Can Anything Be Done To Make Aereo Legal Again?

AEREoantennaeContent streaming company Aereo “paused” all operations this past Saturday, after losing their case in the Supreme Court last week. Today, the company’s CEO, Chet Kanojia, sent an e-mail to subscribers asking for their support and entreating them to “make [their] voices heard” with lawmakers in order to bring Aereo back. But he didn’t say what, specifically, loyal customers should ask their lawmakers to do. So in the wake of last week’s ruling, what law would have to change in order to make Aereo legal?

There’s really only one law that Aereo has officially now fallen afoul of, and that’s the U.S. Copyright Act. The legal case took a few different angles of approach to the arguments, with broadcasters arguing every form of copyright violation they could think of. In the end, though, both the Court’s opinion and the dissent focused on one very specific aspect of copyright law: public performance.

The History Behind The Supreme Court’s Ruling
Forty years ago, the Court would have agreed with Aereo. And in fact, as the Aereo ruling explains, they did.

Back in the Laugh-In era, the Supreme Court heard two particular cases relating to what we would now think of as the early cable companies. Cable got started with CATV operators serving non-urban areas by capturing broadcast signals with big antennas and then retransmitting them to subscribers’ homes via coaxial cable.

Broadcasters didn’t like new technologies being used to move their content around any better in the 60s than they do today, and they filed lawsuits. But in Fortnightly Corp. v. United Artists Television, Inc (1968) and Teleprompter Corp. v. Columbia Broadcasting System, Inc. (1974), the Court decided that the nascent cable industry was a-ok under the law.

The Court at the time ruled that CATV was not acting as a performer, but as a viewer. The Aereo ruling [PDF] quotes the earlier ruling, saying:

β€œThe reception and rechanneling of [broadcast television signals] for simultaneous viewing is essentially a viewer function, irrespective of the distance between the broadcasting station and the ultimate viewer.” … The Court also recognized that the CATV system exercised some measure of choice over what to transmit. But that fact did not transform the CATV system into a broadcaster. A broadcaster exercises significant creativity in choosing what to air, the Court reasoned.

So what changed between 1974 and 2014?

The Copyright Act of 1976
Congress, no doubt after some heavy lobbying from broadcasters, took a look at the SCOTUS rulings and tech trends of the 1970s and decided to change the law.

The Copyright Act of 1976 was a huge new set of legislation that is still the basis for most copyright law today. (Additions, like 1996’s Digital Millennium Copyright Act, sort of sit on top of the 1976 Act.) And that law is full of language explicitly crafted to change and regulate the legality of retransmitting copyrighted material.

There’s a very specific piece in the law as currently written, called the transmit clause. That clause says that, “The concept of public performance covers not only the initial rendition or showing, but also any further act by which that rendition or showing is transmitted or communicated to the public.” And performing something, in terms of broadcast material like TV programming, is defined as β€œ[showing] its images in any sequence or [making] the sounds accompanying it audible.”

So legally speaking, ever since the 1976 Act went into effect, if you can see or hear something, it’s being performed at you.

Cable companies already fall under the scope of this law. There’s a whole section of the Copyright Act, section 111, that sets out the licensing scheme that broadcasters and retransmitters (cable companies) now use to legally build their carriage contracts.

Aereo argued that because of their banks of individually-rented antennas, their performance should be considered private (like using your own VCR or DVR to record a show) and not public. But the Court basically found that Aereo has an “overwhelming likeness” to cable companies, and therefore is subject to the same laws.

If Aereo is going to continue to operate, therefore, either they need to change… or the U.S. Copyright Act needs to.

Changing the Law
The dissent in the Aereo ruling points out that there are inconsistencies, or at least some confusing logic, in the existing copyright law. There are so many new technologies with unclear roles — cloud-based streaming and DVR systems among them — under the categories we have now that systems like Aereo fall into a murky territory, neither one thing nor the other.

“It will take years, perhaps decades,” the dissenting Justices wrote, to determine how new and upcoming technologies fit into the rubric.

“What we have before us must be considered a ‘loophole’ in the law,” the dissent continues. “It is not the role of this Court to identify and plug loopholes. It is the role of good lawyers to identify and exploit them, and the role of Congress to eliminate them if it wishes.”

It is entirely possible, and perhaps even likely, that we will see a large-scale, loophole-closing change to U.S. copyright law in the future as we did in 1976 and 1996. Technologies and culture change, and eventually the law will have to adapt to regulate a world that was not yet imagined when it was first written.

But it sure as heck isn’t going to happen any time soon.

The RIAA, MPAA, and National Association of Broadcasters (NAB) are all canny spenders in Washington, DC. The NAB, in particular, is one of the largest political contributors in the country, according to the Center for Responsive Politics.

Narrowing copyright law is not in the interest of any company that stands to make fistfuls of money from owning the copyrights on material. That includes every company that those three organizations represent. There are many industries and businesses, and a lot of cash and power, tied up in maintaining — or even narrowing — the status quo.

There are some bills currently in the House and Senate relating to copyright issues, but both are very narrow in scope, and relate specifically to music royalties. Also, neither is particularly likely to become law.

There are also changes to copyright regulation contained in the Trans-Pacific Partnership treaty, but those also would make the law more, not less, restrictive. The treaty is also a political quagmire, at home and abroad, and it’s hard to say when, or if, it will ever apply — and in what form.

The current Congress is also historically unproductive, getting very few bills to the floor and passed. The 114th Congress, the one that starts in January, 2015, may or may not be any better.

So changing the law in the near term looks to be a Sisyphean task. Aereo would have to muster a large, concerted coalition to make concrete demands. They would then need a number of other businesses and industry lobbying dollars on their side, in order to fight against the likes of the NAB and interests like Comcast, all of whom would prefer a new law to go the other way. Could it happen? Maybe. Could it happen in the next five years? Nope.

That leaves one likely path.

Changing Aereo
Aereo’s business model was a good idea, speaking to a growing market of consumers. And like any good idea, other companies have been trying it, too.

One company, called FilmOn, always describes itself as “the controversial start-up” and with good reason. They’ve been in operation with a streaming service in the U.S. since 2010, and have been the subject of lawsuits for just as long. Their “teleporter” TV service is essentially identical to the kind of streaming and on-demand over-the-air content Aereo offered.

However, FilmOn has long taken the opposite approach to content licensing that Aereo has. The company has said for many years that they actually want to be treated like a cable company, and would be happy to enter carriage agreements with broadcasters.

In various lawsuits, broadcasters have argued that FilmOn both is and is not a cable company. In a press release, the company points to the Aereo ruling to say that, once and for all, they should in fact be treated the same way a cable company is.

FilmOn has filed with the U.S. Copyright Office for section 111 license, hoping to become part of that big, licensed, regulated field of authorized retransmitters. They filed for that license in 2011 also, but their request went nowhere — neither granted nor denied.

Until then…
Aereo has the king of all uphill battles ahead of them if they want to get Congress to change the U.S. Copyright Law. And that makes things more challenging for consumers, too.

Cable is still popular in part because it’s easy. For cord-cutters, though, there are still options. If you’re pining for the Aereo that could-have-been, then it might be time to make your own at home. Otherwise you’ll have a decade’s worth of backlog to catch up on before Congress makes a change.

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  1. dullard8 says:

    Excellent piece, Kate.