Supreme Court Says “No” to Aereo

In January I wrote about Aereo, a TV subscription service that delivered local over-the-air TV channels via your Internet connection to a variety of digital devices and enabled you to record, pause and fast forward the programs.  In essence, it was a personal antenna and DVR in the cloud.  (Full disclosure … I was a beta tester for the fledgling service)

When you signed up for Aereo you had access to all the local TV channels.  By my count there were 24 TV channels available to Cincinnati area viewers.  They included the main channels like WCET, WCPO, WLW as well as all the multicast channels available with digital broadcasting.

To watch any program you used your computer, tablet or smartphone to access the Aereo.com web site and, using the program guide, you could choose the program you wanted to watch or record.  You could watch live, or choose to record a program selected from the on-screen guide up to two weeks in advance.

As reported in January, the broadcasters were not happy about Aereo since the company did not pay them retransmission fees.  These fees are paid to commercial broadcasters by cable and satellite services and are a source of billions of dollars for the TV stations.  The broadcasters and the National Association of Broadcasters, their lobbying group, petitioned the courts to force Aereo to either pay the fees, or cease operation. Late in June, the Supreme Court ruled in favor of the broadcasters.

Aereo had argued that since they were using individual small antennas (one dedicated to each subscriber) to pick up the TV broadcasts and the internet to provide the programs, they were only serving as an enabling agent for each subscriber allowing them to exercise their right to watch and record over-the-air broadcasts for free.

Without going into all the complicated legal prose, suffice it to say the Supreme Court did not buy the argument and essentially said that Aereo was trying to manipulate the intent of the copyright laws governing fair use of broadcasts by individuals in their homes.  So as of last week Aereo is no longer in operation.  Their future is still uncertain.  The company could decide to pay broadcasters the retransmission fees but that would require a significant increase the monthly subscription price for the service.

Many in the industry were concerned that high court’s opinion would have a stifling impact on the operation of other cloud-based services like Dropbox or iCloud.  These services often allow individuals to store and retrieve copyrighted materials.

I’ll keep an eye on this issue and report back.  I don’t think we have seen the last of Aereo or other similar services.