Copyright Office To Aereo: Quack All You Want, We Don't Think You're A Cable Service

from the quack-quack dept

As we’ve been discussing, following the Supreme Court’s decision that said Aereo was a cable service solely because it looked like one, and therefore had to pay retransmission fees, we warned that this would lead to a legal mess. Some people insisted Aereo could just start paying retransmission fees, but we wondered how that would fit with the ruling in the ivi case, that said internet companies didn’t qualify for statutory licenses on retransmission fees, because internet companies are not cable companies.

Aereo made a filing with the court that basically said that given the Supreme Court’s “look like a duck” test finding it a cable service, it seemed pretty clear that the ivi ruling was overturned, and thus it now wants a statutory license to pay retransmission fees. In addition to telling the court this, Aereo also filed with the Copyright Office its application to be eligible for those fees, leading the Copyright Office to send back a somewhat passive aggressive letter saying that it will “accept” the letter “on a provisional basis” but refuses to “process” it because, in its opinion, the ivi ruling means Aereo cannot be a cable company and nothing about the Supreme Court calling Aereo a cable company changes its opinion of that fact.

In the view of the Copyright Office, internet retransmissions of broadcast television fall outside the scope of the Section 111 license. Significantly, in WPIX, Inc. v. ivi Inc…. the Second Circuit deferred to and agreed with the Office’s interpretation of Section 111. As explained in that case, Section 111 is meant to encompass “localized retransmission services” that are “regulated as cable systems by the FCC.” … We do not see anything in the Supreme Court’s recent decision in American Broadcasting Cos. v. Aereo Inc…. that would alter this conclusion.

So… despite the fact that the Supreme Court ruled, pretty directly, that Aereo matches all the important criteria of a cable company to be covered by the laws that regulate cable company retransmissions, the Copyright Office is going to standby the ivi ruling that internet companies can’t be cable companies. As reader Gwiz pointed out last week, it’s Schrödinger’s CATV. When the Supreme Court looks at it for the purposes of making it infringement, it’s a CATV. When the Copyright Office looks at for the sake of actually paying those retrans fees, it’s no longer a CATV.

What’s perhaps even more troubling here is that there is no reason for the Copyright Office to weigh in here. As is noted in the letter, this issue is currently going to be determined in the courts, and the Copyright Office doesn’t need to do anything. But, instead, for no clear reason, it decided to offer its opinion and explain why it won’t “process” the letter. Either way, we’re left in a situation in which the Supreme Court’s ridiculous “quacks like a duck” test is creating confusion.

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Companies: aereo, ivi

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Comments on “Copyright Office To Aereo: Quack All You Want, We Don't Think You're A Cable Service”

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67 Comments
Quiet Lurcker says:

Re: Aereo should just say...

You may have something here. Let’s put it to the audience, here. LAWYERS, HELP ME OUT HERE. Ahem – sorry for the outdoor voice…

Isn’t there a thing in collections or debt law that says, if a creditor refuses payment of a debt, then either the debt goes away completely, or the collector is barred from further attempts to collect or some such.

Could the same principle be applied here? Could Aereo say that since they made a good-faith effort to comply with the law as it was interpreted to them, then they are no longer bound by that law? Sort of on the lines of ‘hey, we tried to pay our bill, but they wouldn’t accept our money, so now they can’t collect’?

TheResidentSkeptic says:

but what does this prove?

We all know that the level of stupid has surpassed the “hurts” layer – but does this show that our government is totally corrupt, or totally incompetent? Which index is higher? The GCI (gov’t corruption index) or GII (Gov’t Incompetence Index)..

… hmmm.. if I can get these on DowJones we can make a fortune betting on the one that goes highest…

Anonymous Coward says:

Re: Re: Re: It's not renting.

Re: Re:
I say that should go back into business, but sell the antenna and storage space to the viewer, say $99 for 8 hours, and $119 for 20 hours.

That sounds like renting.

It would be a one-time payment for setting up the account. Am I renting my Roku when I buy it? Nope. Free, exclusive, lifetime-access to my antenna that I now own. It just happens to come with online storage.

DogBreath says:

Re: Re:

It is possible, just barely, that the C.O. is actually attempting to provide Aereo some assistance here. Possibly, if this gets before the SC again, they can point to this “ruling” as evidence that no, they’re not a cable company?

In this case, isn’t that kind of like Aereo arguing that it’s not dead yet?

I think this is just the Supreme Court and the Copyright Office’s way of putting Aereo on the cart.

Vel the Enigmatic says:

Bah.

Who wants to bet this whole thing was a maneuver to put Aereo out of business entirely and for good with no chance of recovery? The big companies not only wanted to block Aereo from the market.

They wanted to make sure they couldn’t get the statutory license that they need to stay in the market either. It seems pretty clear to me that’s what it is. They didn’t only want to block Aereo, they want to make an example of Aereo by completely erasing them by force using shady deals.

Greevar (profile) says:

Re: Re:

I’ve been thinking exactly the same thing throughout this whole episode. Broadcasters were given the frequencies for the express reason to provide open access to programming. This just stinks from a mix of anti-competition and rent-seeking. It’s inevitable that when someone tries to serve the public something the incumbents aren’t but are expected to, the incumbents try to destroy it or force the service to give them a cut, as if Aereo’s existence has a negative impact on broadcasters’ revenues!

Why should anyone give them a cut? Why should anyone be pushed out of the market when the competition is serving people the incumbents are too apathetic to serve? They complain that companies like Aereo are [moral panic]enriching themselves through the use of the hard work of others.[/moral panic] So fucking what? Everybody that has made any effort to create content has enriched themselves through the use of others’ hard work. You can’t build a house without lumber and you can’t make lumber without trees. But, those trees grew all on their own. They did the work for us and we use them for raw materials. Maybe we should be required to pay the trees a cut of the lumber and construction industry’s revenue? We could cut some of them down to make the money we need to pay them!

Anonymous Coward says:

Re: Re: Let them pul their programming

I’ve thought about that before. It’s broadcast over public spectrum. They have that spectrum allocated to them for the public good. It doesn’t belong to them; they only lease it.

By broadcasting OTA, they are allowing anyone with a VCR/DVR et. al. to record the broadcast. Betamax anchored that right in concrete.

Congress needs to stop messing with copyright, and just go back to a 14-year term with a 14-year extension. Why should copyright last longer than the lifespan of the majority of the population?

Greevar (profile) says:

Re: Re: Re: If the real world worked like copyright...

Okay. I realize this is satire, but they were discovered, not invented.

Stars created the heavier elements that make up Hans Bethe. Therefore, Hans could not invent the process by which his most fundamental components were formed.

The same goes for Cavendish. It’s not possible to invent what is an inseparable part of the so-called inventor.

That’s like saying Newton invented gravity.

Anonymous Coward says:

Another clear illustration...

That the immorality of Statism results in ever more dangerous absurdities, as the point of Statism is for individuals to remove their adherence to universal morals (i.e., theft is immoral, the State renames it “taxation”; murder is immoral, the State renames it “war”; counterfeiting is immoral, the State renames it quantitative easing…etc etc etc).

The true solution here is to apply said morals to humans universally, no matter what fancy hat/badge/or title they may have.

The initiation of force is immoral (only self-defense is valid). Respect inherent self-ownership derived property rights.

Anonymous Coward says:

So the Copyright Office doesn’t recognize the Supreme Courts Classification of Aereo as a cable services provider under their current definition , This looks like Infighting between the powers that be ,with Aereo being the unfortunate man in the middle. Aereo needs to act on this angle and head back to court quick before the changes are made.

any moose cow word says:

Re: Re:

Yes, this is infighting between the powers that be, but it’s between the broadcasters who want free money from retransmit fees–they’re already paid by the ads Aereo rebroadcast–and the media companies who effectively control the copyright office and don’t want anyone outside of the current establishment to even get a foothold. Anyone with half a clue knows it’s all going to go online eventually, both the broadcasters and the media companies are just trying to drown anyone who can potentially supplant their control in order to maintain the status quo for as long as possible.

Whatever (profile) says:

not so silly

The copyright office’s stand is not silly at all. No matter what SCOTUS said, the status of Aereo is still undecided because they have not overcome all of the legal hurdles. the ICI case is a big one to get past.

Aereo appears to be trying to put the cart in front of the horse here. They need to get themselves in a position of being a true cable company, jump through the regulatory hoops, and then they can get to that point where the copyright office needs to handle them as a cable company. Just showing up and saying “yeah, we’re a cable company because SCOTUS says we walk like a duck” doesn’t cover it.

Anonymous Coward says:

Re: Re: Re: not so silly

and on top of that if you read between the lines.

They need to get themselves in a position of being a true cable company, jump through the regulatory hoops, and then they can get to that point where the copyright office needs to handle them as a cable company.

Aereo have not greased the right palms yet. They are just not corrupt enough, or paid those that are.

So the highest authority of law in the land says they are a cable company, and idiots like you still can’t admit you are wrong.

Whatever (profile) says:

Re: Re: Re:2 not so silly

It’s a lot of fun watching you guys get all huffy about things, without realize what you are talking about.

http://www.fcc.gov/encyclopedia/cable-system-registration

SCOTUS may say they are operating as a cable company, but until licensed, they are NOT a cable company in fact, just operating as one.

There is a very distinct difference between how you are operating and the concept of your operation being legal, licensed, and above board. Aereo doesn’t have anything besides SCOTUS saying they operation meets the technical requirements of a cable operation, so they must operate as one to be legal. That didn’t grant them a license to operate.

The difference is huge, and apparently just outside of the grasp of many people here.

PaulT (profile) says:

Re: Re: Re:3 not so silly

“SCOTUS may say they are operating as a cable company, but until licensed, they are NOT a cable company in fact, just operating as one.”

…and while being a smug twat, as always, you miss the actual problems this raises and the points raised as a result – the points being discussed by people who aren’t insufferable morons. See if you can work out what those are.

Whatever (profile) says:

Re: Re: Re:4 not so silly

the points being discussed by people who aren’t insufferable morons

Where would you fit in, then?

The “actual problems” stem from simply trying to run before they walk. The status of cable company for purposes of copyright (the issue Aereo faced) is regulated by agreeing to pay the appropriate fees as a cable operator. However, that classification is held only for licensed cable operators, which they are not.

So all the other “problems” aren’t really problems, they are just a result of failing to touch the correct (and obvious) regulatory bases. The copyright people are very much correct to tell them that they aren’t really qualified.

Oh, and keep your ad homs for your self. They aren’t needed!

J. S. Greenfield (profile) says:

Fact-check anyone?

Mr. Masnick, how much more could you get wrong in one posting? (Does anybody even attempt to do actual research, or to fact-check, anymore, before publishing?)

For the record, I believe that Aereo clearly qualifies as a cable system under the statutory definition at 17 USC 111(f)3. But pretty much everything you say in your article is wrong.

For starters, the Supreme Court made no ruling whatsoever respecting retransmission fees in ABC v. Aereo. Retransmission fees are not copyright royalties/license fees, and they were not at issue in the case. And what Aereo has attempted to pay are not retransmission fees, but copyright royalties/administrative fees pursuant to the statutory license of 17 USC 111(d). (Retransmission fees, on the other hand, are paid directly to broadcasters, after negotiation of retransmission consent.)

Furthermore, the Supreme Court most assuredly did not declare that Aereo “matches all the important criteria of a cable company” such that Aereo qualifies as a cable system for the purposes of section 111. (Some of the justices clearly indicated such during oral argument, and they should have commented on the matter in dicta…but they didn’t.)

Finally, the Copyright Office isn’t adhering to the Ivi decision. The Ivi decision adhered to the Copyright Office, which has always and consistently (long before Aereo, and Ivi, too, for that matter) imposed additional, extra-statutory criteria on its recognition of “cable systems” under section 111. And it is not the least bit surprising for the Copyright Office to continue to take the view it always has, and handle the matter as it did. That this seems to surprise you, and that you see no clear reason for such, is a product solely of your lack of understanding of the matters on which you are commenting.

The SDNY court hearing the Aereo case on remand ought to conclude that Aereo qualifies as a cable system under 111(f)3, at which time, the Copyright Office ought to accept that ruling (though given what happened at the Supreme Court, there is certainly no assurance they will). Regardless, it is no surprise at all that the Copyright Office decline to recognize Aereo as a cable system on their own, ahead of such a ruling.

Those who are interested in accurate information respecting this matter should see:

Overcoming Ivi to Qualify as a Cable System

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