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The now defunct technology start-up Aereo was poised to revolutionize the live broadcast television model. However, after a three-year legal battle spanning several states that eventually led to the Supreme Court, Aereo was found in violation of the Copyright Act of 1976. Broadcasters applauded the decision, while technologists worried the Court had not only failed to understand the technology behind Aereo, but had also created a dangerous legal precedent for all future cloud computing technologies.

Aereo allowed users to stream and record broadcast television to any laptop or mobile device. Shortly after Aereo was announced, broadcasters filed for an injunction claiming Aereo was in fact a cable companSuy, and as such needed to pay retransmission fees.  The heart of broadcasters’ argument focused on the definition of “performance” and “to the public” under the Transmit Clause of the Copyright Act, 17 U.S. Code section 101.  Aereo contested, stating that its service was acceptable both legally and technically because it simply provided users an alternative means to access free, over-the-air broadcasts. Much of Aereo’s legal argument rested on Cartoon Network LP, LLLP v. CSC Holdings, Inc. (hereinafter “Cablevision”).

The Supreme Court ultimately held for broadcasters in a 6-3 decision favoring a legislative intent interpretation of the Copyright Act.  The Court agreed with the broadcasters’ argument that Aereo’s technology, though functionally legal, exploited a loophole created by the Cablevision decision. Therefore, Aereo was retransmitting to the public, and as such was in violation of the Copyright Act.

The decision has had a polarizing effect. Technologists fear that this decision may have unintended consequences in the ever-growing cloud computing space, whereas proponents argue that this decision is narrowly limited to cable companies. The decision has already played a role in challenging the launch of new services, most notably satellite television provider Dish’s release of Dish Anywhere – a service that allows users to stream cable television to any device. However, currently these ramifications are isolated to the broadcast industry and have yet to result in far reaching or significant consequences for the developing cloud computing technologies.

By Ruchir Patel