The wait is over: the Supreme Court of the US (SCOTUS) has ruled against online TV start-up Aereo, finding it has violated broadcasters' copyright.
Aereo — which charges $8 per month for online access to local broadcast feeds over the Internet, without paying retransmission fees — had gone to the Supreme Court in April to defend its right to exist in the face of copyright infringement suits from every major broadcaster who argued that because Aereo company broadcasts local feeds via the Internet without paying retransmission fees, it's essentially stealing their content.
Aereo counter-argued that because it provides dime-sized antennae to its subscribers it constitutes an over-the-air, rabbit ears-based service, which is exempt from retrans fees. It has also argues that its content is delivered to a single cloud-based DVR device for one subscriber and can therefore not be categorised as a public broadcast service, subject to fees and regulations.
The SCOTUS blog pointed out that the Court based its ruling on a fairly simple application of what it means to "perform" a copyrighted programme through distribution to "the public".
"Aereo's system," Justice Stephen G Breyer wrote for the majority, "both performs the copyrighted programmes and does so through delivery to the public."
The case hinged partially on a case from 2008, when Cablevision beat back broadcaster opposition with a Second Circuit decision that cleared the way for network DVRs to be considered legal, paving the way for cloud-based broadcast models and the cloud storage industry.
In Cablevision, the court agreed that legally, there is no difference between DVRs that stored content remotely on a server and those that keep it locally on a set-top box at the home. Aereo says that this is the same concept behind its own approach, and that broadcasters are simply denying technological innovation and the rise of cloud services.
"Today's decision by the United States Supreme Court is a massive setback for the American consumer," said Aereo CEO and founder Chet Kanojia in his post-decision comment. "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?"
However, the Court underscored that this is only a narrow ruling. It said it was dealing, at this point, only with Aereo's system so far as it enabled its viewers to view copyrighted TV programmes "live" or after only a brief delay. Justice Breyer stressed that the decision said nothing about downloading a TV programme in order to recover it and keep it on hand for later viewing.
Justice Breyer's opinion, largely in favour of the broadcast industry, was supported by Chief Justice John G Roberts Jr, and by Justices Ruth Bader Ginsburg, Elena Kagan, Anthony M Kennedy and Sonia Sotomayor. Justice Antonin Scalia, joined by Justices Samuel A Alito Jr and Clarence Thomas, dissented. The Scalia opinion argued that what Aereo was doing simply was not a performance, and accused the majority of writing a confusing new copyright doctrine that will be hard for lower courts to apply and for industry to understand what is and is not allowed.