Aereo decision coming soon

#1
A decision from the Supreme Court could come down any day in the case of American Broadcasting Companies v. Aereo. This will have permanent, far reaching implications for the way everyone in the U.S. watches television. Aereo CEO Chet Kanojia did an interview with Katie Couric explaining his side of the case.
[video]http://news.yahoo.com/video/remote-control-aereo-revolutionize-tv-013235559.html?format=embed[/video]

The Boston Globe seems thoroughly convinced by Kanojia's "left brain, right brain thinking."
Aereo wants a TV revolution, if the Supreme Court will let it - Magazine - The Boston Globe

OTOH, Pete Putman, noted HDTV antenna guru, believes Aereo is a Rube Goldberg contraption that should be deconstructed.
Deconstructing Aereo | HDTVexpert

On May 5, Moody's stated an Aereo victory “is unlikely, but [we] can’t rule out the possibility,” but in a recent Bloomberg radio interview, Moody senior vice president Neil Begley said "there are a lot of people who believe it is a toss-up at this point.” One of those people is Aereo’s primary financial backer Barry Diller, who puts the odds at precisely 50 percent.

Amy Howe, creator and editor of the Peabody award winning ScotusBlog, thinks all outstanding decisions will be in before the end of June, but since Aereo was argued just six weeks ago, an early decision seems unlikely.

Rick
 
#2
My guess is that it will be another two weeks before we see the announcement of the decision.

My opinion is that Aereo can not only survive, but can expand and prosper, if they simply license the content instead of going to such lengths to avoid such an agreement.
 
#4
Probably not, unless some of the Supremes choose to be activists and try to make new law to permit Aereo to operate without the constraint of having to pay copyright holders for the right to redistribute content.

It's a pretty straightforward copyright case, IMHO.
 

MrPogi

Moderator, , Webmaster of Cache Free TV
Staff member
#5
If Aereo were just receiving the signals on individual antennas and feeding it down a cable to individuals, I believe it would be a decision in Aereo's favor. But Aereo is not just sending that raw signal down the wire, it is re-encoding it - and therefore, copying it.
 
#6
If Aereo were just receiving the signals on individual antennas and feeding it down a cable to individuals, I believe it would be a decision in Aereo's favor. But Aereo is not just sending that raw signal down the wire, it is re-encoding it - and therefore, copying it.
Cablevision already won that right in the 2cnd Circuit Court of Appeals. They have a DVR service in the cloud, and naturally that requires recording and encoding the signal into standard internet packet format.

Cablevision thinks Aereo is illegal, but they don't like the broadcasters' argument either, which would probably upend the Cablevision decision.

The current state of the law is what the 2cnd Circuit Court said, unless the Supreme Court overturns Cablevision, or some other existing law. For example, if they had refused to hear the case, Aereo would continue, at least in the 2cnd Circuit and the other circuit where it was already adjudicated.

The Supreme court could remand the case to a lower court to determine whether Aereo is a "cable company" under the Cable Television Consumer Protection and Competition Act of 1992. The prosecution doesn't want that result (as they clearly stated in oral arguments) because a) they don't think Aereo is a cable company, and b) if Aereo is a cable company, they still don't believe Aereo would need to pay royalties! There are specific exemptions in the Cable Act of 1992.

Why did Congress write the Cable act? Specifically to force cable companies to pay royalties. It says so right in the statute. Before 1992, going way back to the dawn of radio and television, NOBODY EVER had to pay ANYONE to rebroadcast local stations, because the law, as interpreted by the courts, said the signal becomes public domain the instant it hits the airwaves (which belong to the public). Congress was even careful to say the 1992 revision should ONLY apply to cable companies, and the act should never be construed to apply to other copying.

So to rule against Aereo, using the broadcasters' own logic, the Supreme Court will have to ignore the 1992 act (because that's only for cable companies), AND overturn 100+ years of precedent on copyright of free OTA signals. Now that would be activist!

But the SCOTUS doesn't have to use the broadcasters' logic, and that may be their only hope to get out of this mess. I think they should remand, because I think Aereo is a cable company under the '92 definition. Whether that would really be a victory for Aereo, as the prosecution fears, I'm not sure.

Rick
 
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#7
Some Interesting Analysis

TVTechnology: McAdams On: Aereo

The jist of this article is that Aereo's case is based on the one-antenna-one-subscriber model, and that is technological nonsense. Tiny antennas packed as closely as Aereo's figures claim will act as one large antenna. Yet the 2cnd Court of Appeals was required by the rules of evidence to ignore that incontrovertible fact, and the Supreme Court is in the same predicament. Therefore, whatever happens, "The result will be the legacy of a flimflam."

Here is a really superb analysis of all the legal issues onvolved, and the history behind them:
Aereo in Context | CIMC/Greenfield

If you can absorb those two articles, you may be ready for this stunner:
Why Aereo Will Win, and Win Easily (at the Supreme Court) | CIMC/Greenfield

The one statement I can't agree with in this analysis is this: "The disparity is so great, and the arguments in favor of Aereo so strong, that it’s now hard to believe that either a factual misunderstanding, or politics, could avert the Supreme Court from reaching the correct outcome." I think this Supreme Court has shown very clearly that they can be manipulated by big money insider politics. So even though it should be a slam dunk in favor of Aereo, I think the Supreme Court will either rule against Aereo, or remand to a lower court (a result neither side wants).

Rick
 
J

J. S. Greenfield

Guest
#9
If you want an analysis of oral argument, see:

Aereo Oral Argument Annotated: The Good, The Bad and The Ugly | CIMC/Greenfield

(Warning, this is a full review of the justices comments during oral argument, so it's long.) Given the level of technological illiteracy exhibited during oral argument, I fear that technological misunderstanding is a bigger concern than I had hoped/expected prior to oral argument. I think politics are not likely to be an issue. (This is not in the domain of ideological issues.)

Nonetheless, based on the Justices' comments during oral argument, it appears most likely that there will be a majority for Aereo.

Some comments, regarding other statements above:

1) Aereo almost certainly could not operate if they needed to negotiate retransmission with broadcasters. For two decades, major broadcast networks have used retransmission consent for their owned and operated stations to force carriage of the rest of their cable networks as part of the channel bundle. They're not about to undercut their own business to license just their broadcast networks to Aereo. In other words, major broadcasters would probably refuse to license their signals to Aereo on anything even remotely resembling reasonable terms.

2) Retransmission fees aren't copyright fees. Cable operators don't pay copyright fees to retransmit local stations. Such is covered under the 17 USC 111 compulsory license for local retransmission of broadcast stations. (Operators pay just a minimum filing fee for local retransmission.) Copyright fees are applicable only for non-local retransmission, and then get paid into a fund to pay rights holders, not broadcasters. The broadcasters are complaining about retrans fees that are separate from copyright law, and which are not even at issue in the (copyright) case before the Court.

3) What would be activist would be for the Court to try to find Aereo's performances to be public performances. Though the result may be unsatisfying for some, the text of the law as it exists requires the conclusion that the transmissions are private performances. One must badly contort the text to reach a conclusion that the transmissions are public performances -- and attempting to do such would unavoidably create unintended consequences for a wide array of other technologies and applications, most notably, cloud storage and streaming technologies. These "good" cloud technologies cannot be separated from "bad" technologies like Aereo, except by creating new, arbitrary distinctions, with no basis whatsoever in the existing statute. If such is appropriate, it is the domain of Congress, not the courts, to create such new, arbitrary distinctions.

4) Even if the Court finds the performances to be public, it's quite clear from oral argument that they will provide guidance recognizing that Aereo qualifies as a cable system under the Copyright Act, so that they are entitled to the compulsory license for retransmission. But they still won't be subject to retransmission consent, because the Cable Act uses a different definition of cable system, that clearly excludes OTT providers like Aereo. (Note however that retransmission consent isn't an exception to copyright law. It's completely separate. And it doesn't apply to just cable companies. It applies to MVPDs (multichannel video programming distributors) generally. But Aereo doesn't fall within the current definition of an MVPD.)

5) Claims that Aereo's antennas obviously act as a single antenna are just that, claims -- and claims that aren't supported by the factual record. The broadcasters challenged the independent functioning of the antennas in district court, and they lost badly. This was not merely some technicality of law where facts had to be ignored. It's conceivable that the broadcasters could try again, but any claims that the antennas obviously can't function independently and still work should be understood as bluster, given the broadcasters failed to present credible evidence of such, even with access to the equipment to conduct their own testing.

6) The question of public vs. private performance doesn't even depend on whether there are individual antennas for each user. (Whether the DVR copies made are legal fair use probably does, but that isn't at issue in the current proceeding.)

The bottom line in this case is simple: the law clearly requires a conclusion that the transmissions in question are private performances. A finding otherwise will have significant, problematic consequences, not so much for Aereo (who ironically, will probably be able to reconfigure itself with the benefit of the compulsory license mentioned above) but for a lot of other entities.

If you believe that Aereo being legal is a problematic outcome, then you should be arguing/hoping for Congressional action to revise the law in a sensible fashion, not for judicial activism to elevate some sense of right and wrong over what the existing law actually says, and creating lots of unintended and problematic side-effects in the process.
 
#10
Firstly, :welcome: to the forum, Mr. Greenfield! None of us are lawyers here, but my niece is a lawyer who offered to defend me in a copyright case thirty years ago, so that counts for something, right? WELL??? :behindsofa:

5) Claims that Aereo's antennas obviously act as a single antenna are just that, claims -- and claims that aren't supported by the factual record.
By which you mean the factual record in the court proceedings leading to this case. The laws of physics are much more reliable than any laws contrived by man. We've seen dozens of fantastic claims of new antenna designs on these forums. The claim that a dime sized antenna, working purely on its own resonance plus amplification, can receive any given UHF and VHF signal after "tuning," is far more revolutionary than anything we've seen in the one-hundred plus year history of antenna theory. And in fact, there's nothing in Aereo's patent application that implies that.

I'm not even sure Aereo claimed anything like that in court. They just hired an expert to rebut claims made by the broadcasters' expert. Just good old-fashioned gamesmanship. Aereo's individual antennas are simply borrowing resonance from the neighboring antennas, and I haven't seen one claim in any Aereo ad that contradicts that. It's all a matter of slick wording.

The broadcasters challenged the independent functioning of the antennas in district court, and they lost badly. This was not merely some technicality of law where facts had to be ignored.
From what I've read, the broadcasters' expert sent a written deposition, whereas Aereo's rebuttal expert showed up in court, available for cross examination. For that reason, the judge accepted Aereo's rebuttal, and the Court of Appeals was unable to review her "finding of fact." The average layman would call this a technicality. I'm sure the average lawyer would call it critically important "rules of evidence."

It's conceivable that the broadcasters could try again, but any claims that the antennas obviously can't function independently and still work should be understood as bluster, given the broadcasters failed to present credible evidence of such, even with access to the equipment to conduct their own testing.
Or else they wanted a broader ruling, rather than one tied to Aereo's technology, and plan to retry (maybe even with different plaintiffs) if they lose at this level.

The question of public vs. private performance doesn't even depend on whether there are individual antennas for each user.
But individual antennas reflect on whether Aereo is a cable company, and should have to pay retrans fees under the Cable Act, or so it seems to me. Don't you agree? (I admit I haven't read the Cable Act.)

I really thought your analysis was superb, and appreciate any insight you can bring to the thorny issues in this fascinating case.

TIA,
Rick
 
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#13
#15
I wonder how long it will take for "Mr Greenfield" to stop by for his dinner of crow.

The dissenters (Scalia,Alito, Thomas) basically held that, if Aereo was smart enough to find and exploit a loophole in the existing law, then it was not up to the Court to close that loophole, but it was rather Congress' responsibility to close it.
 
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MrPogi

Moderator, , Webmaster of Cache Free TV
Staff member
#16
I am in agreement with the dissenters, it is up to congress to plug loopholes, not SCOTUS. I'm surprised that the dissenters are the conservatives...
 
#18
This result is very close to what I predicted above, when I said: "I think they should remand, because I think Aereo is a cable company under the '92 definition." The court held that Aereo is, essentially, a cable company, and further concluded that:
SCOTUS Decision said:
Aereo "perform" petitioners' copyrighted works "publicly," as those terms are defined by the Transmit Clause. We therefore reverse the contrary judgment of the Court of Appeals, and we remand the case for further proceedings consistent with this opinion.


Despite all the poorly informed headlines, the Supremes did NOT decide that Aereo was "illegal," or that it should pay copyright royalties, or even that they violate copyright. The decision never even got to the 1992 cable act that created the retransmission fees in question. It merely reversed the decision of the 2cnd Circuit court, based on the '76 copyright amendment, and remanded so they can either grant the injunction originally sought by the networks, or find a better reason to deny. The SCOTUS opinion was deliberately written very narrowly.

It's not clear at all that Aereo must stop what they're doing, or start paying retransmission fees. As the network's attorney said in oral arguments,
Clement said:
... I think it's very important to to understand that even if they're a cable company, it doesn't make all these problems go away. Because they would be a cable company that by very virtue of what they want to point to, which is their user specific copies, I don't think they would qualify for the compulsory license. [emphasis added]
So neither side wanted this decision, and as Aereo CEO Chet Kanojia said today, "We are disappointed in the outcome, but our work is not done." And as Lyle Denniston, who has covered the Supreme Court for fifty-six years stated here: "The Aereo case will now return to lower courts, and it appears that Aereo may have some opportunity there to salvage some of what it offers to its customers. Whether that would still make use of the system of small antennas, taking TV programs off the airwaves, is not clear at this point." [emphasis added]

Unfortunately, Aereo isn't run by one man, or by legal niceties. It's a corporation, and it appears the investors are running for the hills. Quoth Aereo's chief stockholder,
Barry Diller said:
We did try, but it's over now ... It's not a big loss for us, but I do believe blocking this technology is a big loss for consumers ... I only salute Chet Kanojia and his band of Aereo'lers for fighting the good fight.
And Standard & Poor's says,
As a result of the ruling, we believe Aereo will likely cease offering its service.
Meanwhile, the networks are gloating. National Association of Broadcasters President said,
Gordon Smith said:
Aereo characterized our lawsuit as an attack on innovation; that claim is demonstrably false. Today's decision sends an unmistakable message that businesses built on the theft of copyrighted material will not be tolerated.
Needless to say, the word "theft" occurs nowhere in the decision. However, even Scalia, said in his dissent,
I share the Court's evident feeling that what Aereo is doing (or enabling to be done) to the Networks' copyrighted programming ought not to be allowed. But perhaps we need not distort the Copyright Act to forbid it. As discussed at the outset, Aereo's secondary liability for performance infringement is yet to be determined, as is its primary and secondary liability for reproduction infringement.[emphasis added]
If lower courts eventually find that Aereo can continue without paying fees, Scalia describes that as a "loophole" which should be addressed by Congress.

Rick
 
#19
Do you think Aero will stay in business, or that we'll see an off-shoot that takes this decision into account to deliver the same or similarly based services?
 

MrPogi

Moderator, , Webmaster of Cache Free TV
Staff member
#20
In my inbox this morning:
STATEMENT FROM AEREO CEO AND FOUNDER CHET KANOJIA ON UNITED STATES SUPREME COURT DECISION

Court decision denies consumers the ability to use a cloud-based antenna to access free over-the-air television, further eliminating choice and competition in the television marketplace
New York, New York (June 25, 2014) - The following statement can be attributed to Aereo CEO and Founder, Chet Kanojia:
"Today's decision by the United States Supreme Court is a massive setback for the American consumer. We've said all along that we worked diligently to create a technology that complies with the law, but today's decision clearly states that how the technology works does not matter. This sends a chilling message to the technology industry. It is troubling that the Court states in its decision that, 'to the extent commercial actors or other interested entities may be concerned with the relationship between the development and use of such technologies and the Copyright Act, they are of course free to seek action from Congress.' (Majority, page 17) That begs the question: Are we moving towards a permission-based system for technology innovation?"
"Consumer access to free-to-air broadcast television is an essential part of our country's fabric. Using an antenna to access free-to-air broadcast television is still meaningful for more than 60 million Americans across the United States. And when new technology enables consumers to use a smarter, easier to use antenna, consumers and the marketplace win. Free-to-air broadcast television should not be available only to those who can afford to pay for the cable or satellite bundle."
"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)"
"We are disappointed in the outcome, but our work is not done. We will continue to fight for our consumers and fight to create innovative technologies that have a meaningful and positive impact on our world."
Yours truly,

Chet Kanojia

Founder & CEO
 
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