On Tuesday, the Supreme Court will hear arguments from both sides in American Broadcasting Companies v. Aereo, a case that could set an important precedent for how we access broadcast television. Aereo, a startup which allows subscribers to watch live broadcast television online, is accused by the likes of ABC, NBC, CBS and others of copyright infringement. Here's what you need to know in order to track the case.
What is Aereo?
Aereo basically uses small, cloud-based antennas to grab over-the-air television broadcast, which it then makes accessible via the Internet. According to their website:
Until now, watching free, over-the-air television required a giant rooftop antenna or awkward rabbit ears. Aereo changed all that. Now, your TV antenna is unbelievably small. So small it can fit on the tip of your finger. But it still gets awesome HD reception. Your antenna is in the cloud. With lots of other antennas, all connected to DVRs and super-fast Internet connections.
For $8 a month, users can watch non-cable TV, live on any device, or DVR those shows for later viewing. So far, the service is only available in 11 U.S. cities, but the company plans on expanding.
So what's the problem?
According to the broadcasting giants that brought the case against Aereo, the company is infringing on their copyright by streaming their shows directly online, without paying a fee to the respective broadcaster. Lyle Denniston explained last year on SCOTUSblog that companies like Aereo are currently legal per a 2012 ruling that such firms don't need the permission of broadcasters or individual program copyright owners to air shows, because "the transmissions are not legally a 'public performance,' [so] there is no violation of the federal Copyright Act."
What's a "public performance"?
This is the crux of the case. The Copyright Act says that the owner of a creation has the exclusive right to perform the work publicly. The broadcasters say Aereo violates that right, but the company argues that retransmission to someone's computer doesn't count as a public performance. The Second Circuit agreed, leading the networks to bring forth a petition in October of last year to change the law. They said the court's ruling involved "nonsensical reasoning."
According to the Second Circuit, because Aereo sends each of its subscribers an individualized transmission of a performance from a unique copy of each copyrighted program, it is not transmitting performances "to the public," but rather is engaged in tens of thousands of "private" performances to paying strangers. The question presented is: Whether a company "publicly performs" a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers over the Internet.
They argue that Aereo, and others like it, are threatening the basic broadcasting business model by "publicly performing" their shows without making the necessary copyright payments. Local broadcasters and cable companies are still required to pay these fees and they say they can't compete against these new types of broadcasting firms. The Supreme Court agreed to hear the case in January.
But isn't broadcast TV already free?
Yes, and no. Anyone with the right equipment (that you have to pay for, of course) can watch over the over-the-air transmissions that are sent on the public airwaves, but when another company brings that into your home and charges you for it, things get more complicated. The Christian Science Monitor explains:
For the American public, all that was [originally] necessary to view the programming was a working television with an antenna, either up on the roof or through V-shaped metallic “rabbit ears” attached to the top of the set.... Enter Aereo. Rather than pay fees to the broadcasters, Aereo sought to exploit the original arrangement between the broadcast companies and members of the public.
According to the startup, Aereo is just offering viewers another way to use an antenna and watch programs they are already entitled to for free. Considering that television watchers now must purchase pricy antennas or TVs to view theoretically free television, bringing some competition into the static broadcasting network will likely help consumers — especially in light of Time Warner Cable and Comcast's possible merger, which would concentrate the power of cable companies into fewer hands.
Aereo also provides an attractive option for "cord cutters" — television consumers who don't subscribe to cable, opting to rely on Netflix, Hulu Plus, and other online providers instead. Traditional broadcaster businesses are threatened by the trend and are fighting to keep it at bay for as long as possible.
So what's at stake?
According to the Associated Press, it's a classic case of old media against new, which is really an long-running battle over who can truly own and control content.
The Obama administration, artists, actors, Major League Baseball and the National Football League all support the broadcasters. But the administration and computer software and telecommunications groups are urging the court to avoid a broad ruling in favor of copyright protection that could call into question the rapidly evolving world of cloud computing, which gives users access to a vast online computer network that stores and processes information. Smaller cable companies, independent broadcasters and consumer groups are backing Aereo.
The Washington Post adds that the case could affect how all of us watch television in the future:
An Aereo victory could dramatically change the way people watch their favorite programs. Live sports and other popular shows that are available only on broadcast TV or cable television could be accessed more conveniently and cheaply over the Internet... The average price of basic cable is nearly $100 a month. Broadband Internet plus subscriptions to Aereo and Netflix is less than $60.
While Bloomberg Businessweek argues that the case won't matter much either way because Aereo doesn't show pay-TV, which has been most attractive to consumers in recent years and because it might not be large enough to actually compete against broadcasters. For the networks, the networks however, that's not a gamble they are willing to take, and want to nip this technology in the bud, before it reaches every household in America. Either way, it's a case worth tuning into.