Aereo ruled illegal by Supreme Court; must pay copyright fees

Aereo ruled illegal by Supreme Court; must pay copyright fees

Summary: The future of Internet TV was decided by the U.S. Supreme Court. And it didn't go in cordcutters' favor.

(Image via CNET)

By a six-to-three vote, the U.S. Supreme Court reversed the decision of the US Second District Court in ABC vs. Aereo.

The bottom line: The Supreme Court has ruled that Aereo's over-the-air (OTA) TV over the Internet service is illegal.

According to the SCOTUSblog, "This ruling appears sweeping and definitive, determining that Aereo is illegal." At the same time, the Court claimed that "its ruling does not endanger other technologies." How that can be is an open question. Aereo had claimed that a decision against them might endanger other cloud-based media services.

It appears, however, that "the essence of the Aereo ruling is that Aereo is equivalent to a cable company, not merely an equipment provider." That, according to the court's decision, Aereo's "behind-the-scenes technological differences do not distinguish Aereo's system from cable systems, which do perform publicly."

Aereo was a service that lets you watch over-the-air TV over the Internet for $8 per month. It offered you the same network television shows that are available to anyone with an antenna. To do this, Aereo sets up clusters of miniature antennas in your local area.

For example, If you lived in New York, you'd be able to watch WABC, WCBS, and WNBC; when and if Aereo had expanded to in to Washington, you would have been able to watch WJLA, WUSA, and WRC; and so on.

When you signed up for the service, you were assigned two of those antennas. One is for watching live shows and the other is for recording programs. Your chosen local OTA shows are then also kept in cloud-based digital video recorder (DVR).

"This ruling appears sweeping and definitive, determining that Aereo is illegal."

This isn't just cloud DVR, though. Whether you were watching a "live" show or a recorded one, you're creating, the company stated, "three separate unique copies of the show, each in a different bit rate optimized for different streaming conditions. The lowest bit rate file is ideal for streaming over 3G connections. The medium rate file will work well over most Wi-Fi connections. The highest rate file is intended for really fast broadband connections. While watching, you can choose the video quality on your device. If you select 'auto', you will automatically choose the best bitrate for your current network conditions."

At the time of the decision, Aereo was available in eleven Eastern and Midwest cities. The company had had plans to offer its services in 19 more US cities.

ABC and other networks — including CBS, the parent company of ZDNet and sister-site CNET — had argued that Aereo was violating copyright by retransmitting their signals over the Internet. Legally, the question in ABC vs. Aereo is whether Aereo "publicly performs" a copyrighted television program when it retransmits a broadcast of that program to paid subscribers over the Internet.

Aereo's counter-argument was that, in essence, all they're doing is renting you an antenna with a very, very long cable that just happens to go over the Internet. Since Aereo will only let you watch network shows that are available from your local OTA TV stations, their position was that the company was not violating any copyright or retransmission laws. As for offering a DVR service, Aereo argued that the case of 20th Century Fox vs. Cablevision had already shown that remote Internet-based DVRs were legal.

In addition, Aereo argued that a strike against them is a blow against all cloud media storage. The Supreme Court disagreed on both counts. 

What happens now? Good question.

Is Aereo out of business now? The company has always insisted that if its loses it has no alternative plan.

On the other hand, in Fortune, Aereo CEO Chet Kanojia "suggested that Aereo could explore several alternate options in the case of a loss, including perhaps even paying some sort of retransmission fees to broadcasters." This appears to be Aereo's only option for the business to survive.

Whether the networks would agree to such a deal is another question. While, the networks have never been averse to making more money, they all disliked both Aereo's model and their persistence in pushing it through the courts. Still, sooner rather than later the networks must come to terms with the cordcutters in a more sensible way than their current mishmash of network specific Web sites and rerun-specific deals with Amazon, Hulu, and Netflix.

Related stories:

Topics: Networking, Broadband, Legal

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  • Hooray!!

    Rabid Howler Monkey
    • Hooray my butt - This is BS!

      I get lot's of channels OTA on my own so it isn't an issue for me but it sucks for many others that don't get a good signal. I don't subscribe to cable and never will! So they lose anyway!
      • Had Aereo won the case

        it's quite possible that the networks would have ceased OTA broadcasts of their programming. At least, this is what the networks were threatening to do if they lost. This scenario would result in *nobody* receiving OTA broadcasts from the networks.

        Thusly, one would either have to pay for cable or broadband to get the network programming. Both cable and broadband costs are significantly higher in the U.S. than in much of the rest of the world (there's really no competition to speak of). And, thus far, the cable companies have been unwilling to let customers pick and choose the channels they want to view and pay for. It's all or nothing except for adding premium channels.
        Rabid Howler Monkey
        • And?

          If you have a poor signal your new alternative is cable or other similar high priced alternatives.
          Personally this is not available in my area. For OTA I have mediocre reception at best and my Spanish channels outnumber English by more than 4 to 1.
          Currently I have TWC.
          • And what if one has a reasonably good signal

            As I and many others across the country do? The cost of viewing network programming just got very expensive relative to viewing adverts associated with OTA broadcasting.
            Rabid Howler Monkey
          • Agreed.

            If networks are forced to broadcast OTA why aren't cable companies forced to broadcast local network stations for free. Isn't this the bottom line issue that Aereo was addressing?
            Old Techie
          • So, What You Are Saying Is

            All those who receive OTA would have to sacrifice their OTA just so the mediocre viewers could get the same programming for $8.00 per month? That is not the point. The point was, OTA would go away if Aereo won or the signal would be scrambled and the public would need a descrambler and pay for free OTA. Or everyone would need cable.
        • You're kidding right?

          OK, so how much do you pay for all you can eat internet? I pay $120 a month. There's no such thing as cable in NZ so we have Sky Television which is $60 a month and that includes 50 channels, most of which are rubbish. We can't get the SyFy channel for love nor money and so much more that you guys take for granted. I don't know which other countries these are that you speak of, but in my experience America has the cheapest Petrol, Broadband, Phone, Cellphone, hardware, cars and the list goes on and on!
          • Let's stick to broadband

            o "in comparison to their international peers, Americans in major cities such as New York, Los Angeles, and Washington, DC are paying higher prices for slower Internet service"
            o "In the U.S., for example, the best deal for a 150 Mbps home broadband connection from cable and phone companies is $130/month, offered by Verizon FiOS. By contrast, the international cities we surveyed offer comparable speeds for less than $80/month, with most coming in at about $50/month.
            o "When it comes to mobile broadband, the cheapest price for around 2 GB of data in the U.S. ($30/month from T-Mobile) is twice as much as what users in London pay ($15/month from T-Mobile). It costs more to purchase 2 GB of data in a U.S. city than it does in any of the cities surveyed in Europe."

            "The Cost of Connectivity 2013
            "A comparison of high-speed Internet prices in 24 cities around the world
            Rabid Howler Monkey
          • Where?

            I don't know where your getting your information from, but the U.S. has the HIGHEST cost of internet access with the lowest thresholds. It's actually an embarrassing shame. As for phones and cell-phones, we aren't exactly getting the best prices there either because there's a serious lack of competition and the big companies are gouging us without fear of the government.
          • Check out Ting.

            Mobile doesnt have to cost too much. Pay for what you use and stop subsidizing those who push the limits of "unlimited". my wife and I use EVO 4glte phones and we got an Evo for her mother. Our monthly bill for all three phones has averaged about $48 a month.
            Mike Kling
          • Dude you are missing nothing the syfy channel stinks

            Dude you are missing nothing the syfy channel stinks to the heavens. bad really bad made for Tv movies and very little SYFI period. I have seen batter made spook movie made in the 50,s then the trash they put on the air.
          • Have a look at UK prices...

            Here in the UK just take your USD dollar $ price and change the symbol to GBP pounds £.

            In real terms that means in the US you about half the price for everything than we do - your $400 bucks iPad becomes a £400 pounds iPad in the UK, so its and $800 device here.

            Oh how I wish I could buy stuff at US prices!
            Lord Minty
          • That's 'cause the Pollys refused to switch to the Euro

            it's about 4:3 ratio to dollar right now.
            Old Techie
        • FUD

          The networks are required by law to transmit their broadcasts over the air. If they stopped, they're licenses would be yanked and sold to another entrepreneur with more sense that you seem to have.
          • Could the networks not voluntarily give up their OTA broadcast licenses?

            And operate as many other cable channels do?

            As for other entrepreneurs purchasing the OTA broadcast licenses, would they have the programming that TV viewers want?
            Rabid Howler Monkey
          • RE: "FUD"

            Here's a link to an earlier SJVN article on the subject:

            "Supreme Court to decide the future of Internet TV

            And here's a relevant excerpt from the article:

            "If Aereo wins ... perhaps the major networks will encrypt or otherwise make their OTA presentations unwatchable to non-subscribers. This would be the end of free broadcast TV."

            Perhaps, FUD. Perhaps, not. Even some of the networks (e.g., Fox) have stated that this is a possibility.
            Rabid Howler Monkey
    • The Supreme Court are paid lackeys

      $$$$$$$$$$$$$.....and the corporate dictatorship tells a major ruling body of the government what to do they bend over and take it.
      • Evidence, please

        The most obvious evidence would be that Supreme Court justices were spending more than their salaries and investment income would allow.

        It's not like the "corporate dictatorship" can easily fire them if they don't toe the line.
        John L. Ries
  • I still don't understand?

    If OTA TV is transmitted to more people, then, more people are seeing the ads that pay for the OTA TV. Wouldn't OTA TV networks like that? Wouldn't they want people to cut the cord?

    The OTA signal is far superior to any signal over the cable.