SCOTUS Decides Not to Forever Change TV as We Know It



I talk a lot about how new technologies are challenging existing laws, venturing into previously unregulated areas, or how technology seems to be clouding the defined lines of previous laws. Last week, the law finally caught up to one of those technologies (or didn’t, depending on your perspective).

The Supreme Court issued a ruling that will define the future of a sacrosanct American icon: television.

First, a quick recap of the case.

As we reported back in January, ABC v. Aereo is a dispute between the major U.S. broadcast networks (ABC, NBC, CBS, and FOX) and a technology startup called Aereo. For a subscription fee, Aereo allows customers to operate their own television antenna over the Internet.  Broadcasters claimed this amounted to an unlicensed retransmission of their content (a.k.a. a violation of the Copyright Act), which entitles content companies to retransmission fees like those paid by cable companies for “public performances” of their content.

On the other hand, Aereo claimed that their product only leveraged technology to help customers capture broadcast signals the same way they have since the dawn of television.

To give you some sense of what’s at stake: It’s estimated that the networks brought in $3.3 billion in retransmission fees from various cable and satellite companies. If they had lost the case, networks threatened to pull their content from the public airways (forever changing television as we know it).

After a series of legal battles in lower courts, the U.S. Supreme Court finally heard the case this spring. (For a deeper dive into the background check out the article from January here.)

Last week, in a 6-3 decision, the court ruled in favor of ABC. The court found that Aereo “performs  [ABC’s] works publicly” under the Copyright Act and that “given Aereo’s overwhelming likeness to the cable companies targeted by the 1976 amendments [to the Copyright Act], this sole technical difference between Aereo and traditional cable companies does not make a critical difference here.”

Justice Stephen Breyer, joined by Chief Justice Roberts and Justices Kennedy, Ginsburg, Sotomayor and Kagan said the differences between Aereo and traditional cable providers, “concern not the nature of the service that Aereo provides so much as the technological manner in which it provides the service.”

Essentially, the court ruled that if it looks like a cable company and accomplishes the same thing for its customers, then it should pay for content the same way—seeming to take a “if it walks like a duck and quacks like a duck, it’s a duck” approach to the case.

Writing a dissent, Justice Antonin Scalia said he shares “the Court’s evident feeling that what Aereo is doing…ought not to be allowed,” but says that Aereo essentially exploits a loophole in the existing copyright law. He contends that, “It is not the role of this court to identify and plug loopholes,” a task that he says remains with Congress. Justices Thomas and Alito agreed with Scalia.

The ruling preserves the status quo for how the television industry operates and has presumably ended Aereo, or at the very least, ended Aereo as we know it now.  In a statement released on the company’s blog shortly after the ruling, Aereo CEO and Founder Chet Kanojia said the ruling is a “setback for the American consumer” and insisted, “our work is not done.”

It is possible that Aereo could continue to operate as a traditional cable provider. In a statement to the New York Times, Leslie Moonves, Chief Executive of CBS, said he would be open to a deal with Aereo to distribute their content, provided that the company was willing to pay for it, although it’s unlikely that the service would be able to offer its incredibly low pricing if it decides to enter into such agreements with the various broadcasters.

This is just one of the many battles going on between innovative technology companies and the industries that they are disrupting. However, it remains to be seen how this “if it looks like a duck” precedent will affect other technological innovations.

In their ruling, Justice Breyer and the majority seem determined to limit the impact of their ruling on other technologies, saying that “questions about cloud computing, remote storage DVRs and other novel matters not now before us should await a case in which they are clearly presented.”

As these future cases make their way through the courts, the larger question to be settled is how best to strike a balance between rapid technological innovation while still protecting those who produce copyrighted works and should obviously be able to make money from them.

About John Wilson

John Wilson is an analytical communications professional, with a passion for sifting through data for compelling stories and insights. John started his career on Capitol Hill and chased his love of data and communications out of politics and into opinion research and public relations. John graduated Phi Beta Kappa from the George Washington University where he studied political science and statistics. Beyond work, John loves the mountains and can be found skiing or hiking in both the Sierras and the Rockies.
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