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Supreme Court rules for broadcast networks, against Aereo

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On June 25, the Supreme Court announced its decision in the case of American Broadcasting Cos. v. Aereo, Inc., which decided whether copyright laws apply to a company that captures over-the-air local TV broadcasts and feeds them to users via the Internet in the same way that they apply to cable companies, who currently pay broadcast copyright fees for the same material. The justices decided by a 6-3 vote that “Aereo performs petitioners' works publicly within the meaning of the Transmit Clause of the Copyright Act of 1976.” Aereo must therefore either pay fees for retransmitting copyrighted material or cease operations.

The majority opinion was delivered by Justice Stephen Breyer and was joined by Chief Justice John Roberts and Justices Anthony Kennedy, Ruth Bader Ginsburg, Elena Kagan, and Sonia Sotomayor. A dissenting opinion was filed by Justice Antonin Scalia and was joined by Justices Samuel Alito and Clarence Thomas.

Writing for the majority, Justice Breyer said “[H]aving considered the details of Aereo's practices, we find them highly similar to those of the CATV systems... And those are activities that the 1976 amendments sought to bring within the scope of the Copyright Act. Insofar as there are differences, those differences concern not the nature of the service that Aereo provides so much as the technological manner in which it provides the service. We conclude that those differences are not adequate to place Aereo's activities outside the scope of the Act. For these reasons, we conclude that Aereo 'performs' petitioners' copyrighted works 'publicly,' as those terms are defined by the Transmit Clause.”

Writing for the minority, Justice Scalia said, “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. Congress can do that ... in a much more targeted, better informed, and less disruptive fashion that the crude 'looks-like-cable-TV' solution the court invents today.” He also compared the decision to Sony Corp. of America v. Universal City Studios, Inc. (1984), in which the Supreme Court came within one vote of banning VCR technology for similar reasons.

“National Association of Broadcasters is pleased the Supreme Court has upheld the concept of copyright protection that is enshrined in the Constitution by standing with free and local television,” the lobby group said in a statement.

“What this decision does is affirm the mold we have, that companies that spend billions on content for an expected revenue stream, is going to continue,” said Neal Katyal, a partner with the law firm Hogan Lovells and former acting U.S. solicitor general, who advised broadcasters in the case.

Chet Kanojia, Aereo's founder and CEO, said the ruling “sends a chilling message to the technology industry. When new technology enables consumers to use a smarter, easier-to-use antenna, consumers and the marketplace win. Free-to-air broadcast television should not be available only to those who can afford to pay for the cable or satellite bundle.” He also took offense at the Court's suggestion that those interested in developing such technologies should turn to Congress. “That begs the question: Are we moving towards a permission-based system for technology innovation?” Kanojia asked.

Aereo is currently operating in 11 markets. Subscribers pay an $8 monthly fee for the basic service, and can get DVR storage for an additional $4 per month per 20 hours of storage.

All of the major broadcast networks filed suit against Aereo, as did many local TV station owners. Each side has won several court cases at lower levels, opening up the opportunity for the Supreme Court decision.

From a philosophical libertarian perspective, copyright is a form of protectionism which infringes upon the exercise of physical property rights, and is therefore an invalid concept.

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