Supreme Court Says Aereo Business Illegal
posted Saturday Jun 28, 2014 by Nicholas DiMeo
So, Aereo is dead. Yes, the innovative over-the-air video-streaming service that won us over with its edgy, boundary-pushing business model has been ruled illegal in the Supreme Court hearing this week. The decision, which was split 6-3 and overturned a lower court's decision, says that Aereo's business practices infringe on copyright law because the company acts almost identical to a cable company but Aereo hasn't been subjected to the same broadcaster fees as said cable companies.
This kind of affects the future of innovation in the TV and broadcasting spaces. Luckily, the Supreme Court maintained that only the current business practice for Aereo are illegal. The company could essentially negotiate rights with the broadcasters, but they probably won't considering both sides really haven't been seeing eye-to-eye.
Chief Justice John Roberts had this to say about the decision,
Your technological model is solely based on circumventing legal prohibitions that you don't want to comply with. There's no reason for you to have 10,000 dime-sized antennas except to get around the Copyright Act.
Technically speaking, he's right. However Aereo, even after shutting down on Saturday at 11:30 a.m. Eastern, maintains that it's not infringing on anyone's copyright laws by simply retransmitting over-the-air broadcasts. Customers are merely paying for the hardware required to do so, and not for the transmission itself.
How does this affect you? Well, if you were an Aereo subscriber, you're not any longer. The company issued refunds to every subscriber for the past month of service. The company is effectively shut down for right now as it evaluated what to do next. Aereo's CEO Chet Kanojia explained where Aereo stands right now.
On Wednesday, the United States Supreme Court reversed a lower Court decision in favor of Aereo, dealing a massive setback to consumers. As a result of that decision, our case has been returned to the lower Court. We have decided to pause our operations temporarily as we consult with the court and map out our next steps.
What if you're not an Aereo subscriber? If you're not akin to the greatness that was Aereo, you still should be looking intently into this decision. That's because while not much will change to those who simply watch cable or satellite TV, the decision could mean that the same over-the-air broadcasts that right now are free to the public could no longer be free in the future. Konojia continued in his blog post to say,
The spectrum that the broadcasters use to transmit over the air programming belongs to the American public and we believe you should have a right to access that live programming whether your antenna sits on the roof of your home, on top of your television or in the cloud.
To that end, he's actually right. Who's to say that certain broadcasters could decide to go after bars and pubs for even higher rates for their transmissions? Or even still, those same broadcasters could start charging license rights to TV antenna manufacturers for simply making a product that allows you to view the content. I know it seems like a stretch right now, but those scenarios are completely possible.
The slightly good news is that the decision only actually applied to live signals and not recorded ones. CEO of the CEA, Gary Shapiro said that, "there is wiggle room in the Aereo decision" and that the Courts "do not like what Aereo is doing" which is why they made the decision they did. Shapiro added that it's not the end of cord-cutting but cable companies are becoming "increasingly irrelevant" and beating up on Aereo isn't going to change that.
In the end, the copyright laws were never intended to foresee this type of innovation and Shapiro did go on to say that it's currently being looked at in Congress to try and remove these ambiguous laws so that the Aereos, Airbnbs and Ubers of the world can actually grow and thrive. The Supreme Court also said that it will convene over these type of copyright issues on a "case-by-case basis" so that maybe another company can come along and will have the support of the Court if they handle business in a slightly different way. Still, all of this kind of feels like we hit a brick wall as a nation and it's hard to see the light at the end of the tunnel. It seems like there is those who favor copyright and content protection against those who favor advances in technology. Can't there be a balance between the two?
"The world hates change, yet it is the only thing that has brought progress." - Charles Kettering, inventor, entrepreneur, innovator & philanthropist