Photograph by Andrew Harrer/Bloomberg
Paul Clement, lawyer arguing before the U.S. Supreme Court on behalf of American Broadcasting Companies Inc., in Washington, D.C., U.S., on Tuesday, April 22, 2014.
The Supreme Court has decided setting up hundreds of tiny antennas, capturing television signals, and charging people to watch is a public performance. And so ends the dream of Aereo, the Internet startup that thought it had found a clever way past copyright laws and spent its short lifespan battling broadcasters in the courts for its right to exist.
In legal terms, the 6-3 decision argues that Aereo violates broadcasters’ copyrights by distributing their work without their permission. The decision, delivered by Justice Stephen Breyer, says the court was unconvinced by Aereo’s argument that it was an equipment provider allowing people personal access to content they were legally allowed to access. Aereo’s business model—in which broadcasters received no fees from the startup—has been belittled as a Rube Goldberg contraption to get around copyright law. The Supreme Court ruling said that only “behind-the-scene technological differences” separated Aereo from cable providers.
This decision doesn’t keep companies from taking broadcast content and sending it over the Internet, it only requires that such companies get the permission of the companies that hold the copyright to this content. Cable-TV companies and satellite TV services will pay $4 billion in so-called retransmission fees to broadcasters this year, according to SNL Kagan. This decision defends that status quo.
The court also stressed that this decision was really about Aereo and that the company’s claims that the entire cloud-computing industry would be in danger if it lost are unwarranted. In a statement, the broadcasters said the decision was a “victory for consumers.”
Aereo has said that it didn’t really have a Plan B if it lost in court, so the question now is how—or if—it forms one now. The company has raised $100 million, and Internet television is still a huge opportunity. It stands to reason that Aereo will continue to try to capitalize on this, especially given the cache earned by playing the role of innovator in the Battle for the Future of Television.
