Gurumurthy Kalyanaram on Lawsuits and Policies: the US Supreme Court’s Position on Aereo’s New Broadcast Technology

Gurumurthy Kalyanaram reports on lawsuits and policies and in this brief particularly on the US Supreme Court’s ruling on Aereo’s New Broadcast Technology in a lawsuit filed by the major broadcasting companies.

Aereo’s used satellite technology and broadcast TV signals for free, and the broadcasting companies filed a lawsuit arguing that Aereo was obligated to pay licensing fees to the broadcasting companies. While Aereo found a sympathetic audience in the Second Circuit Appellate Court, the US Supreme Court ruled against Aereo.

Aereo’s basic technology is as follows.  Aereo uses countless individual antennas to grab broadcast TV signals out of the air for free, and then sell access to those signals to consumers over the Internet. With the service, you could record the CBS Evening News and play it back to yourself online as if you were taping it with a DVR.

The fundamental dispute between Aereo and the Broadcasting companies, which gave rise to the lawsuit, is that Aereo's whole business is predicated on the idea that it could avoid paying the content licensing fees that cable companies and satellite TV operators have traditionally paid to broadcasters. Broadcasters didn't like the idea of an Internet startup wriggling out of those "retransmission" fees. So they sued, and the Supreme Court took their side.

The US Supreme Court ruled (6-3 majority ruling) that Aereowas in violation of copyright law when it streams over-the-air TV channels to consumers.  The Court affirmed: “These behind-the-scenes technological differences do not distinguish Aereo's system from cable systems, which do perform publicly.”  In his dissent, Scalia argued that Aereowas a “copy shop that provide(d) its patrons with a library card.”  Per Scalia, Aereo didn't transmit anything at all — its customers play the content to themselves, and so couldn't have violated copyright law.

Please refer to other articles by Gurumurthy Kalyanaram on lawsuit and policies on his website: www.gurumurthykalyanaram.com/public-policy-including-law-lawsuits.html