Aereo Update: And the Question is . . . [telecom]

By Harry Cole, CommLawBlog, January 26, 2014

| The Supremes opt to use the broadcasters' formulation of the | question to be resolved by the Court. | | OK, all you Supreme Court tea leaf readers, you've got another leaf | to read in the Aereo case. According to the Supreme Court's | website, the "question presented" that the Court has decided to use | as the focus for briefing in that case is this: | | "A copyright holder possesses the exclusive right "to perform

| Copyright Act of 1976, Congress defined the phrase "[t]o | perform ... 'publicly'" to include, among other things, "o | transmit or otherwise communicate a performance or display of | the work ... to the public, by means of any device or process, | whether the members of the public capable of receiving the | performance or display receive it in the same place or in | separate places and at the same time or at different times."

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Neal McLain

Reply to
Neal McLain
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But in your quotation, you trimmed what the actual question was:

Whether a company "publicly performs" a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers over the Internet.

Aereo's answer to this question is, of course, going to be "no": their claim all along is that they are renting the use of an antenna and a DVR to their customers, and that to the extent any retransmission is being done, it is being done by the customers themselves.

The court's selection of this particular formulation of the question presented, as the blog author notes, suggests that Aereo is going to have a tough row to hoe. It's by no means impossible; I would not be surprised, actually, if Aereo conceded the question as written (which seems obvious from copyright law), and focused its briefing on its claim that it is not the entity doing the retransmission, its customers are. How successful this strategy could possibly be may depend on what factual record was developed in the lower courts -- did the broadcasters concede, or the trial court conclude, for example, that Aereo does allocate individual antennas and tuners to each customer?

-GAWollman

Reply to
Garrett Wollman

IANALB ISTM that Aereo's would do better by focusing on the root issue: so long as Aereo is not modifying the television signal, and is passing the commercials through untouched, I don't see why the TV stations have a problem.

Bill

Reply to
Bill Horne

IANAL either, but I think there are two reasons "why the TV stations have a problem":

[1] COPYRIGHT LAW. As I noted in a previous T-D post, (*) if a broadcaster buys the rights to a copyrighted work, the agreement between the broadcaster and the copyright owner can (and presumably does) stipulate the conditions under which the copyrighted work can be used. To the extent that Aereo reuses a copyrighted work above and beyond the stipulations set forth in the agreement, the copyright owner has reason to assert a claim of infringement. The same principle applies even if the broadcaster itself is the copyright owner.

Even though most of the plaintiffs in this case are broadcast station licensees or their affiliated networks, they brought the case under copyright law, not communications law.

[2] COMMUNICATIONS LAW. Broadcast station licensees make a lot of money from retransmission-consent fees paid by MVPDs for the right to retransmit broadcast signals. Aereo does not pay retransmission-consent fees; understandably, broadcasters object. But the broadcasters' real problem isn't simply the loss of retransmission-consent revenue that Aereo doesn't pay -- it the potential loss of revenue that could occur if the Supreme Court upholds Aereo and MVPDs start doing the same thing.

I think it's worth noting that, except for Comcast (which owns NBC), most cable TV operators are sitting out this case, letting the copyright owners fight it out with Aereo. But if Aereo wins this case, cable TV companies will be able to do the same thing, thereby avoiding retransmission-consent fees.

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Neal McLain

Reply to
Neal McLain

Never mind that: the broadcaster owns a compilation copyright on their broadcast output -- syndicated programs, network programs, local programs, *and* commercials integrated into a single product -- and that would be sufficient to deny Aereo the use of the signals if Aereo is found to be engaged in "public performance". (I don't know if ABC actually made a claim for compilation copyright in the lower courts; if not, they forfeited that particular issue on appeal, but have other grounds as Neal rightly notes.)

Most MVPDs are not architected to emulate the Aereo model, and they have contractual relationships with many big broadcast groups thanks to the non-broadcast programming they carry that could make it difficult to do so. Satellite in particular has no way they could do what Aereo does, since it is purely a broadcast medium. Cable providers in many areas would have difficulty siting Aereo-style tuner/antenna arrays in sufficient number to serve all of their customers close enough to the transmitter sites to get usable signals. Aereo has chosen its initial markets carefully; don't expect them to build out Rockford or El Paso any time soon.

-GAWollman

Reply to
Garrett Wollman

On Monday, January 27, 2014 12:16:21 PM UTC-6, Garrett Wollman wrote: In article

But the broadcaster still has to enter into some sort of deal to obtain the right to the programming it broadcasts even if it rolls them all into a compilation copyright on the end product. The counterparty of that deal may be an affiliated broadcast network, a syndication vendor, a production company, an employee's paycheck, a musician, a photographer, a scene designer, a carpenter, whatever. And one or more of these counterparties is surely going to base its price on the number of end users -- in this case viewing households.

Agreed. But they can certainly build the necessary architecture if the financial return justifies it.

True, in cases where the big broadcast group (e.g. ABC stations) is co-owned by the same company (e.g. Disney) that owns the non-broadcast programming (e.g. ABC Family; ESPN). Independent group owners (e.g. Belo and Sinclair) usually don't sell non-broadcast programming.

MVPDs already have satellite signals at their headends. Obviously they couldn't distribute them without carriage agreements with the program suppliers. And yes, they'd have to pay license fees for carrying them no matter which technology they use for distribution -- NTSC, "digital cable", or IP.

I agree that some big programmer could try to engage in reverse bundling -- something like "if you want to carry ESPN, you have to pay retrans-consent fees for the ABC station even if you pick it up with an array of tiny antennas." That could precipitate an interesting lawsuit under the Sherman Act.

In my experience, it's the other way around. It's easier and cheaper to lease a corner of a farmer's field a few miles out-of-town than the top floor (or rooftop) of an urban building.

Like the radio, television, telephones, electric power, running water, sanitary sewers, even the internet, Aereo is starting in the major markets. If it survives the current legal spat (and if the ROI justifies it), my guess is that it will work its way down to smaller DMAs including Rockford and El Paso.

At this point I have to note the exception to the above rule: Cable Television. CATV started in rural communities and then worked its way into larger communities. The eternal question -- which one came first? -- remains a mystery. My friend Robert B. "Coop" Cooper has written an exhaustive study of this question. I have posted it on The Old CATV Equipment Museum website at:

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Neal McLain

Reply to
Neal McLain

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