Words Matter: Aereo, Channels, and Online Competition

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Right now, whether and how the Internet can bring competition to the video marketplace depends in part on arguments about the dictionary. While innovators are out there bringing new products to market, the courts and the FCC are behind the scenes trying to figure out if they should be allowed to stay in business. The answer turns on the meanings of words. In one case, the Southern District Court of New York has to figure out what "public" means. While it's doing this, the FCC will be considering what a "channel" is. These hairsplitting discussions will help shape the future of online television.

Aereo

Copyright holders have the right to control "public performances" of their works. This case hinges on whether Aereo, which I would characterize as a "remote antenna" service, infringes on the public performance right.

No one thinks that it's a public performance if a TV viewer attaches an antenna to his TV. Nor does a store like Radio Shack, who might have sold him the antenna, infringe any copyrights by doing so. Aereo is a bit different than this--it rents out antennas to TV viewers in the New York area, but keeps them in their own facility (which gets better TV reception). Each viewer gets his own antenna and the antenna sends its signal to viewers over the Internet.

Broadcasters have sued, claiming that Aereo violates their public performance rights. PK disagrees--Aereo is a service that enables viewers to make their own private performances of works. You don't need specific permission from a copyright holder to make a private performances--you can watch TV or listen to music without negotiating a license. Aereo's customers already have lawful access to broadcast content for free over the air, and Aereo just makes that content more convenient to them. Because each viewer watches her own private signal, Aereo's service is more like Cablevision's legal "remote DVR" service than Cablevision's actual cable TV product.

In an amicus brief filed today, we and EFF have made these arguments--and also reminded the court that broadcasters, in exchange for their exclusive use of limited public airwaves, have an obligation to provide a free service to their communities.

This is a technical legal issue about whether a specific service violates one of a copyright holder's exclusive rights. But it's important, not just because Aereo is exactly the kind of service that could shake up the sleepy TV industry, but because users of copyrighted works generally will suffer if the word "public" is bleached of all meaning and they have to start paying license fees for normal, everyday activities just because they happen to involve the Internet.

What is an "MVPD"?

Cable and satellite TV providers, as well as newer platforms like Verizon's FiOS and AT&T's U-Verse TV, are all considered "multichannel programming distributors" (MVPDs). Congress adopted this term in an attempt to be broad and technology-neutral. MVPDs have certain legal rights and obligations. Most relevant for present purposes, they have the right to access certain kinds of programming. They have to carry certain broadcasters, they can negotiate to carry others, and other MVPDs (for example, large cable companies) have to make their programming available to them, and can't sign exclusive contracts to keep programming from being carried by their MVPD competitors.

Given that the broadband Internet allows services (like Sky Angel) to closely emulate traditional cable TV, the question has come up whether a purely online service can count as an MVPD. This issue hinges on whether an online service can offer "channels" of programming (as in "multichannel") when their services are delivered over the Internet and not through specialized infrastructure.

Most incumbents want the FCC to interpret "channel" in the term MVPD to mean "a physical transmission path," which could exclude online competitors. PK thinks that "channel" in this context means what it means when people talk about "channels"--The History Channel is a channel. The Learning Channel is a channel. And WUSA in Washington is a channel. Thus, any service that offers multiple "channels" of programming to subscribers should be an MVPD. (Notably, this would not turn online services like Hulu or Netflix into MVPDs. They offer on-demand programming, not prescheduled programming streams. And Aereo would not be an MVPD since it does not actually "offer" programming itself; it merely provides people with an individual remote antenna.)

All of this is exhaustively spelled out in our recent comments on the subject.

If online services can become MVPDs then they'd be able to offer all the same content that makes people subscribe to cable today. This would bring some much-needed competition into the pay TV market. Even non-MVPD online video services would benefit from a sort of halo effect, as more consumers would be find that they can access all of their favorite programs online. In short, whether the word "channel" is given a reading that refers more to programming content, or instead refers to a sort of physical container, makes a big difference to the future development of the video market.

Incremental Progress

Copyright law as it stands today needs to be given interpretations that both make sense (public should mean public) but also don't disadvantage lawful uses. And it's important for media law to be read in a way that is consistent both with Congress's pro-competitive intent and is good for television viewers.

But it's fair to point out that, even if Aereo wins and "MVPD" is given a technology-neutral meaning, the laws governing the media marketplace will hardly be structured in a completely rational way. Why should Aereo, to avoid making a public performance, have to set up its system to use lots of small antennas instead of one big antenna, the way that an MVPD does? Why should it be easier for an online system that offers continuous "channels" of programming to access content, than for an on-demand service?

These are very broad questions, and while I've thought about them (*cough*) I don't have all the answers. But broad questions about the future of media shouldn't take away from the incremental, case-by-case development of the law that both the Aereo case and the MVPD issue represent. While the media landscape certainly needs sweeping reform it's possible to make things better for consumers by taking things one definition at a time.

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