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Aereo

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How will the Supreme Court rule after today’s Aereo vs. the TV Industrial Complex hearing?

Who knows? But I think that after watching the court question attorneys representing the TV networks, the U.S. Department of Justice and Aereo this afternoon, I at least have a sense of what’s on their minds. They’re concerned about the way this case could affect cloud computing in general.

Here, via the court’s public information department, are some very long excerpts of today’s hearings (you can read the full transcript for yourself). They are very long! But I think they’re worth reading*, if you’re inclined, because they give you a good sense of the questions the justices had today, as well as the main thrust of arguments from two sides.

Here’s Paul Clement, the attorney representing ABC (and the other broadcast networks), making his central argument — Aereo doesn’t have the right to transmit TV programs because it doesn’t have a license for them — and answering queries from Chief Justice John Roberts, Justice Samuel Alito, Justice Anthony Kennedy and Justice Stephen Breyer about the difference between Aereo and other services. Note Breyer’s concern about cloud services.

CLEMENT: I do think that in all sorts of places, including the real world there’s a fundamental difference between a service that allows — that provides new content to all sorts of end-users, essentially any paying stranger, and a service that provides a locker, a storage service.

And I think if you want a real world analogy off of the Internet, I think it’s the basic decision — the difference between a car dealer and a valet parking service. I mean, if you look at it from 30,000 feet, you might think, hey, both of these things provide cars to the public. But if you looked at it more closely, you’d understand, well, if I show up at the car dealership without a car, I’m going to be able to get a car. If I show up at the valet parking service and I don’t own a car, it’s not going to end well for me. And so –

ALITO: What is the difference –
(Laughter.)

ALITO: I didn’t mean to interrupt your –

CLEMENT: Well, I was just going to — so I think there is a very real way in which you would say, you know, at the end of the day, the car dealer’s providing cars to the public, the valet parking service is not. It’s providing a parking service.

ROBERTS: Why isn’t — and I don’t want to stretch it too — but why isn’t it like a public garage [and] your own garage? I mean, you know, if you — you can park your car in your own garage or you can park it in a public garage.

You can go to Radio Shack and buy an antenna and a DVR or you can rent those facilities somewhere else from Aereo. They’ve — they’ve got an antenna. They’ll let you use it when you need it and they can, you know, record the stuff as well and let you pick it up when you need it.

CLEMENT: Mr. Chief Justice, that’s not an implausible way to look at this. That’s exactly the way that this Court looked at it in the Fortnightly decision. But Congress in 1976 decided it was going to look at it differently, and it said that if you are providing a service, even if you are providing a service that one could reconceptualize as just renting out antennas that somebody could put on their own house, the person that provides that service on an ongoing basis and in the process exploits the copyrighted works of others is engaged in a public performance.

That is clearly what they were trying to do in the 1976 Act by adding the transmit clause.

ALITO: Well, the Second Circuit analogized this to its CableVision decision. So maybe you could explain to me what is the difference, in your view, between what Aereo does and a remote storage DVR system.

Is the difference — does the difference have to do with the way in which the cable company that has the remote storage DVR system versus the way Aereo acquires the program in the first place? Does it have to do with the number of people who view this program that’s been recorded? What is the difference?

CLEMENT: I think the potential difference, and it’s both the cloud locker storage and this example, I don’t think this Court has to decide it today. I think it can just be confident they are different. Here is the –

ALITO: Well, I don’t find that very satisfying because I really — I need to know how far the rationale that you want us to accept will go, and I need to understand, I think, what effect it will have on these other technologies.

KENNEDY: I had the same question.

Just assume that CableVision is our precedent. I know that it isn’t, but let’s just assume that it is. How would you distinguish the CableVision from your case and how is it applicable here? Assume that it’s binding
precedent. Just that’s a hypothetical.

CLEMENT: Okay. But, Justice Kennedy, I would like to answer both your questions by assuming that the result in CableVision is right, but I don’t have to necessarily buy the reasoning, because I think the reasoning of CableVision is profoundly wrong, so let me circle back to that.

But the reason there’s a fundamental difference between the RS-DVR at issue in CableVision and what Aereo provides is, as Justice Alito alluded to, the fact that there’s a license in the CableVision context to get the initial performance to the public.

And so then I think appropriately the focus in the CableVision context becomes just the playback feature and just the time-shifting that’s enabled by that. And in that context, if you focus only on that, then the RS-DVR looks a lot like a locker service where you have to come in with the content before you can get content out and you only get back the same content.

And here is what really I think Aereo is like. Aereo is like if CableVision, having won in the Second Circuit, decides: “Whew, we won, so guess what? Going forward, we’re going to dispense with all these licenses, and we are just going to try to tell people we are just an RS-DVR, that’s all we are, and never mind that we don’t have any licensed ability to get the broadcast in the first instance, and we’re going to provide it to individual users, and it’s all going to be because they push buttons and not because we push buttons.”

If that were the hypothetical, I don’t know how that wouldn’t be the clearest violation of the 1976 Act.

BREYER: That’s exactly our problem I’m hearing everybody having the same problem, and I will be absolutely prepared, at least for argument’s sake, to assume with you that if there were ever anything that should be held to fall within the public performance, this should be.

All right? I will assume that. I’m not saying it.

But then the problem is in the words that do that, because we have to write words. Are we somehow catching other things that really will change life and shouldn’t, such as the cloud? And you said, well, as the government says, don’t worry, because that isn’t a public performance. And then I read the definition and I don’t see how to get out of it.

And here’s Roberts talking to Aereo attorney David Frederick. This is where Roberts asked Frederick to argue that Aereo is built the way it is for some reason other than paying for TV. And Frederick ends up making an argument that tries to tie Aereo’s future to the fate of other cloud-based services:

CHIEF JUSTICE ROBERTS: Just to make sure I’ve got — there’s no reason it’s a user-specific copy, is it? They’re making 10,000 copies. It’d be much easier for you if you’d just have to make one copy and everybody could get a copy.

FREDERICK: Well, that’s where the issue about replicating what happens in the home matters, Mr. Chief Justice, because if I’m in my home and I start the program two minutes in, using Aereo’s technology, I missed the first two minutes, I never get to watch it. It happens to be when I push the button to initiate the copy, just like if I’m at home watching on a DVR, the same principle. And so that copy will always be different because I have control over it versus –

ROBERTS: Surely, you can make a program where you have just one copy and start it at different times. You don’t need every viewer to have his own copy.

FREDERICK: But that is — that is the key distinction between video on demand and the service that Aereo provides, the kinds of equipment and technology that Aereo provides. We don’t have a brief to defend the master copy because in the master copy situation, that is indisputably public because there is no right to exclude anyone else. With Aereo’s technology, if I’m making a copy using Aereo’s system, no one else can look at it. Even if you happen to have watched the same program, you can’t watch my copy, I can’t download it –

ROBERTS: That’s just saying your copy is different from my copy.

FREDERICK: Correct.

ROBERTS: But that’s the reason we call them copies, because they’re the same.

(Laughter.)

ROBERTS: All I’m trying to get at, and I’m not saying it’s outcome determinative or necessarily bad, I’m just saying your technological model is based solely on circumventing legal prohibitions that you don’t want to comply with, which is fine.
I mean, that’s — you know, lawyers do that. But I’m just wondering why –

(Laughter.)

ROBERTS: — whether you can give me any technological reason, apart from compliance with a particular legal issue, for your technological mind.

FREDERICK : It is much simpler if you’re a start-up to add components, to add modules when you’re starting up, ramping up. And what we’re talking about in any cloud computing industry is you’re starting with one group of servers and then you add them, almost like Lego pieces, as you are adding the number of people that you’re using. That is a technological reason why the cloud works the way it does, Mr. Chief Justice.

So with Aereo’s antennas and its DVRs, we can, with about the length of the size of this counsel table here, service tens of thousands of people in the New York area. We can provide the antennas and we can provide the DVRs and it’s a very compact, small space.

And then if we expand and we’re able to continue to be in business and we get more subscribers in Brooklyn, we might add another row that would be the size of — of the counsel tables behind me.

That aspect of the technology goes to the modules that are used for cloud computing, where you basically can add additional servers, add additional hard disk space and then when new consumers activate — and let me just be clear about this, when they sign up, their system is completely empty. There’s no content being provided. There’s equipment that’s being provided.

So when they activate the system and they say, I want to watch the news at 6 o’clock, they then start the process that then fills their individually assigned storage with the 6 o’clock news.

But until that happens, there’s no content being provided. So the notion that they have in their reply brief over and over that we’re somehow a content provider would mean that everybody who provides an antenna or a DVR is somehow a content provider.

And if that’s true, then the implications for the equipment industry are obviously quite massive and you can understand why that would frighten the cloud computing industry because that turns them into public performers whenever they are handling content.

* If you want to hear this stuff for yourself, by the way, you’re going to have to wait a few a days. C-Span says it will have a recording of the session available Friday afternoon, and will broadcast it on their TV and radio channels Friday night.

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2 comments
Matt42314
Matt42314

 Examples of news and questioning why everyone should get their own copy are interesting points to bring up.  A show aired in one region is not necessarily the same as a show aired in another -- edits, break-ins, changes, and even airing order are known to happen.  The "6 o' clock news" for New York is going to be fundamentally different from the "6 o' clock news" in any other region.  Same network, different affiliate.


Sports broadcasting, too, is subject to blackout restrictions that would be circumvented (or unduly imposed) by simply having a "central copy."

altr
altr

All arguments hinge on terminology. Unfortunately Aereo chose to refer to their customers as "subscribers". The same term used by pay TV providers. If they had referred to them as "equipment rental customers" then the outcome of this ruling would likely be quite different.


Aereo RIP.

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