UPDATED WITH REACTIONS: Television broadcasters can breathe a sigh of relief after the Supreme Court ruled this morning that the Barry Diller-backed service violates their copyrights when it streams their transmissions without their permission. In a 6-3 opinion, the court reversed and remanded the decision of the 2nd Circuit in the broadcasters favor. The opinion equated Aereo to a cable company, thereby equaling its transmissions of the broadcasters’ material to a public performance under the Copyright Act. That remand means the broadcasters could get the injunction against Aereo they have long been seeking. As was expected, Associate Justice Stephen Breyer wrote the decision (read it here) released this morning; he asked the most questions by far of the lawyers during oral arguments in April. Saying Aereo does not constitute a public performance, Associate Justice Antonin Scalia dissented today’s opinion. He was joined by associate justices Clarence Thomas and Samuel Ailto.
The Court today also addressed concerns raised by Aereo and others that a loss for the streaming service could have grave implications for cloud technology, among others.“Given the limited nature of this holding, the Court does not believe its decision will discourage the emergence or use of different kinds of technologies,” said the 18-page opinion.
“Today’s decision is a victory for consumers,” the broadcasters’ lawyer Paul Clement said today. “The Court has sent a clear message that it will uphold the letter and spirit of the law just as Congress intended.” Clement, a former Solicitor General, represented broadcasters during oral arguments.
This is a big loss for Aereo, which until now has prevailed in the majority of its legal battles with broadcasters including CBS, Disney, Fox, and Comcast’s NBCUniversal. On April 2, Diller sent shivers through Aereo CEO and founder Chet Kanojia and other execs when he said that the company “probably would not be able to continue in business” if it lost at SCOTUS. If Aereo had won, many industry watchers said broadcasters could lose their clout to force cable and satellite companies to pay billions for the right to retransmit their programming.
“It’s over,” Diller told CNBC this morning after the ruling was handed down. Kanojia had a different take: “We are disappointed in the outcome, but our work is not done. We will continue to fight for our consumers and fight to create innovative technologies that have a meaningful and positive impact on our world.”
In oral arguments at the Supreme Court on April 22, Clement aaid that Aereo was stealing the broadcasters’ material. In essence his argument was that the Copyright Act requires people to have permission from content owners before offering their properties to the public and Aereo does not have that permission. Aereo’s lawyer David Frederick said that it simply leases antennas and technology that consumers can already use to watch broadcast TV for free. Aereo added in its argument and briefs that broadcasters’ attempts to shut it down could also limit the rights of consumers to store and access videos, music and other media using cloud-based technology. Stripped to its essence, Aereos argued that broadcasters were attempting to put technological progress back in the bottle.
Still, the service was slammed twice at the SCOTUS hearing by Chief Justice John Roberts, who told Frederick that “your technological model is based solely on circumventing legal prohibitions that you don’t want to comply with.” Beyond that, unlike many oral arguments before the Justices, their questions and tone provided little indication of where the majority stood on the issue.
Just over a week after the SCOTUS hearing, CBS’ Les Moonves told the Milken Conference in LA that he “felt good about our chances in the Supreme Court. The mogul also said that he’d “stand by my statement that we have another alternative if we lose.” Diller told Bloomberg Television’s Market Makers that if Aereo won it would expand from the less the 20 cities it is in or planning to be in now to “the top 30-40 markets.”
Following almost continuous legal actions since Aereo’s early 2012 launch in NYC, Disney, CBS, NBCUniversal, WNET, Fox, and Univision made their big move on October 11 last year and petitioned the SCOTUS to review an April 1, 2013 ruling by the U.S. Court of Appeals in New York. That ruling upheld a previous District Court decision and rejected the broadcasters’ request for a preliminary injunction against Aereo. Even though that matter remains before the lower court, the Justices agreed on January 10 to hear the case.