Understanding the Aereo Case

May 14, 2014

BY:

Neil J. Rosini

The Supreme Court's decision likely will turn on whether the service offers private or public performances of TV programs.

On April 22, the Supreme Court heard oral argument in the case of American Broadcasting Companies v. Aereo in which 17 media companies including NBC, CBS, FOX, Telemundo and PBS are challenging Aereo’s right to capture local over the air television programs and retransmit them to its customers over the internet.  Aereo seeks no permission from the broadcasters and makes no payment to them on the premise that the configuration of its hardware results in a “private performance” of the television programs to its customers, which copyright owners don’t control.  This poses an economic threat to local stations in large markets, which receive substantial fees from cable companies for the right to retransmit their signals.  Aereo contrasts its service with “public performances” that can result, under copyright law, from transmitting a program to the public. (The term “public performance” also embraces showing a program in a public place, but that type of performance is not relevant here.)  When a customer using Aereo’s service asks to “watch” or “record” a program, Aereo assigns one of thousands of miniature antennas (each about the size of a dime) to fulfill the order. The antenna collects the TV broadcast signal of the selected show and transmits it to Aereo’s digital video recorder, which makes a unique copy for each request.  If the customer selected “watch,” the recording device transmits what Aereo considers a “personal copy” of the program over the internet to the home TV or mobile viewing device of the customer almost contemporaneously with the TV broadcast.  If the customer selects “record,” the program is stored until the customer chooses to see it.  Either way, says Aereo, the hardware only operates at the direction of a customer and delivers a unique copy that no other customer can see, as if the customer were simply using a personal remote antenna and remote video recorder rented out by Aereo, resulting in a private performance on the television or mobile device of the customer.  From Aereo’s perspective, its service is like any other cloud storage except that instead of uploading content from her own device, the customer directs Aereo’s antenna and recording equipment to capture the program from free over the air transmissions, which are accessible to anyone. Accordingly, Aereo says that when using its service, the user supplies her own content using Aereo’s equipment, not Aereo.  The plaintiff broadcasters, on the other hand, argue that Aereo is like any cable company that collects local broadcasts through an antenna and retransmits them to its subscribers.  Unlike Aereo, many of them pay substantial fees to broadcasters for the privilege of doing so because a transmission that carries the program from the cable company’s antenna to the public is an unlawful public performance when made without express permission.  They argue that by making thousands of programs available to thousands of Aereo customers in a commercial enterprise, Aereo is indeed transmitting “to the public” thousands of infringing public performances and that Aereo’s Rube Goldberg design should not distract the Court from its theft of their property.  The Second Circuit Court of Appeals, which had the case before it went to the Supreme Court, sided with Aereo.  The Supreme Court now has to decide whether or not the broadcasters have the better argument. If so, will the Court frame an opinion that doesn’t do collateral damage to cloud storage generally? And if broadcasters lose their appeal, will some of them abandon over the air broadcasting, as they have threatened?  A decision is expected by the end of June.  For more information, please contact Neil Rosini at nrosini@fwrv.com.