Supreme Court Agrees To Hear Aereo Case; Ruling Could Impact All Cloud-Based Tech

The Supreme Court announced this afternoon that it will hear the lawsuit filed by the broadcast networks against streaming video startup Aereo. How the court rules will have an impact not just on consumers’ ability to stream live network feeds online, but on all cloud-based media storage.

The heart of the networks’ argument against Aereo — a streaming video service that takes freely available over-the-air broadcast signals and provides them to paying customers online — is that the company is illegally retransmitting these signals without requesting permission or paying a fee. Cable and satellite providers pay billions of dollars every year to the networks just to provide channels to the customers that can be obtained for free with a decent antenna.

And that is exactly what Aereo contends its service provides — a virtual antenna connection. The company uses arrays of tiny antennae, with each antenna dedicated to a single subscriber. Thus, claims Aereo, the service is no different than running a rooftop antenna to get better TV reception.

Broadcasters filed multiple federal suits against Aereo but has so far failed to win any injunctions barring the service from launching. Meanwhile, Aereo availability has reached 10 markets, with more than a dozen additional markets set to launch in the near future.

In an attempt to just save everyone a lot of time and get to the inevitable, the broadcasters petitioned the Supremes in October to hear the case. Then in December, Aereo said it would not challenge that petition.

Well it seems like both sides got what they wanted today, with SCOTUS putting American Broadcasting Companies, et al v. Aereo on its slate of cases to hear in April.

If Aereo is victorious, it could have lasting repercussions to the business models for broadcast networks and cable operators.

Some broadcast executives have already threatened to pull their networks off the airwaves and go cable-only if Aereo wins. Meanwhile, some cable operators have already begun working on integrating Aereo-like technology into their systems in the hopes of getting around paying billions of dollars in retrans fees.

A bigger concern for American consumers may be the implications of a broadcasters victory in the case.

In their petition to the Supreme Court, the broadcasters take a rather radical stance on copyright, claiming that a “public performance” occurs whenever a service provider enables a consumer to transmit the same prior performance of a work, even if the consumer is independently transmitting a separate performance from his own separately acquired recording available to him alone.

That would seem to undermine numerous cloud-based storage and streaming services, like Amazon’s Cloud Player or Google Play that give customers to streaming files they have purchased, or Cablevision’s cloud-based DVR. That device was the subject of a broadcaster-filed lawsuit that never made it to the Supreme Court, leaving in place the 2008 Second Circuit court ruling that the DVR does not violate broadcasters’ copyright.

“This case is critically important not only to Aereo, but to the entire cloud computing and cloud storage industry,” says Aereo CEO and founder Chet Kanojia. “The landmark Second Circuit decision in Cablevision provided much needed clarity for the cloud industry and as a result, helped foster massive investment, growth and innovation in the sector. The challenges outlined in the broadcasters’ filing make clear that they are using Aereo as a proxy to attack Cablevision itself and thus, undermine a critical foundation of the cloud computing and storage industry… If the broadcasters succeed, the consequences to consumers and the cloud industry are chilling.”

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  1. GoldHillDave says:

    I’ve never understood how broadcasters can give away their product for free over the air and then turn around and charge cable companies to carry the same signal. I’d think that TV stations would WANT maximum exposure so as to maximize the value of their ads, and I’d think they’d be paying the cable companies to carry their signal rather than the other way around. What am I missing here?