The US Supreme Court, in a 6-3 decision, has ruled that Aereo — a service that uses tiny antennas to capture television broadcasts, store them, and stream them to subscribers — violated copyright law. The Supreme Court’s decision solidifies the incumbent broadcast model whereby advertising-supported television signals are broadcast and may be viewed free of charge — but not retransmitted without a license — by anyone able to receive them.
The broadcast networks receive billions of dollars in retransmission fees from cable and satellite operators and threatened to remove their television signals from the publicly-owned airwaves if the court ruled against them.
US Supreme Court decision in American Broadcasting Cos. v. Aereo, Inc..
Justice Stephen Breyer, writing for the majority, rejected Aereo’s argument that it was merely renting equipment and found that it was more like a cable system retransmitting copyrighted content without a license. “Insofar as there are differences, those differences concern not the nature of the service that Aereo provides so much as the technological manner in which it provides the service,” wrote Breyer, concluding that Aereo’s retransmission constituted a public performance even though each individual subscriber initiated each individual retransmission.
Nonetheless, the legal basis depended upon by the broadcasters — retransmission as a public performance — is as shaky as Aereo’s business model. Before there was cable television there was community antenna television (CATV) that captured broadcast television signals and retransmitted them to homes without adequate signal reception. The Supreme Court, in Teleprompter Corp. v. Columbia Broadcasting, ruled that regardless of distance, the retransmission by CATV providers was permissible and did not constitute a performance of the copyrighted material.
Whoopsie, a decision against big corporate interests. You know that won’t stand.
Congress came to the rescue of the broadcasters when it passed the Copyright Act of 1976, defining cable television (and CATV) as public performance.
Aereo argued that because it provided an individual antenna for each subscriber, it’s retransmissions were private performances and in compliance with existing law. Breyer rejected the argument, writing, “Thus one can transmit a message to one’s friends, irrespective of whether one sends separate identical emails to each friend or a single email to all at once.”
Aereo based much of its defense on the US Second Circuit Court of Appeals 2008 ruling in Cartoon Network v. SCS Holdings (commonly referred to as the “Cablevision decision“) that legalized cloud-based digital video recorder (DVR) services, finding that:
- A datastream is not a copy
- Time shifting is not a public performance
- Automated copying initiated by a user is not direct infringement
The technology industry has been quite vocal that a ruling against Aereo would stifle innovation, and the justices had expressed concern about that while hearing initial arguments. But just how innovative (forgetting for the moment questions of efficiency) is stuffing a bunch of tiny television antennas in a data center and streaming the signals to subscribers? Aereo has always seemed to me less than the ideal poster child for innovation and a subpar test case for the public performance aspects of copyright law. Breyer addressed all of these concerns in his majority opinion (but read Justice Scalia’s dissenting opinion — all of it — for a lucid alternative view):
“Further, we have interpreted the term ‘the public’ to apply to a group of individuals acting as ordinary members of the public who pay primarily to watch broadcast television programs, many of which are copyrighted. We have said that it does not extend to those who act as owners or possessors of the relevant product. And we have not considered whether the public performance right is infringed when the user of a service pays primarily for something other than the transmission of copyrighted works, such as the remote storage of content…. In addition, an entity does not transmit to the public if it does not transmit to a substantial number of people outside of a family and its social circle.
…
“We cannot now answer more precisely how the Transmit Clause or other provisions of the Copyright Act will apply to technologies not before us. We agree with the Solicitor General that ‘[q]uestions involving cloud computing, [remote storage] DVRs, and other novel issues not before the Court, as to which ‘Congress has not plainly marked [the] course,’ should await a case in which they are squarely presented.'”
Justices Ruth Bader Ginsburg, Elena Kagan, Anthony Kennedy, John Roberts, and Sonia Sotomayor formed the majority; Justices Samuel Alito, Antonin Scalia, and Clarence Thomas dissented.
It’s a sad day when Justice Antonin Scalia makes the most sense, writing the dissenting opinion:
“Aereo offers access to an automated system consisting of routers, servers, transcoders, and dime-sized antennae. Like a photocopier or VCR, that system lies dormant until a subscriber activates it. When a subscriber selects a program, Aereo’s system picks up the relevant broadcast signal, translates its audio and video components into digital data, stores the data in a user-specific file, and transmits that file’s contents to the subscriber via the internet — at which point the subscriber’s laptop, tablet, or other device displays the broadcast just as an ordinary television would. The result of that process fits the statutory definition of a performance to a tee…. The only question is whether those performances are the product of Aereo’s volitional conduct.
“They are not. Unlike video-on-demand services, Aereo does not provide a prearranged assortment of movies and television shows. Rather, it assigns each subscriber an antenna that — like a library card — can be used to obtain whatever broadcasts are freely available. Some of those broadcasts are copyrighted; others are in the public domain. The key point is that subscribers call all the shots: Aereo’s automated system does not relay any program, copyrighted or not, until a subscriber selects the program and tells Aereo to relay it. Aereo’s operation of that system is a volitional act and a but-for cause of the resulting performances, but, as in the case of the copy shop, that degree of involvement is not enough for direct liability.”
This one’s not going to end well.