Tuesday, April 22, 2014

American Broadcasting Companies, Inc. v. Aereo, Inc.

  Bruce Springsteen back in 1992 sang a song called "57 Channels (And Nothin' On),” NPR this morning commenting on his being ahead of his times with our now having hundreds of channels -- like it or not --- most are part of your basic cable package --- bringing us to the “economic model  challenged today in the Supreme Court in a high-stakes legal battle between the broadcast television networks and a tiny startup, or at least tiny by broadcast standards.

  “The issues focus on copyright law,” NPR relates, “but the outcome could alter the face of broadcasting in the United States (with) the economic threat being so serious that two major networks, CBS and Fox, having said they would consider abandoning over-the-air free broadcasting if they lose, and instead broadcast only on pay cable channels -- the NFL and Major League Baseball similarly threatened to abandon broadcasting on free local channels.”

  “The essence of the legal argument,” the NPR article continues, “is Federal law requires that anyone rebroadcasting what is known as a ‘public performance’ — let's say NCIS, Modern Family, or the local news — is required to pay copyright fees. Those rebroadcasting fees provide an estimated $4 billion for the networks this year and double that amount in four years.

  “Enter Aereo Inc., with a novel idea and a new small, dime-sized antenna that picks up over-the-air signals of the network affiliate in New York, Atlanta, Boston and eight other cities. The antennas are centralized on circuit boards at Aereo locations in each city and activated remotely by individuals with an Aereo subscription. Using this system, subscribers can live-stream local stations and record programming onto a mobile device or a TV for a fraction of what it would cost to watch via cable — $8 a month for 20 hours of storage, $12 for 60 hours.

“… does the law allow a company like Aereo to essentially skim the network and local programming cream off for its own use without paying for it?

  ScotusBlog as always has its wealth of background & documentation, with Lyle Denniston & Amy Howe having previewed the case last week. Denniston had also posted earlier observations last October.  Newsweek and the L.A. Times were among those with  articles this morning.  

  The networks obviously said “no” observing that their programming costs lots to produce, and local stations pay lots for it, in addition to spending big bucks on local news and other programming. Erin Murphy, one of the lawyers representing the networks, says that what Aereo is doing has nothing to do with the public good, but circumventing copyright law. "If Aereo can do this, there's really no reason that a cable or satellite company can't turn around and create their own Aereo-like workaround.”

  Reuters, this afternoon following oral arguments on the case, reported “U.S. Supreme Court justices appeared unsure whether to rule against online TV startup Aereo Inc in the major copyright case, with several raising concerns about how a ruling in favor of broadcast networks could affect increasingly popular cloud computing services (and) the larger concern appearing to be the possible broader implications of a ruling against the company.

  “Several justices appeared troubled about a ruling that would deal a blow to increasingly popular cloud computing services in which personal files - including TV shows and music - are stored remotely on the Internet on servers from companies such as Google Inc, Microsoft Corp, DropBox Inc and Box Inc.”

  Justice Stephen Breyer told the networks' attorney, Paul Clement, that his legal argument "makes me nervous about taking your preferred route."

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