Aereo’s Supreme Loss Doesn’t Handcuff Anyone Except Aereo

Aereo's Supreme Loss Doesn't Handcuff Anyone

There’s plenty of hand-wringing in the wake of Aereo’s defeat before the U.S. Supreme Court about the ruling’s allegedly devastating implications for technology “innovation.” But the only people stifled by the narrowly tailored decision are those that have the bright idea of trying to get something for nothing.

With the Aereo decision, “the court threw a legal shadow over a slew of other tech-driven companies,” the Los Angeles Times said in an editorial, which wondered, “Did the justices really understand Aereo?”

Aereo CEO Chet Kanojia, going down swinging, said his company’s definitive legal defeat “sends a chilling message to the technology industry.” He also posed a hypothetical question: “Are we moving towards a permission-based system for technology innovation?”

The Supreme Court’s unequivocal answer to that was: Yes, if you are a business trying to make money from someone else’s copyrighted content, you need permission.

EARLIER: Why a Loss for Aereo Wouldn’t Threaten Cloud Services

Look, I could innovatively copy-and-paste the entire contents of the L.A. Times and sell access to it — and dozens of other news websites — in, say, a Google Android TV app for a monthly fee. I’m not sure how many people would pay for that, but I never completely understood why Aereo was a terribly appealing service, either (unless you were too cheap to pay a couple bucks more for basic cable service and a Slingbox).

Like Aereo, all I’d be doing with my innovative Android TV app is letting users access something they already can freely access on the Internet on a different device, right? But I don’t think the L.A. Times would be OK with that.

The Aereo case, however, was particular to TV. Congress, through the Copyright Act, requires service providers to obtain permission to retransmit TV signals.

The Supreme Court correctly disregarded the specious arguments by Aereo’s lawyers that its service was somehow technically different: “Congress would as much have intended to protect a copyright holder from the unlicensed activities of Aereo as from those of cable companies,” Justice Stephen Breyer wrote in the majority opinion.

Don’t like the law? Turns out that circumventing it is not always the right way to effect legislative change.

Meanwhile, the Supreme Court specifically — and prudently — said the Aereo decision has no bearing on cloud-based storage services, network-based DVRs or other “technologies not before us.” The majority opinion agreed with the Solicitor General’s position that how those apply to the Copyright Act “should await a case in which they are squarely presented.”

Some hand-wringers read that as an invitation for media companies to launch new attacks on cloud services, or other technologies — like Dish Network’s Slingbox-enabled Hopper DVR.

Indeed, Fox filed a brief Wednesday in its litigation against Dish claiming that the satcaster’s Internet-slinging DVR “has repeatedly raised the same defenses as Aereo which have now been rejected by the Supreme Court.”

But this is a red herring. Dish, in its reply to Fox’s filing, pointed out that the Supreme Court’s decision was based on the fact that Aereo “transmits to large numbers of paying subscribers who lack any prior relationship to the works.” Or, as the Solicitor General put it, Aereo “provides a means by which consumers can gain access to copyrighted content in the first instance.”

A Dish subscriber has already paid for the rights to the content, and fair-use provisions of copyright law protect whatever he or she does with that content for personal use. Fox’s argument is that Internet-streaming of its content is prohibited under its licensing agreement with Dish. But networks will have trouble challenging Sling technology, because they didn’t raise any legal challenges to it when it launched almost a decade ago.

Aereo’s investors — which threw $97 million into the venture — took a calculated risk that the legal gambit would succeed. It didn’t, and “now it’s over,” said IAC chairman Barry Diller, one of its major backers. He also noted that “it’s not a big (financial) loss for us.” Shrug. Next project.

Cable and satellite TV companies were secretly, and in some cases openly, rooting for Aereo to win. That’s because they believed that if Aereo prevailed, they would gain leverage over broadcasters in retransmission-consent negotiations.

But ultimately, a crafty legal end-run is not the way innovation — or retrans reform — will come to bear in the TV business.

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  1. dback40 says:

    …”the Supreme Court specifically — and prudently — said the Aereo decision has no bearing on cloud-based storage services, network-based DVRs or other “technologies not before us.” That will change now that precedence has been established.

    …”unless you were too cheap to pay a couple bucks more for basic cable service and a Slingbox”. It’s less about being a cheap than it is about having choices – those of which are dwindling at the same record pace as the industry is consolidating (monopolizing). Make no doubt about it, when there are a handful of companies who control the pathways to content, there will be censorship on a global scale unlike anything we have seen before. Will you be willing to pay a middle man Todd, so your articles can reach any viewership or would you prefer to be bunched in with the “also-rans”?

    I’m not overly devastated by the loss of Aereo but I am overly disturbed about what this will all look like a year from now. Already there are challenges to the cloud, YouTube will begin experimenting with pay for content, and small technology content providers are either running for hills or subversively offering solutions via open source to receive transmissions illegally. This decision has shown that the highest court will side with the establishment on any given day, only emboldening the current structure even more. The content highway has now become too big to fail. As such, the rest of us are indebted to a life or servitude to the Comcast’s of the world. I’m not sure how things should be but can spot a bad deal miles away – this is one of them. By month’s end I’m going to cut all services and move to the islands. As much as I’ve embraced technology over the years, I am beginning to be disdainful of what it is doing to out culture. I share the same sentiment as jhs39, ‘People should be disgusted by this ruling and also by people like the writer of this article who make it seem like this is the way things should be.”

  2. jhs39 says:

    Lower court after lower court after lower court ruled that Aero was not doing anything illegal, but even while this was happening Variety and other business publications assumed that the Supreme Court would ultimately reverse all of these rulings. It’s not because the Supreme Court is looking at a different set of facts or ruling on a different set of laws–it’s because the Supreme Court routinely rules in favor of the rich and powerful irregardless of the actual law and the fact that they do this has become completely predictable and accepted. People should be disgusted by this ruling and also by people like the writer of this article who make it seem like this is the way things should be. Or maybe the writer of this article just thinks the Supreme Court justices are much smarter than all of the lower court judges who ruled in Aero’s favor?

  3. jhs39 says:

    The something for nothing referred to in this headline is over the air television broadcasts which are supposed to be free in the first place. What Aero was doing should have been legal based on precedent–all they were doing was making it easier for people to access program streams that were supposed to be free in the first place. Our government and our legal system are both so hopelessly corrupted by money that broadcasters now have a legal right to charge cable and satellite subscribers for programming that is supposed to be free, and they got that dubious right strengthened by the decision to stop an alternative service that helped people access that supposed to be free programming at a much lower cost. The writer of this article is an idiot in thrall to the influence of the broadcast industry. There was no legal basis whatsoever for shutting down Aero–it was just another example of how the rich get whatever they want in today’s America regardless of the law and regardless of what’s best for the majority of people in the country.

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