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Today, the Supreme Court decided it will hear a case that could determine the future of many online computing services, with additional implications for the video marketplace.
Today, the Supreme Court decided it would review the Second Circuit's decision that online service Aereo was not infringing copyrights in television programming. In April of last year, the appeals court in New York held that Aereo was not violating the copyright holders' public performance right when it transmits over-the-air broadcasts to individual users on the Internet.
The reason for that is that copyright holders don't have the right to prevent private performances of their works—only public ones. So, for instance, you aren't infringing any copyrights if you set up an antenna on your upstairs neighbors' rooftop and run a cable from that down to the TV in your basement apartment. You would, however, be infringing copyright if you ran cables from that antenna into every apartment in the building.
Aereo avoided liability by replicating the individual antenna scenario. They created miniature antennas that would be rented to their subscribers. That way, each person got their own private signal, instead of Aereo taking one signal and blasting that out to all of their subscribers. This reasoning follows straight from another Second Circuit case from a few years ago, where Cablevision set up a remote DVR service that stored the programs that subscribers recorded on banks of hard drives on Cablevision property. When users wanted to play back the shoes they had recorded, the court said, Cablevision was making private performances with those separate signals, not public performances.
There are two big reasons why it's important to us that this case comes out the right way. First, there are the implications for copyright law, which go far beyond just Aereo and other companies like it. If the Court decides to expand the definition of public performance in the way that the plaintiffs want, it could turn any number of legitimate cloud storage providers into copyright infringers. For instance, let's say I have a favorite mp3 that I've legitimately bought, and I upload it into a cloud locker, where it's only accessible to me. And let's say someone else uploads their copy of the same track to the same service. If we use an expanded definition of public performance, the mere fact that the same work can be transmitted to more than one person would mean that any cloud storage company could become a "public performer" of the works its customers store in their own private lockers. This would be devastating to cloud computing (by which I mean, basically, the use of servers), and could kill a lot of useful new services in the cradle.
The second reason is that Aereo represents one of many different types of companies trying to come up with new ways for consumers to get video programming, despite the thicket of laws and incumbent industry interests that have accumulated over the last few decades. The mere fact that Aereo exists suggests that there's something wrong with the way that broadcast TV, which is supposed to be free-to-air anyway, is making its way to the public. The massive amounts of the public airwaves that have been set aside for the broadcasters to use, essentially for free, was supposed to be in exchange for them meeting certain public interest obligations, including making sure that people can get access to the programming subsidized by that grant of the radio spectrum.
The case is not likely to be heard for several months, but as we've participated in the disputes below (and in related cases like FilmOn and the precedent-setting Cablevision), keep an eye here for more.