Why The US Supreme Court Thinks Streaming Is Cable TV
Kelsey D. Atherton
at 09:17 AM Jun 27 2014
Why The US  Supreme Court Thinks Streaming Is Cable TV
Aereo Antenna Array

Yesterday, in a 6-3 decision by the US Supreme Court in ABC v. Aereo, the government ruled that Aereo's streaming of cable TV over the web is illegal. In the process, the Supreme Court majority showed its confusion over how the internet works—and technology in general—and put forth a strange interpretation of the term "public performance."

Here's how Aereo works (or worked, rather): A subscriber with an internet connection wants to watch a live television show. Rather than paying separately for TV service or even owning a digital TV antenna, however, the customer instead watches the show from a remote antenna that Aereo rents to them. That antenna streams the TV show, as freely broadcast over the air, to the Aereo subscriber via the internet. Aereo also offers the option to digitally record video of a broadcast to its server farm for future viewing (and stream that content, too). Many cable TV subscriptions provide a physical digital video recorder for viewers to save shows; Aereo does this on equipment in a warehouse that is controlled, in part, by each of its subscribers.

The case essentially came down to whether or not this streaming of broadcasts by Aereo counts as a distinct "performance," and if that infringes on the rights of broadcasters to exclusively air content. Here's the SCOTUS majority opinion on the matter, in case you speak legalese:

Does Aereo “perform”? See §106(4) (“[T]he owner of [a] copyright . . . has the exclusive righ[t] . . . to perform the copyrighted work publicly” (emphasis added)); §101 (“To perform . . . a work ‘publicly’ means [among other things] to transmit . . . a performance . . . of the work . . . to the public . . . ” (emphasis added)). Phrased another way, does Aereo “transmit . . . a performance” when a subscriber watches a show using Aereo’s system, or is it only the subscriber who transmits? In Aereo’s view, it does not perform. It does no more than supply equipment that “emulate[s] the operation of a home antenna and [digital video recorder (DVR)].” Brief for Respondent 41. Like a home antenna and DVR, Aereo’s equipment simply responds to its subscribers’ directives. So it is only the subscribers who “perform” when they use Aereo’s equipment to stream television programs to themselves.

After this part, the ruling gets weird. It looks back in time, which is a standard for a practice based on precedent, but the justices chose to highlight pieces of the past that are, well, strange.

One was Community Access TV (CATV), a cable precursor that Popular Science wrote about in 1970. Like Aereo, CATV allowed home viewers to watch broadcast channels, yet with higher fidelity than broadcast. Yet CATV (again, similar to Aereo) suffered a blow that changed how the law saw the service it provided; a 1976 law subjected cable companies to copyright laws in a similar way to over-the-air broadcasters.

To rule as it did on Aereo, the Supreme Court overlooked 40-some years of technological advancement since early cable television and said that, because Aereo functions somewhat like a cable company, it is one. And this is where it comes down to a definition of performance.

Copyright is big on regulating performance. It's a reason companies pay billions of dollars for exclusive rights to air rare events, like the Olympics. NBC broadcasting the Olympics is, in the eye of the law, a performance by NBC. Aereo, however, makes no content selection—its subscribers do that.

In other words: When the law defined "performance," its definition hinged on networks selecting the content they broadcast, not subscribers. And that is a major distinction from the CATV precedent, where the Court ruled that the CATV network selected programing and sent it out continuously. The ruling by Justice Stephen Breyer in ABC v. Aereo argues that emphasizing this difference "makes too much out of too little."

While the Supreme Court decision ruled against Aereo by treating it like a cable company (and, in a weirder later metaphor, like a car dealership instead of a valet), the dissenting opinion better grasps how the technology works.

Justice Antonin Scalia, joined by Justices Clarence Thomas and Samuel Alito, instead dispute the definition of "performance." If a future case succeeds where Aereo failed, it will likely cite this dissent when it does.

Rather than seeing Aereo as just another cable company, and one that doesn't pay for the rights to what it broadcasts, Scalia sees Aereo more in line with the technology that enables it, i.e. as an internet provider. The violation, in this line of thinking, comes not from the company that collects broadcasts, but rather hinges on the consumers. They're the ones who use the technology and choose to watch broadcasts they haven't otherwise paid for.

Scalia writes:

Internet-service providers are a prime example. When one user sends data to another, the provider’s equipment facilitates the transfer automatically. Does that mean that the provider is directly liable when the transmission happens to result in the “reproduc[tion],”§106(1), of a copyrighted work? It does not. The provider’s system is “totally indifferent to the material’s content,” whereas courts require “some aspect of volition”directed at the copyrighted material before direct liability may be imposed.

He continues, likening the copying function of recorded and stored broadcasts to that of a copy shop:

A comparison between copy shops and video-on-demand services illustrates the point. A copy shop rents out photocopiers on a per-use basis. One customer might copy his 10-year-old’s drawings—a perfectly lawful thing to do—while another might duplicate a famous artist’s copyrighted photographs—a use clearly prohibited by §106(1). Either way, the customer chooses the content and activates the copying function; the photocopier does nothing except in response to the customer’s commands. Because the shop plays no role in selecting the content, it cannot be held directly liable when a customer makes an infringing copy. See CoStar, supra, at 550

In published response to the court decision, Aereo CEO and Founder Chet Kanojia emphasizes the Scalia dissent:

“Justice Scalia’s dissent gets it right. He calls out the majority’s opinion as ‘built on the shakiest of foundations.’ (Dissent, page 7) Justice Scalia goes on to say that ‘The Court vows that its ruling will not affect cloud-storage providers and cable television systems, see ante, at 16-17, but it cannot deliver on that promise given the imprecision of its results-driven rule.’ (Dissent, page 11)”

The dissenting SCOTUS view on this case aside, Aereo and other companies must now live with the majority view. The Electronic Frontier Foundation highlights the danger the ruling poses to other technology companies:

"With this ruling, the Supreme Court said that technology companies can't rely on the words of the Copyright Act—companies can follow the letter of the law but still get shut down if a court decides that their business is somehow similar to a cable company," said EFF Staff Attorney Mitch Stoltz. "This decision will make it harder for new independent media technologies to get launched and funded without the blessing of major media companies, and that's a loss for all of us."

The Supreme Court's ruling on Aereo, in effect, protects the broadcast rights of television and cable companies while denying future technologies the same leeway that made cable broadcasting possible in the first place. And, weirdly enough, it does it on behalf of ABC—a company that still broadcasts freely over the air.

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