The U.S. Supreme Court stepped gingerly into the brave new world
of cloud computing and online streaming Tuesday morning when the
justices heard oral argument in American Broadcasting
Companies, Inc. v. Aereo, a case testing the reach of
copyright law in today’s hi-tech world.
At issue is whether Aereo,
a New York-based company whose tagline reads, “Watch Live TV
Online,” is in violation of federal copyright law because it does
not pay royalties for the TV broadcasts its service allows paying
customers to watch on their smart-phones, tablets, and
computers.
“Aereo is an equipment provider,” the company’s lawyer, David C.
Frederick, told the Court. That equipment includes some 10,000
dime-sized antennas in the company’s Brooklyn facility. Those
antennas, Aereo says, operate just like the old-fashioned antennas
that were once commonly affixed to TV sets. They catch over-the-air
broadcasts and allow people to watch those broadcasts on their TVs.
According to federal law, the old-fashioned scenario raises no
copyright concerns. Aereo maintains that its hi-tech service should
be seen as the modern equivalent. “All Aereo is doing is providing
antennas and DVRs that enable consumers to do” what the law already
allows them to do, Frederick repeatedly stressed during
questioning.
But several members of the Court voiced significant doubts about
the probity of Aereo’s approach. “If every other transmitter does
pay a royalty,” observed Justice Ruth Bader Ginsburg, “you are the
only player so far that doesn’t pay any royalties at any
stage.”
Justice Stephen Breyer amplified that concern. “It looks as if
somehow you are escaping a constraint that’s imposed upon” cable
companies and satellite systems, he told Frederick. Indeed, added
Justice Elena Kagan, from the user’s standpoint, Aereo is “exactly
the same as if I’m watching cable.”
But the other side faced sharp questioning as well. Representing
ABC and several other media entities in their fight against Aereo
was Paul Clement, the former solicitor general and high-profile
conservative lawyer. He told the Court that because Aereo is
“publicly performing” copyrighted material it must pay the price.
“They provide thousands of paying strangers with public
performances over the TV, but they [claim] they don’t publicly
perform at all. It’s like magic,” he quipped.
Yet Clement’s definition of what should count as a “public
performance” of copyrighted material plainly troubled several of
the justices.
Justice Sonia Sotomayor, for example, worried that “someone who
sells coaxial cable to a resident of a building” might be “swept up
as a participant in this.” They also enable strangers to watch
public performances, she implied.
Justice Samuel Alito, who appeared visibly frustrated with
Clement’s evasive answers at one point, raised a broader concern.
“I need to know how far the rationale that you want us to accept
will go…what effect it will have on these other technologies,”
Alito declared.
Foremost among those “other technologies” is what’s commonly
called “the cloud,” a shorthand term for the ability to store and
access vast amounts of material online, including copyrighted items
such as the digital files for songs and movies.
What if, asked Justice Breyer, an anti-Aereo ruling causes
fallout for “other things that really will change life and
shouldn’t, such as the cloud?”
It’s a good question. But judging by Tuesday’s closely divided
oral argument the Court is still groping its way towards an
answer.
A ruling in American Broadcasting Companies, Inc. v.
Aereo is expected by June.
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