The 10th Circuit Court hands Aereo, an Internet rebroadcaster of network programming, its first legal defeat.
Helping to cut dependency on local cable and satellite service monopolies, Aereo.com allows users to view live and time-delayed television programming via Internet-ready devices – tablets, smartphones, PCs, etc. For a small fee Aereo.com grants users access to local broadcast television (i.e. NBC, ABC, CBS, Fox, etc...) via Aereo's website or applications on certain Internet devices. Users such as those who have difficulty receiving stations through traditional antennae could access this programming received by Aereo's antennae and rebroadcast to those end users. For an additional fee users could utilize Aereo's servers to store up to 60 hours of such broadcasting for later viewing.
However, the Los Angeles Times has recently reported that the Long Island, N.Y. technology firm Aereo has been ordered to cease operations in the Tenth Federal District, including Colorado and Utah, by ruling of a federal judge of the Circuit Court of Appeals. The plaintiffs in the case include the Fox Broadcasting Company, along with Sinclair Broadcast Group and Nexstar Broadcasting Co.
Up until the time of this decision, the company has enjoyed a series of legal victories against the networks, which have thus far allowed the company to continue broadcasting current programming without legally infringing upon its copyright holders.
But, in his 26-page decision, Judge Dale Kimball wrote,
Based on the plain language of the 1976 Copyright Act and the clear intent of Congress, this court concludes that Aereo is engaging in copyright infringement of Plaintiffs' programs. (“Federal Court in Utah Sides with Broadcasters Against Aereo.”)
The pivotal legal question considered by the judge asks whether Aereo’s retransmissions are public performances or not. If they are deemed to be, then Aereo must obtain consent from the original content provider in order to broadcast, and if necessary pay providers a licensing fee. Previously, a federal appeals court in New York sided with Aereo on this matter by ruling that its retransmissions are not public performances. But, the recent decision in Utah calls this ruling into question.
In the wake of these contradictory decisions, the U.S. Supreme Court has agreed to hear arguments by two other national broadcasters, ABC and NBC, who likewise have taken issue with Aereo. The hearing is scheduled to occur in April of this year.
The issue at hand remains a contentious one. On one side, Aereo founder and CEO Chet Kanojia sees his company as simply offering a segment of consumers exactly what they want.
We firmly believe in the idea that change and progress should be made. There is no logic in me paying for 500 channels that I don't watch. There is no incentive on the incumbents to change, so it takes somebody like us … to come in and say … life is changing. (“SXSW Diary: Aereo, The Supreme Court and TV's Future.”)
Additionally, in response to the recent 10th Circuit Court decision, Kanojia added that consumers
have a fundamental right to watch over-the-air broadcast television via an antenna and to record copies for their personal use.
But, the nation’s major broadcasters disagree and are prepared to have their views heard once again, this time in the highest court of the land.
This case harkens back to a day in the not too distant past when broadcast commercial television in the United States was essentially free. Anyone with a television set and an antenna could receive these transmissions at no additional cost. Times have changed and the television market has since been flooded with new competitors, including cable companies, dish and satellite providers, and more recently online subscription services such as Netflix and Hulu, which stream programming content. Today, the once dominant broadcast networks have seen their market-shares dwindle and in many cases have had to battle with smaller companies boasting new or (as in the case of Aereo) updated technology. Now it is up to the U.S. Supreme Court to carefully examine this case and decide something very fundamental about the merits of consumer choice and the future of broadcast television in this country.