Internet startup Aereo uses little antennas to capture television shows from broadcasters and retransmit them to Aereo subscribers to view on smartphones, laptops and tablets.
TV’s Problem With Aereo
But Aereo does not pay broadcasters for those shows – and that’s the problem. Broadcasters, including ABC, CBS, NBC and Fox, are suing Aereo for violating copyright laws and stealing their shows. The U.S. Supreme Court is hearing arguments from both sides this week.
Future of TV at Stake
A ruling from Justices in America’s highest court will likely affect the future of broadcast TV. “What’s at stake in this case is really the nature of broadcast television as we know it,” said Paul Clement, network television’s attorney. “If a company like Aereo can somehow provide content to lots of paying strangers without being engaged in a public performance, the networks, at least some of them, will have to rethink the way they provide content.”
Public vs Private Audiences
The issue in this two-year-old battle is whether Aereo violates copyright laws which prohibit retransmitting programs to public audiences.
“You are selling the right to use the antennas to the entire American public, and selling it for a fee,” said Neil Katyal, Partner, Hogan Lovells. “For example if you put an antenna on your roof, piped in the Super Bowl and then started selling it to your entire neighborhood, everyone knows that would flatly violate the copyright law. That’s exactly what Aereo does.”
Aereo argues that it’s not breaking the law, that it is simply renting antennas and cloud storage to its subscribers.
“The law is clear,” said Gary Shapiro, Chief Executive Officer of the Consumer Electronics Association. “The law is being followed and big broadcasters don’t like it. People are saying for $8 a month, I may not have to subscribe to cable. I can get a really good signal and it makes sense. So, I think the Justices were struggling. Even if they want to rule with the broadcasters, how could they do it without hurting cloud computing? Without hurting all the other sorts of innovation? They don’t want to foreclose in the future.”
The Obama administration has filed a brief siding with broadcasters in this case.But analysts say the issue is too difficult to predict how the Supreme Court will rule.