As Aereo's Supreme Court Date Looms, It Beefs Up Advocacy

By Tara Seals April 17, 2014

Online video streaming startup Aereo is gearing up for its trip to the Supreme Court next week to defend its right to exist after facing lawsuits from nearly every major content company and broadcaster for copyright infringement. The Barry Diller-backed startup has launched, an educational and advocacy site that aims to provide basic information about Aereo and the legal claims before the Supreme Court. The site also features court briefs, amicus briefs and court decisions. 

The broadcasters are suing because they allege that the company retransmits local TV affiliate feeds via the Internet without paying retransmission fees. Aereo has counter-argued that because it provides dime-sized antennae to its subscribers—who pay $8 per month for access to a couple-dozen channels—it constitutes an over-the-air, rabbit-ears-style service, which is exempt from retransmission fees. It has also argued that its content is delivered to a single cloud-based DVR device for one subscriber, and can therefore not be categorized as a public broadcast service, subject to fees and regulations.

The Supreme Court is scheduled to hear oral arguments in the Aereo case on April 22, with a decision expected in June.

 “Last December, we agreed to the broadcasters’ request to seek review of their claims by the United States Supreme Court,” said Chet Kanojia, founder and CEO of the company, in a letter to subscribers. “We made that decision because we wanted their claims against Aereo resolved on their merits, rather than through a wasteful war of attrition.”

He added, “We remain steadfast in our conviction that Aereo’s cloud-based antenna and DVR technology falls squarely within the law. We have every hope and confidence that the Court will validate and preserve a consumer's right to access local over-the-air television using an individual antenna, make a personal recording with a DVR, and watch that recording on a device of their choice.”

The Supreme Court’s decision will clearly have widespread ramifications for over-the-top (OTT) business models going forward.

 “What is at stake in this case is much bigger than Aereo,” Kanojia said. “We believe that consumers are entitled to use a modern, cloud-based, version of an antenna and DVR, and that consumers should not be constrained to 1950s-era technology to watch free-to-air broadcast television. The broadcasters’ positions in this case, if sustained, would impair cloud innovation and threaten the myriad benefits to individuals, companies, and the economy at large of the advances in cloud computing and cloud storage.”

The Aereo defense essentially hinges on two precedents: The Cablevision and Betamax court decisions. The U.S. Supreme Court’s Sony-Betamax decision in 1984 affirmed that consumers have a fundamental right to record copies of over-the-air broadcast television using an individual antenna, for their personal use—paving the way for VCRs and later, DVRs. Then, in 2008, Cablevision beat back broadcaster opposition with a Second Circuit decision that cleared the way for network DVRs to be considered legal, paving the way for cloud-based broadcast models and the cloud storage industry.

In Cablevision, the court agreed that legally, there is no difference between DVRs that stored content remotely on a server and those that keep it locally on a set-top box at the home.  Aereo says that this is the same concept behind its own approach, and that broadcasters are simply denying technological innovation and the rise of cloud services.

“The broadcasters are asking the Court to deny consumers the ability to use the cloud to access a more modern-day television antenna and DVR,” Kenojia said in a separate court filing last month. “They are asking the Court to confine consumers to outdated equipment and limit their access to lawful technology in order to protect a legacy business model, the success of which is built on eliminating consumer choice and competition in the marketplace. If the broadcasters succeed, the consequences to American consumers and the cloud industry are chilling.”

Several amicus briefs have been filed on Aereo’s behalf, including from CCIA and Mozilla, Public Knowledge, the Consumer Electronics Association and the Electronic Frontier Foundation. The Justice Department and even Cablevision itself however have filed against the streamer. In Cablevision’s case, it argued that Aereo should be found illegal because it’s “functionally identical to a cable system,” and that cable systems are subject to must-carry regulations that require that they pay broadcasters for the right to retransmit their over-the-air signals.

But the Justice Department, despite being anti-Aereo, was anxious to narrowly define the scope of the issue, agreeing that the decision could set precedent for how cloud computing infrastructures may be used overall by consumers and businesses.

“A decision rejecting [Aereo’s] infringing business model and reversing the judgment below need not call into question the legitimacy of innovative technologies that allow consumers to use the Internet to store, hear and view their own lawfully acquired copies of copyrighted works,” it said in its filing.

Indeed, “reversal of the judgment below need not threaten the legality of cloud computing,” the department’s lawyers noted. The issue with Aereo, it argued, is that the company is providing access to content that has not already been paid for.”

Edited by Alisen Downey

TechZone360 Contributor

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