The fallout from the Aereo decision has already begun

Last week, the Supreme Court killed Aereo’s business with a 6 to 3 ruling that some have dubbed the “looks like a duck” test. Justice Breyer, writing for the majority, summarized Aereo’s model as one that was “identical to the old cable systems” and therefore was essentially a cable system itself and should be under the same rules as today’s cable companies.

Given Aereo’s overwhelming likeness to the cable companies targeted by the 1976 amendments, this sole technological difference between Aereo and traditional cable companies does not make a critical difference here……..But this difference means nothing to the subscriber. It means nothing to the broadcaster. We do not see how this single difference, invisible to subscriber and broadcaster alike, could transform a system that is for all practical purposes a traditional cable system into “a copy shop that provides its patrons with a library card.” – American Broadcasting Companies, Inc. v. Aereo, Inc.

Justice Breyer then goes on to write that Aereo’s service was in fact a “public performance.” One of the many problems with this statement is that the majority opinion does an absolutely atrocious job narrowing the decision to just Aereo’s situation, most likely because they couldn’t.

Timothy Lee at Vox.com spoke to James Grimmelmann, a legal scholar at the University of Maryland, who summed up the majority opinion:

“The court is sending a very clear signal that you can’t design a system to be the functional equivalent of cable. The court also emphasizes very strongly that cloud services are different. But when asked how, it says, ‘They’re just different, trust us.'” – Vox.com

In fact, as Mike Masnick notes, the way that the Supreme Court decision is written, Aereo could simply take away live TV viewing and become a DVR service. This would allow customers to watch TV on their ‘own schedule‘ which, based on the majority decision, would mean that Aereo is no longer part of a “public performance.”

As Justice Scalia wrote in the dissent, the majority used a “resemblance” test that is not found in actual law since simply acting “similar to Cable TV” is not an actual crime. Therefore, cloud storage systems should in fact be worried because the definition of a “public performance” just got extremely more difficult to figure out in today’s tech world. The Supreme Court could have easily saved cloud computing from such worries by stating that the cloud companies don’t infringe when they do “nothing more than operate an automated, user-controlled system.”

The Supreme Court did not write that because if they had, it would have saved Aereo from any liability. Not to worry says corporate-funded sites like CopyrightAlliance.org. They say that this is a boon for technology! Yet, as reality shows time and time again with the cable industry, the first thing that occurred after Aereo was yet another lawsuit by the TV industry.

“A day after a surprise US supreme court decision to outlaw streaming TV service Aereo, US broadcaster Fox has moved to use the ruling to clamp down on another internet TV service. Fox has cited Wednesday’s ruling – which found Aereo to be operating illegally – to bolster its claim against a service offered by Dish, America’s third largest pay TV service, which streams live TV programming over the internet to its subscribers and allows them to copy programmes onto tablet computers for viewing outside the home.” – TheGuardian.com

Nevermind that Fox has already lost a number of times in trying to stop Dish from allowing customers to use this basic and helpful technology, the Aereo decision has sent a clear message to Fox that they must stop this technology from spreading. Again, Dish is simply allowing customers to watch live TV or programs on their DVR on their phones, tablets and computers. That is it.

But according to Fox’s legal team, since the Supreme Court ruled that Aereo’s service is illegal, Dish’s technology constituted an “unauthorized public performance of Fox’s copyrighted works.” This after Dish ALREADY HAS A LICENSE to broadcast Fox programing.

As Jason Buckweitz, associate director for the Columbia Institute for Tele-Information, states in the Guardian piece, the fact that Dish has a license likely won’t stop Fox because the Aereo case will be cited “by broadcasters looking to reach better terms or shut down new services they believe harm their businesses.”

“They do not want to let go of what works for them,” he said. “What’s sad is that the brakes are going to be put on innovation. Do you want to be a company that tries new things or do you want to play it safe?” – TheGuardian.com

The cable and broadband industry are already known as the most backwards thinking groups in the world. As former Time Warner Cable CEO Glenn Britt (who sadly passed away recently) stated last year:

Time Warner Cable CEO Glenn Britt revealed for the first time that the company has more than 300 contracts with content creators, and many of those contracts ban companies from offering their content online. Sources tell Bloomberg this is a fairly common occurrence, though cable companies, most of whom profess to love the “free market” at every possible opportunity, refuse to comment publicly on them. – DSLReports.com

Go Innovation!

When Leslie Moonves, the chief executive of CBS, was recently asked for comment about the Aereo decision, he repeated the same line as always….want the online streaming? Pay us substantially for a number of un-watched channels or else. Therefore, the public should expect the TV industry to continue vastly over-pricing their services and demanding substantial sums of money for the right to stream content already purchased.

Jason Bloom, a partner with Haynes & Boone in Dallas told Forbes that Aereo’s decision could be used against any service that allows its users to traffic in infringing materials such as YouTube.

“What the cloud does and what Aereo does are much more similar than what the cloud and an internet service provider does,” Bloom said, however. If enough users uploaded a bootleg copy of a movie to iCloud and then distributed it to their friends, that might also cross the line into a “public performance” under the court’s reasoning today, he said. – Forbes.com

Not to worry, Jason Bloom. Knowing the TV and Cable industry, it is doubtful they will try to cross that line. It isn’t as if the TV industry is known as the most backwards, restrictive industry in American history innovation-wise.