The Supreme Court has reversed a major decision made by the Second Circuit Court in the case of ABC v Aereo. Essentially, this makes Aereo illegal, and that’s a bad thing for a multitude of reasons.
But first we should explain what Aereo is.
What Is Aereo?
Aereo amounts to being a digital television antenna and cloud based DVR system. The difference with Aereo being that it does not require the user to set up any sort of hardware in your living room, or on your roof. The Aereo system assigns you a personal “mini” antenna on one of the companies antenna farms, and then streams the content that comes in over the cloud through your favorite set-top box like a Roku, Chromecast, Apple TV, or your favorite browser. This works much in the same way television work not so long ago before the advent of streaming systems and the influx of cable. In the old day you would stick a pair of cheap “rabbit ears” on your television and be able to pick up the “free” signals from the big television networks.
The Problem?
Well, the major television networks are not to keen on this idea. In fact, it is safe to say that they hate everything about it. But, why? Why would they be against something that people have been essentially doing since the advent of television? NBC, CBS, ABC and FOX all broadcast over the air making them technically free to anyone who can pick up their signals. I for one don’t have cable and use a really cheap $10 digital antenna to watch live television we I need to.
The problem that the networks and their cable monopoly friends have is that the “Big Four” are viewed through most people cable service (my digital antenna being in the minority) and because of this, whether you pay for cable, satellite, or even fiber to watch television, part of your monthly bill goes into the picket of those four networks. Aereo becomes a problem to these networks because it circumvents this deal, not paying the upwards of eight dollars it would have to pay the networks on a monthly basis.
The Ruling Says?
The Supreme Court has made a ruling that states while the Aereo service may present itself as a provider of equipment to watch television (much like the digital antenna many people currently use), it is in fact a cable company. The big point that the Supreme Court pointed to being the “Public Performance,” which says that the Aereo service is intended for large audiences and not for simple at home viewing. This of course would violate the terms of service networks have and thus force Aereo to have to “pay for the privilege,” to broadcast shows.
This decision is walking a dangerous line, one that if crossed we can never jump back over. The Aereo service has been following the laws set forth, so it is difficult how people sitting in the comfort of their own homes constitutes “public performance.”
It must be noted that this decision from the Supreme Court was not a unanimous one, with the strongest words of dissent coming from Justice Scalia:
… Aereo does not “perform” at all. The Court manages to reach the oppostie conclusion only by disregarding widely accepted rules for service-provider liability and adopting in their place an improvised standard (“looks-like-cable-TV”) that will sow confusion for years to come.
This is a decision that doesn’t just affect Aereo and its users. The ruling hurts any small tech start-up looking to create and develop any future technologies revolving around cutting the cord from Cable companies. The more a service resembles a cable provider (even by the loosest of definitions) the high the chances of it being shut down. Essentially, the suture of technology and how we watch television will be dictated by the cable companies and their lobbyists in Washington.
This ruling serves not only to shut down Aereo, (It’s now dead in the water) but serves to scare away any company down the line that may want to throw a monkey wrench into the current system and take any sort of bite out the cable companies stronghold. If you want to survive, if you want to create technology in this sector, you will have to cut deals with the networks to pay to rebroadcast their content to your customer base.
This is a dangerous road we are walking down. Before you know it, even those digital antenna will become illegal as they become more prevalent. With streaming services on the rise the cable companies are moving swiftly to crush any service that doesn’t fall in line.
For those of you reading that are of a certain age, could you imagine if during the late 80’s and early 90’s if you had to pay a monthly fee just to be able to own a pair of “rabbit ears” for your television?
The Response From Aereo?
After the ruling Aereo CEO Chet Kanojia issued this response that they are not interested in shutting down and looking to fight this, even with limited avenues at their disposal:
“Today’s decision by the United States Supreme Court is a massive setback for the American consumer. We’ve said all along that we worked diligently to create a technology that complies with the law, but today’s decision clearly states that how the technology works does not matter. This sends a chilling message to the technology industry. It is troubling that the Court states in its decision that, ‘to the extent commercial actors or other interested entities may be concerned with the relationship between the development and use of such technologies and the Copyright Act, they are of course free to seek action from Congress.’ (Majority, page 17) That begs the question: Are we moving towards a permission-based system for technology innovation?
“Consumer access to free-to-air broadcast television is an essential part of our country’s fabric. Using an antenna to access free-to-air broadcast television is still meaningful for more than 60 million Americans across the United States. And 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.”
“Justice Scalia’s dissent gets its right. He calls out the majority’s opinion as ‘built on the shakiest of foundations.’ (Dissent, page 7) Justice Scalia goes on to say that ‘The Court vows that its ruling will not affect cloud-storage providers and cable television systems, see ante, at 16-17, but it cannot deliver on that promise given the imprecision of its results-driven rule.’ (Dissent, page 11)“
“We are disappointed in the outcome, but our work is not done. We will continue to fight for our consumers and fight to create innovative technologies that have a meaningful and positive impact on our world.”
Aereo is essentially dead in the water, but the company does intend to fight on. How they do this at this point is anyones guess.
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