Angiulo: Supreme Court Shuts Down Innovative Aereo TV Service

Monday, June 30, 2014

Leonardo Angiulo, GoLocalProv Legal Expert

 

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Television is big business.  According to the United States Bureau of Labor and Statistics the average American over 15 years old in 2013 watched 2.8 hours of television in a day.  According to the same study, this represents a majority of our free time and means what little time we have is spent consuming information from broadcasters.  Advertisers know this and spend vast sums of money on commercials and product placement on television programs.

The ubiquitous nature of television in American homes has a history that goes back to the post-World War II era.  A fair number of people can remember turning knobs to change channels, adjusting antennae on the top of the television to get better reception, and the sight of test patterns when a channel would stop broadcasting.  Even if you don't remember these things firsthand, you likely know about them because such things are part of our cultural history.

While televisions remain the center of nearly everyone's living rooms, the technology behind the delivery of programming has changed dramatically.  While there used to be only local channels sending their broadcasts over the airwaves, the current cable delivery systems give us seemingly limitless options.  The variety of options come, in part, due to rather large corporations such as Comcast and Viacom producing tons of content, which people hypothetically want to watch, and finding the advertisers to pay to access the attendant viewers. 

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Services like cable and satellite dish companies allow you to watch all that content wherever and whenever you want without having to worry about the amount of tinfoil carefully wrapped around rabbit ears.  Despite all those technological advancements, many television stations still broadcast their content over traditional airwaves.  In Boston, for example, original channels like 4, 5, 7, 38, and 56 still exist, and if you have an antenna in the right location you can get major network shows for free. 

Until recently, the accessibility of broadcasts was the principle underlying the business model for a company known as Aereo.  According to the company website, Aereo re-imagined the way in which people could receive the airwave transmissions of television stations.  Instead of being miles away in Worcester, Aereo provided antennae in close proximity to the broadcast towers and relayed transmissions on demand over the web to various devices like televisions, tablets and phones.  They provided this service for a minimal fee and presented it as providing individuals with their own antenna, just remotely located.

The description of Aereo is written in the past tense because as of the time of this writing, a website for the company exists but so does a U.S. Supreme Court ruling issued on Wednesday June 25, 2014 that fundamentally ends its service.  The founder of the company issued a statement on Saturday September 28, 2014 explaining the service will be paused while the case is further litigated in the lower court.  Exactly why this cloud based service must be paused, maybe forever, is contained within the case of American Broadcasting Cos., Inc. et al v. Aereo, Inc. fka Bamboom Labs, Inc. 

The problem appears to be the court's majority found Aereo did more than just provide equipment for people.  According to the ruling, by receiving and retransmitting broadcasts over the web they were doing exactly what Congress had previously created a complex licensing scheme to regulate.  All that regulation exists, the argument goes, to ensure the protection of copyright material contained within the television stations’ original broadcasts.  Since the rebroadcasting by Aereo constitutes a public performance of the copyrighted material, the court ruled the company must comply with the relevant licensing scheme just like a cable company would.  As you can imagine, those that spend the time and money to create and produce original content do not appreciate someone else making money from their product without the same costs.  

Interestingly, this decision was not unanimous and was the subject of a dissent by Justice Scalia.  His opinion includes a notable paragraph that begins with the idea that he feels what Aereo does shouldn't be allowed, but that it is within a loophole in current legislative structure.  He goes on to state that it is the job of good lawyers to find and use loopholes for their client's benefit.  Conversely, it is the job of Congress to close them if they see fit.  According to him it is not the role of the Supreme Court to plug them but to enforce the law as it exists.  Justice Scalia would not block Aereo's service under the current law because to do it the way the majority's way is to evaluate a new technology and apply a law that, in his opinion, hasn't been written yet.

Without much debate, it can be said that this decision enforces the status quo of how television programming reaches homes and people.   Interestingly, the majority's opinion explicitly states that its ruling is to be a narrow application to these particular facts and Aereo as a service provider.  As referenced in Scalia's dissent, however, where broadcasters see an existential threat some technological innovators see this ruling as stifling their industry and causing the loss of billions in potential investment in the future.  Exactly what comes next for content distribution appears to be up in the air. 

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Leonardo Angiulo is an Attorney with the firm of Glickman, Sugarman, Kneeland & Gribouski in Worcester handling legal matters across the Commonwealth. He can be reached by email at [email protected].

 

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