clem­ent, an at­tor­ney for the TV net­works, said Aereo is just try­ing to use a trick to evade copy­right law.

“If all they have is a gim­mick, then they prob­ably will go out of busi­ness, and no one should cry a tear,” Clem­ent said when he was asked what would hap­pen to Aereo if the court sided with him.

“Your tech­no­lo­gic­al mod­el is based solely on cir­cum­vent­ing leg­al pro­hib­i­tions that you don’t want to com­ply with,” Chief Justice John Roberts said to Aereo’s at­tor­ney, Dav­id Fre­d­er­ick. 

(Stephanie Stamm)

Justice Ruth Bader Gins­burg wor­ried that sid­ing with Aereo could vi­ol­ate in­ter­na­tion­al ob­lig­a­tions un­der copy­right treat­ies.

“You’re the only play­er so far that doesn’t pay any roy­al­ties at any stage,” Gins­burg said to Fre­d­er­ick.

But Fre­d­er­ick ar­gued the com­pany is only an “equip­ment pro­vider.” Ra­di­oShack doesn’t in­fringe on any copy­rights by selling its products, he said.

Fre­d­er­ick ar­gued that for leg­al pur­poses, Aereo’s busi­ness would be no dif­fer­ent if it in­stalled an­ten­nas and DVRs and then charged a monthly rent­al fee.

He warned that if the court sides with the TV net­works, it could dev­ast­ate the cloud com­put­ing in­dustry. Com­pan­ies like Google, Amazon, Apple, and Drop­box also al­low con­sumers to store copy­righted ma­ter­i­al on their serv­ers. Fre­d­er­ick said the cloud com­pan­ies are “freaked out about this case.” 

But Clem­ent said the dif­fer­ence between le­git­im­ate cloud stor­age sites and Aereo is like the dif­fer­ence between a valet ser­vice and a car deal­er­ship. Con­sumers need to already have a car to use a valet ser­vice. Be­cause Aereo is provid­ing ma­ter­i­al to con­sumers in the first place, it should have to pay for it (just like a car deal­er­ship would), Clem­ent said.

Brey­er said that even after read­ing the briefs in the case, he re­mains con­fused.

“That isn’t your prob­lem, but it might turn out to be,” Brey­er said to Aereo’s at­tor­ney.

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