Aereo Says A Win For Broadcasters Would Have “Chilling” Consequences To Cloud Computing

Aereo has today filed its response brief with the Supreme Court in a case that will make or break the streaming TV startup. So far, we’re in the preliminary stages of this particular case, with the broadcasters filing their initial briefing in March, arguing that Aereo violates copyrights by retransmitting broadcast signals as a “public performance.”

Today, Aereo responds to the briefing with a briefing of their own, as well as a public statement on the case:

Last December, we decided to not oppose the broadcasters’ petition for certiorari before the United States Supreme Court. Today, we filed our response brief setting forth the basis for our steadfast conviction that Aereo’s cloud-based antenna and DVR technology falls squarely within the law. We have every confidence that the Court will validate and preserve a consumer’s right to access local over-the-air television using an individual antenna, make a personal recording with a DVR, and watch that recording on a device of their choice.

The broadcasters are asking the Court to deny consumers the ability to use the cloud to access a more modern-day television antenna and DVR. They are asking the Court to confine consumers to outdated equipment and limit their access to lawful technology in order to protect a legacy business model, the success of which is built on eliminating consumer choice and competition in the marketplace. Broadcasters should not be able to use the Courts or misuse the Copyright Act to drive forward what they believe are their most lucrative business models, at the expense of consumers.

If the broadcasters succeed, the consequences to American consumers and the cloud industry are chilling.

The long-standing landmark Second Circuit decision in Cablevision has served as a crucial underpinning to the cloud computing and cloud storage industry. The broadcasters have made clear they are using Aereo as a proxy to attack Cablevision itself. A decision against Aereo would upend and cripple the entire cloud industry.

Since the beginning of television, consumers have had a fundamental right to watch over-the-air broadcast television using an individual antenna, and they have had the right to record copies for their personal use since the U.S. Supreme Court Sony Betamax decision in 1984. These are rights that should be protected and preserved as they have been for generations.

We look forward to presenting our case to the Supreme Court on April 22 and we have every hope and confidence that the Court will continue validate and preserve a consumer’s right to use lawful technology innovations like Aereo.

We’ve also embedded the full court briefing at the bottom of the post.

The main question put before the SCOTUS is whether or not Aereo’s service constitutes a public or private performance.

In their response, Aereo argues that its service — which pulls live broadcast OTA signals into dime-sized antennas/remote DVRs that are controlled by individual Aereo subscribers — falls squarely within the law based on a precedent set by Cablevision in 2008.

In that case, Cablevision won against broadcasters when it argued that its remote DVR service wasn’t a public performance just because the content itself wasn’t stored locally on the device.

See, when you record a show to your DVR, you own an individual copy of that show. You can rewind and fast-forward as you please. Because it’s an individual copy, recorded and operated by you, it makes no difference whether that content was delivered from a cloud connection or stored locally on your device. It’s a private performance, not a public one.

This precedent not only protects Aereo, but protects the way we cloud compute. Without it, watching a copy of a movie that you legally own by streaming it from Dropbox could be considered illegal.

Aereo was built with the Cablevision precedent in mind.

The service uses newer technology to achieve the same goal as a pair of rabbit ears above the TV, except that Aereo’s service delivers that content through the internet and offers a DVR service.

See, what you pay for when you use Aereo is your own little antenna, stored in a local Aereo operations center. As a subscriber to the service, you have control over that antenna the same way you would if it was in your home. You tune it to pick up free, over-the-air broadcast signals to watch the shows you want.

Whether you’re watching live or recording for later, the content you’re watching is always a recording. As soon as you press watch on Aereo for live TV, you tell the service to begin recording. Even though it’s only delayed by a couple of seconds, you’re not watching the same transmitted broadcast from the network, but rather watching your own recorded copy of that broadcast, which you tuned into using your remote antenna.

Because you, as the user, activate an individual antenna, tune to the content you want, and record it, Aereo argues that it is an individual copy and thus a private performance, based on the Cablevision precedent. This argument has held up in similar cases last year in New York, and Boston, though a Utah judge recently imposed a preliminary injunction against the startup, marking the first major legal defeat since launch.

However, the SCOTUS case, set to be heard on April 22, may offer some relief to Aereo, which has been under the gun since broadcasters caught wind of the service. And it was pretty hard to ignore, with media tycoon Barry Diller leading investment in Aereo.

Though a Supreme Court ruling in favor of Aereo would settle the topic of public vs. private performance, it surely won’t end the broadcasters’ rampage against Aereo. They will undoubtedly bring up other arguments in as many markets as possible to tire out Aereo.

Luckily, the NY-based startup has over $100 million in funding and seems to be growing rapidly as it expands into new markets. In fact, we’ve even seen some markets sell out of capacity in the past few months.

In short, this story is far from over. Stay tuned!

Aereo Response Brief (March 26, 2014) FINAL FILED