Aereo: Broadcasters’ Challenge ‘Imperils’ Cloud Computing

Aereo, the startup service offering digital streams of broadcast TV signals, challenged the networks’ interpretation of the Copyright Act in a brief filed on Wednesday to the Supreme Court, arguing that such a rationale would “turn cloud storage providers into infringers.”

In a statement, Aereo founder Chet Kanojia even said that the consequences for the cloud industry are “chilling” if broadcasters win, a claim that stations and networks have dismissed.

“The long-standing landmark Second Circuit decision in Cablevision has served as a crucial underpinning of the cloud computing and cloud storage industry,” Kanojia said. “The broadcasters have made clear that they are using Aereo as a proxy to attack Cablevision itself. A decision against Aereo would upend and cripple the entire cloud industry.”

An appellate panel in 2008 upheld the legality of Cablevision’s offering of a remote DVR, a decision that was a blow to broadcasters and studios.

The Supreme Court will hear oral arguments in the case on April 22, as stations seek to shut down Aereo for offering streams of their signals without permission.

Aereo contends that its service is a private performance, offering one-to-one transmissions into homes, with subscribers essentially playing their own personal recording. Subscribers are assigned individual, remote antennas.

Networks contend that Aereo is violating the public performance provisions of the Copyright Act. But Aereo says that it is the subscribers who are making their own personal recording, as the broadcast signal is transmitted to households after a brief recording delay.

“The Copyright Act makes clear that the act of playing a recording is a performance distinct from any performance from which the recording was made,” Aereo said in its brief. “Because the performance embodied in each transmission from Aereo’s equipment — the user’s playing of her recording — is available only to the individual user who created that recording, the performance is private, not public.”

Aereo also warns that the broadcasters’ interpretation of the Copyright Act would “imperil” cloud computing because “their position depends on aggregation of all the individual transmissions and individual performances of a program by consumers using Aereo’s system.”

Aereo also takes aim at the description of its service as a “Rube Goldberg” device, or a “clever way to take advantage of existing laws.”

“But designing technologies to comply with the Copyright Act is precisely what companies should do,” Aereo said. “If petitioners believe a technology that operates within existing laws to allow individual consumers to watch television shows petitioners have offered for free is causing them economic harm, they are entitled to ask Congress to change those laws.”

The U.S. Solicitor General and the Copyright Office are siding with broadcasters in the case. In a brief filed earlier this month, they challenged the notion that a ruling against Aereo would threaten cloud computing.

“One function of cloud computing services is to offer consumers more numerous and convenient means of playing back copies that the consumers have already lawfully acquired,” their brief stated. “A consumer’s playback of her own lawfully-acquired copy of a copyrighted work to herself will ordinarily be a non-infringing private performance, and it may be protected by fair-use principles as well.”

Aereo’s service, “by contrast, enables subscribers to gain access to copyrighted content in the first instance — the same service that cable companies have traditionally provided.”

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