Won’t Someone Think of the Cloud Services?
Won’t Someone Think of the Cloud Services?
Won’t Someone Think of the Cloud Services?

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    Public Knowledge has been filing briefs in Aereo's lawsuits (and in related cases like Film On) since the beginning, but the beginning was only 2012.  The litigation has made it to the Supreme Court very quickly, and it's going to take some time to digest exactly how the Justices react to the various arguments that are presented (such as the arguments in our joint brief).  But it's worth thinking about what the implications of Aereo might be for various industries, now that the purely legal arguments have all been made.

    To briefly recap the legal issue:  Copyright owners have the right to control “public performances.”  Since the 1976 Copyright Act, retransmissions of broadcast signals (like those done by cable systems) are considered “public performances,” so they need a license of some kind.  But Aereo, instead of having shared equipment like cable systems, designates an individual antenna for each viewer.  Additionally, unlike cable, there's a separate transmission path for each viewer.  Thus, according to Aereo (and PK agrees) Aereo's service never “publicly performs” anything, and like singing in the shower or watching a movie at home, it simply falls outside the scope of copyright.  But the broadcasters think that this is just a “gimmick,” and that the law should group together various private performances into a public performances.

    For most of the history of broadcasting, broadcast stations were advertising-supported.  That was the deal:  Broadcasters get free use of the airwaves in exchange for providing a free service.  This started to change in the 1990s (but really took off around 2005 or so) when broadcasters began charging retransmission fees to cable systems, a legal right they only acquired as part of the 1992 Cable Act.  (From the passage of the 1976 Copyright Act until then, cable systems automatically qualified for a compulsory license, which they paid set rates for. Retransmission fees are layered on top of that system.)

    This is why it's hard to believe the broadcasters when they say that Aereo will somehow take away their retransmission fees, and destroy their business model.  How did they manage for so long–from the middle of the 20th Century until just a few years ago–without those fees?  But even more to the point, the idea that Aereo will give cable systems a magic ticket that will enable them to stop paying the fees is a bit far-fetched.  After all, a cable system doesn't just need to carry ABC, but ESPN as well, which is under the same corporate umbrella.  An Aereo win might give cable a bit more leverage against broadcast but they're still going to need to pay.  The dollar totals around different line items might switch around but without much net effect.  Instead, the consequence of an Aereo win will likely be more subtle:  Aereo (and maybe services like it) that do not offer the complete cable package and are available online will continue growing, making it easier (when combined with content from other services like Amazon Instant Video) for people to “cut the cord” and do without a traditional pay TV subscription at all.  Online services will find it easier to offer viewers the more flexible programming choices the marketplace has repeatedly demonstrated they want.  But these effects would take years to be felt.  This is why it's hard to take seriously hyperbolic threats from broadcasters to shut down their signals and move all their programming to cable networks if they don't win in the Supreme Court.  (One of the broadcaster comments I've enjoyed is the “threat” that broadcasters might have to start their own Aereo-like service.  Um–that would be a good thing!) 

    As a general matter when the Supreme Court looks at a copyright case, issues like the above are pretty much beside the point.  The law is the law, and it should be interpreted based on the text of the statute and Congressional intent, and if there are bad effects on a particular industry, that industry's proper avenue for change is Congress.  But, the broadcasters have already raised the effects on their industry as central to this case, so it's fair to consider what the effects of an Aereo loss could be on other industries.  In particular, the effects on internet companies (if you must, “cloud” services) could be pretty profound.  If the Aereo case establishes the principle that a company that provides private access to content that is not shared between users is nonetheless a public performer, this could mean all kinds of internet services–remote desktop services, storage services like Dropbox, cloud music services like iTunes Match and Google Play Music, and services that allow you to access your own media remotely such as Slingbox and Plex–could suddenly need licenses for activities that were previously thought to be outside the bounds of copyright.  (Some of these services do have licenses, but that's because some of them do more than just provide raw access to user-stored media.)  The downside of an Aereo loss to the internet industry far outweighs the upside to over-the-air broadcasters.

    It's true that some parties (such as the US Government, as well as Cablevision) are trying to square the circle and argue that Aereo could lose without there being any wide-ranging effects to the technology sector.  But these arguments, to be candid, don't make a lot of sense.  There are plenty of factual differences between how Aereo is designed and how other internet services are designed, just as how there are plenty of factual differences between how any two cloud services are designed.  But just because you can point to differences between Aereo and other services doesn't mean those differences are legally germane.  One of the oddest arguments the US has made is that some cloud services are different from Aereo because their content is “lawfully acquired.”  The reason this argument is odd is because of the implication that using an antenna to receive broadcast programing is by itself illegal.  (More to the point, it's a classic circular argument because it only works if your starting premise is that Aereo is illegal.)

    Aereo is an important case because it's not really about TV.  There's not one copyright law for TV, one for the internet, and a different one for books and music.  Copyright is very general and the implications of Aereo touch many industries more profoundly than they touch the TV industry that is so much at the center of this case.  If the Supreme Court focuses on the law, and not on broadcaster bluster, it should come down the right way, not only preserving viewer choice and control over broadcast programming, but helping ensure people can continue to use the internet to access a variety of services that are not bogged down by undeserved requirements for new license payments.