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Summary:

The fight over Aereo, which has had the TV industry buzzing for months, is going to the Supreme Court on Tuesday: here’s what you need to know.

SCOTUS generic
photo: J Roberts

Update 11:20am PT: My story recapping this morning’s hearing can be found here. Read on for the backstory of the case.

On Tuesday at 11am ET, Aereo will face off at the Supreme Court against big broadcasters and the Justice Department over whether Aereo, which lets consumers watch and record over-the-air TV for $8/month, should be shut down for copyright infringement.

Here’s a brief Q&A about the most important TV case since 1984, when the Supreme Court found the VCR to be a legal technology. Below you can find links to full background coverage.

What is Aereo and why are the broadcasters suing it?

Aereo rents dime-size antennas that act like long-distance rabbit ears attached to a remote DVR. The service, which is available in 11 cities, lets people watch and record over-the-air channels like NBC and Fox by streaming shows to their phone or computer.

The broadcasters say Aereo is violating copyright law by rebroadcasting their signals. Aereo, however, claims that it’s the subscribers who are doing the transmitting, and that Aereo simply rents a tool that lets people watch a private performance — much like they do when they tape a TV show and watch it their living room.

What does each side want?

The broadcasters want the Supreme Court to reverse an appeals court ruling, and to issue an injunction that will shut Aereo down across the country. Aereo wants the court to say it does not violate copyright law, which would allow it to expand to more cities, including ones on the west coast.

How long is the hearing and how can I follow it?

The hearing lasts one hour. The lawyer for ABC and the other broadcasters will argue for 20 minutes, and the Deputy Solicitor General (who is siding with ABC) will weigh in for 10 minutes on behalf of the Justice Department. Aereo gets 30 minutes to make its case.

The Supreme Court is still a sketchbook and note-pad sort of place, so there will be no live-blogs, tweeting or TV. But Gigaom and others will be filing stories shortly after the hearing.

How will the Justices decide?

Experts genuinely aren’t sure and are predicting a tight ruling. Liberal Justice Ruth Bader Ginsburg is expected to side with the broadcasters, but the views of the other Justices are less clear.

Copyright lawyer Ali Sternburg has pointed out that Justice Elena Kagan did not support the broadcasters in a similar Supreme Court case when she was Solicitor General, and noted that Justice Stephen Breyer has argued in the past for more limited copyright — meaning these two Justices could side with Aereo. As such, the outcome is likely to come down to Chief Justice John Roberts and the other conservatives on the bench.

Another notable feature of the case is that, in an unusual move, Justice Samuel Alito at the last minute reversed his early decision to recuse himself from the case. Alito’s surprise move eliminated the prospect of a 4-4 tie, which would have upheld a lower ruling in favor of Aereo.

Finally, veteran SCOTUS reporter Lyle Denniston observes that things will turn out poorly for Aereo if the Justices spend most of their time focusing on what Aereo is doing — while things will look brighter if the Justices’s questions are instead about what consumers are doing when they use the service.

When will the decision come?

Sometime in the summer — probably late June or early July.

Why is the case so important?

Aereo right now is still just a speck in the massive television economy. But the TV industry is worried that Aereo could eventually upset the current “bundle” model of TV, which relies on selling consumers a large package of channels. If Aereo is legal, it may encourage more consumers to “cut the cord” and replace their pay-TV provider with some combination of Aereo and other internet services like Netflix.

This had led the broadcasters to threaten that, if Aereo wins, they will take their signals off the air and become cable channels. Meanwhile, sports leagues like the NFL — which seek to tightly control how and where people watch their games — are warning that Aereo will hurt their business, and are supporting the broadcasters in the case.

The case also has implications for the emerging cloud computing industry. Companies like Google and Dropbox, which are supporting Aereo, worry that a win for the broadcasters could thrust the “public performance” right — the central legal issue in this case — into a host of other consumer cloud services.

Where can I learn more about all this?

Argument preview: Free TV at a bargain price? (SCOTUS Blog’s rundown of all legal issues, including the Justice Department perspective)

Here are 3 ways Aereo will tell the Supreme Court it is legal (Our overview of Aereo’s legal strategy)

Aereo Case will Shape TV’s Future (New York Times media writer David Carr explains what the case means for the TV industry)

Aereo’s CEO on the future of Netflix, TV sports and the public airwaves (Gigaom’s interview with Chet Kanojia)

What happens if broadcasters lose the Aereo case? (Fortune story contains numerous quotes from TV analysts and law professors)

Inside Aereo: new photos of the tech that’s changing how we watch TV (Gigaom’s original profile of the Brooklyn site where it all started)

 

 

  1. Aero claims to rent dime-sized antennas, but there is significant engineering dispute whether this is in fact what it is doing (it has to do with whether or not such a tiny antenna can actually “receive” over-the-air broadcast signals which has to do with the physics of how such broadcasts work; think of how large most broadcast antennas are). Because this case has reached the Supreme Court based on rulings of the District Court before an actual trial, Aero’s technological claims have never been tested. For purposes of the argument one assumes Aero’s claims are true, but that may not actually be the case.

    Also, the real impact of this case for the broadcast industry, is that if Aero is allowed to do what it claims it is doing, then there is nothing preventing more traditional cable and satellite service providers from doing the same thing, thereby undercutting the current business model for the most popular broadcast programming (retransmission consent fees), which pays for such programming. If the economic model breaks, how will broadcast network programming get funded? Thus the threat from some networks to move their programming to an exclusively on-line/cable model.

    If Aero loses (which it should in my opinion), all it would need to do to continue operating is to negotiate and pay for the right to use and profit from transmitting a third party’s content (i.e., the broadcast stations it is carrying on its service), just like cable and satellite service providers do.

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    1. Aereo is NOT broadcasting. You can call it “Singlecasting” 1 antenna, 1 user and 1 person receives.
      Let the Television / Cable broadcast model breakdown. Lets see what takes its place. If the public doesn’t like it? then it will breakdown. Such is life in a free market society.
      Good luck Aereo.

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    2. marc, there’s a “significant engineering” error in your post- there’s another “e” in aero, bud.

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    3. You bring up a good point about Aereo’s technology, Marc, but if I understand correctly, the broadcasters would have to accuse Aereo of misrepresenting their technology to trigger an investigation; instead, the broadcasters have accused Aereo of copyright infringement.

      However, I would have to disagree with you that if Aereo succeeds, traditional cable and satellite providers would follow their model and disrupt the retransmit fee business model. Assume for a moment, as the broadcasters have, that Aereo’s technology works exactly how they say it works (and it might be – after all, they ‘sold out’ of *something* in NYC). That means each user is guaranteed to be renting one antenna and one DVR cache. This isn’t different than if you could rent an antenna and a VCR at Radio Shack, then, except for the length of the “cable” between the VCR and your TV.

      If Aereo wins, and, say, Comcast decides to copy Aereo, then yeah, they could conceivably purchase 23 million dime-sized antennas, one for each user, and make the local channels available for streaming instead of through the cable. But when you talk about Comcast’s user base, I would argue that about 40% aren’t going to be comfortable enough or tech-savvy enough to want to change their habits for watching their local content. They don’t want to switch from watching Discovery via their set-top box, then grab their computer/smartphone/tablet, or switch to the on-demand menu when it’s time for Jeopardy. At least, that’s assuming the currently-deployed Comcast set-top boxes can’t live-stream, which I’ve seen no evidence they can. But I guess Comcast could possibly procure 23 million tiny antennas AND develop and deploy 23 million new set-top boxes to deploy this technology.

      Satellite providers, meanwhile, don’t have a reliable internet connection straight to the home, so if, say, DirecTV bought the 30 million tiny antennas required, they can’t guarantee all of their consumers have the broadband connection necessary to stream it. And they sure as heck can’t transmit 30 million *individual* streams over their satellites – you get at the most 250 simultaneous video streams per 36-transponder satellite today. Some of DirecTV’s customers already have broadband through another ISP, but a lot of them turn to DirecTV because they live in rural areas where there isn’t a highly-reliable ISP/cable operator.

      Now that arguments have occurred, it sounds like the argument was more about whether the cloud DVRs, even when individuals each have their own individual copy of the video, are the copyright violators, not the antennas… So we’ll still see how this plays out this summer.

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  2. ConsumerAdvocate Tuesday, April 22, 2014

    Good luck, Aereo!

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  3. This is a very complex issue with far reaching implications. The crux of the issue for me is how Aereo seems to be skirting the rebroadcast issue with their “antennas”. I’m all for free market economics and believe that over the top services are good for the industry and especially for the consumer. However, something about their service doesn’t sit well with me. Could be my Cable heritage speaking.

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  4. Neil Schuster Tuesday, April 22, 2014

    Marc brings up some strong points regarding Aereo’s case. As a consumer, I want to side with Aereo as they take on the big bad Broadcasters (and the annoying bundles consumers are locked into, but it’s important Aereo is transparent about the technology and that publications (like Gigaom) perform due diligence on said technology.

    When you think about more established satellite and cable providers doing the same thing and retransmitting the most popular broadcasts without fees, it sounds less like David vs. Goliath and more like stealing.

    Thanks Jeff and Mark for adding that valued analysis on a topic that affects pretty much everyone who watches TV.

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  5. Wholesale and retail… the broadcasters deserve to be paid for retransmission. It’s just simple business sense, an easy to understand concept.

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  6. Marc’s comment about antenna size displays his lack of knowledge of how antennas work. These tiny antennas are half-wave dipoles with delta matching sections, well known to any ham. The ends are folded to save space. Their size compared to the size of TV broadcasting antennas is completely irrelevant. This is mathematics. But no attorney is going to attempt to explain antenna design principles to the Supremes, much less the public.
    http://en.wikipedia.org/wiki/Dipole_antenna

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  7. I’m on Aereo’s side. I’m 65 and when I was younger I or my parents never paid for tv. when pay tv came along you still had your local channels. The statement from cable was commercial free tv What a lie an hour program is a half hour of commercials. The public is getting ripped off again like normal. We as regular people don’t stand a chance anymore. I HOPE AEREO WINS.

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  8. great story and really cool spin on the real issuse “protecting private enterprise”…not a
    lawyer however always cool to see how the “rules” are used to help private companies to
    continue to have the proverbial “unfair advantage”…
    even when said advantage goes against the very people the rule makers purport to represent …the term (quiseling) come to mind ..

    That being said one wonders how (supreme court) will justify “continuing” to give freely… “public” spectrum to private companies whose value proposition is only I can use any program I broadcast over spectrum given to me for free … it says here if the deal to allow private companies to use public spectrum was being cast under todays conditions …said value proposition would not fly ..

    Furthermore other companies who where gestated due to (spectrum broadcasters) technical lack ..now must pay (broadcasters) to put “FREE TO ALL” signals over those companys “private infrastructre”…(eventhought broadcasters are paid by adverts to broadcast the same content for free)
    Which those same private companies (cable,satelitte) charge thier customers for? which by the way is case anyone has forgotten is reason/how “retransmission fees ” began in the first place (how is that ok?)

    Now comes along someone who wants to use an “information service” (internet) to allow for access to free programs and then record it and watch later…the term “disruptor” comes to mind

    … my grandfather says “when you throw a rock in the chicken coop the one who screams the loudest is the one who was hit”

    good work Aero we are not all “STUPID”

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