Former FCC Official Attempts To Create An Aereo That The Supreme Court Won't Kill

from the quack-quack dept

If you’ve been following copyright issues for more than a few years, you surely remember Aereo, a company that attempted to set up a bunch of micro-TV antennas which it could then use to stream broadcast TV to paying subscribers. What was fascinating about Aereo was how it was set up in a manner that was positively insane to any technologist — but was considered “necessary” to comply with the law, following a bunch of nonsensical copyright rulings from other companies trying to offer streaming TV. And, incredibly, its careful following of the rules was declared to be proof that it was trying to “get around” the rules.

And then, even more bizarre, the Supreme Court ruled against Aereo using no actually defined standard, but basically just saying that it looked too much like a cable service, so they’ll call it a cable service (something I’ve referred to as the Supreme Court’s “looks like a duck” doctrine). As we pointed out at the time, part of the problem with such a weird test is that it provided zero guidance to tech innovators who wanted to build a system within the law. Basically, the Supreme Court (or lower courts) can now decide that something “looks” too much like another system, and decide it’s magically illegal… just because.

However, it appears that at least one operation is trying again with an Aereo-like approach. And once again, it’s taken a very legally-focused approach. Perhaps that’s because it’s been set up by a lawyer, David Goodfriend, who formerly worked for the FCC (and in the media industry). The NY Times has a big article about his Locast operation, and how he’s hoping to get sued to prove that his approach is legal, where Aereo’s failed. The basic approach does sound quite like Aereo:

On the roof of a luxury building at the edge of Central Park, 585 feet above the concrete, a lawyer named David Goodfriend has attached a modest four-foot antenna that is a threat to the entire TV-industrial complex.

The device is there to soak up TV signals coursing through the air ? content from NBC, ABC, Fox, PBS and CBS, including megahits like ?This Is Us? and this Sunday?s broadcast of Super Bowl LIII. Once plucked from the ether, the content is piped through the internet and assembled into an app called Locast. It?s a streaming service, and it makes all of this network programming available to subscribers in ways that are more convenient than relying on a home antenna: It?s viewable on almost any device, at any time, in pristine quality that doesn?t cut in and out. It?s also completely free.

There are a couple of difference between Aereo and Locast, starting with the fact that Locast is offering its services for free. The second is that Locast is set up as a non-commercial entity, rather than a for-profit company (which also helps explain the “free” to subscribers bit). And it is true that copyright law is somewhat kinder to non-profits. But just barely. Goodfriend thinks he’s on solid legal ground, though, to be fair, so did Aereo.

?We really did our homework,? he said. ?We are operating under parameters that are designed to be compliant within the law.?

He also notes, correctly, that the whole point of over the air terrestrial broadcasts is that they’re supposed to be available for free, to anyone with an antenna. That was kind of the whole point. On top of this, of course, courts have already said that it’s perfectly legal to stream content that you capture legally via an antenna over the internet for viewing. The real difference here, as it was with Aereo, is just who technically owns the antenna.

?The American people have given you something really valuable, the airways, for free,? he said, talking about the broadcasters, his eyes popping at the word ?free.? Slowing down for emphasis, he added: ?So shouldn?t we get something back for free? Which is great television. That?s the social contract, right??

The article further notes that Goodfriend — who initially designed the idea of Locast while teaching the Aereo case to law students at Georgetown — would “welcome a legal challenge” from the TV networks to prove that his approach is legal — though it’s unclear if the networks feel like going after him. The article quotes Aereo founder/CEO Chet Kanojia, who points out that the networks ignored Aereo until it raised a bunch of money from Barry Diller, and then suddenly it became worth it to sue. Goodfriend notes that he’s currently chasing down funding deals, even approaching his own version of Barry Diller in Dish Network’s Charlie Ergen (for whom Goodfriend used to work), but so far has not closed anything.

Assuming Locast actually does start to catch on (and a big story in the NY Times certainly will give it a pretty big bump), I would be surprised if the networks didn’t eventually sue, and then we get to go through the Aereo debate all over again. Quack, quack, quack.

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Companies: aereo, locast

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Comments on “Former FCC Official Attempts To Create An Aereo That The Supreme Court Won't Kill”

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24 Comments
Mason Wheeler (profile) says:

I still don’t see how the Aereo case had any legal basis in the first place. Broadcasters are… well… broadcasting their content. Literally by definition, they are giving it away for free to anyone with an antenna; it’s paid for by advertisers, not consumers.

How, then, does any argument predicated upon "consumers aren’t paying us for this content, therefore torts and damages and injunctions" not get instantly laughed out of court? The entire case was literally insane from start to finish.

James Burkhardt (profile) says:

Re: Re: Re: Re:

So, the issue again is the simplistic view you hold of what is going on.

The sale of the spectrum included a ban on a cable companies capturing and re transmitting the content over cables without a licence. There are a number of reasons for this, but debating if this should be the case is not in the scope of your question. The question is how they could have decided against Aereo.

Aereo was specifically designed to avoid re-trasmisssion rules by ensuring they never split the broadcast, what was captured by your antenna is what you viewed. However, as Mike noted here and at the time, the SCOTUS decided to implement the ‘looks like a duck’ test – that because Aereo looked like it operated as a cable company, it was a cable company, even though the technical details are very different and specifically designed to not actually be a cable company.

It was bizzare, but how they got there is understood. Wrong, but understood.

Mason Wheeler (profile) says:

Re: Re: Re:2 Re:

There are a number of reasons for this, but debating if this should be the case is not in the scope of your question.

I disagree; that’s pretty much the entirety of my question. How does it make any sense to allow them to charge for something that they are already giving away for free because someone else already paid for it?!?

Saying "because spectrum sales set it up that way" merely moves the question back a step, and it’s very frustrating to have that be immediately followed by "because reasons which we aren’t going to discuss here." That is what I’m trying to discuss here: what justification can there possibly be for that?

Mike Masnick (profile) says:

Re: Re: Re:3 Re:

I disagree; that’s pretty much the entirety of my question. How does it make any sense to allow them to charge for something that they are already giving away for free because someone else already paid for it?!?

Then your problem goes way back beyond Aereo, and your initial post should have been questioning what happened with the cable companies during the retransmission fights decades ago, rather than with Aereo…

Anonymous Coward says:

Copyright has no mechanical licensing like music. It also provides for control over distribution, which is lost here.

The fair-use test is interesting here though Aereo will probably lose since it has to be deriving revenue from its customer list. That could very easily be monetized down the road, or sold to a for-profit entity.

A mechanical license would ensure compensation for this by placing a value of X on each consumer, something the networks had to have already done.

Anonymous Coward says:

Re: Re:

What in the world are you even talking about?
First sentence, did you mean TV instead of ‘Copyright’? What provides control over distribution? TV, yes, sort of, if a giant electromagnetic blast is control; mechanical licensing, not at all, and actually the opposite.

Aereo? You mean Locast? It’s not a fair-use test. It’s about the regulation of the behavior of a nonprofit. Related to that, nonprofit is not the same as non-revenue.

"a value of X" – You mean the value that the TV station already figured when they SOLD the ADS that are supporting the BROADCAST network? Or do you mean that the broadcasters will pay Locast to compensate their network expenses to get another viewer on their broadcast channel? A music mechanical license is for a radio station (or whatever) to use when they broadcast just the song. Locast is relaying a show along with the ads that paid for the show in the first place. That "value of X" is already being captured by the broadcaster.

I can’t understand anything you’re trying to assert.

Jason says:

Re: Re:

Network tv relys on ads for revenue , surely they want as much people watching their content as possible

That’s what boggles me most about the "broadcast fee" on cable bills. I could sort of accept an extra fee to get some distant, faraway "local" channel included on my cable if I wanted it badly enough, but to be charged almost $10 a month (or more, probably, once the fallout from the latest Tribune dispute hits my bill) for channels that I watch on my antenna is infuriating. If anything, broadcasters should be paying the cable company for all those extra eyes watching their channels.

morganwick (profile) says:

Re: Re: Re:

The problem is, cable channels also collect revenue from ads, and also make money by charging cable companies to carry their channels. When cable first came along, the fact broadcast stations were available for free to everyone, and thus their programs and ads reached a broader audience, made up for this, but as cable achieved ubiquity, suddenly cable channels were collecting similar amounts in ad revenue and the extra money they were making from cable companies was more than enough to overcome what was by now only a marginally smaller potential audience than broadcasting for anyone wanting to reach large audiences, especially sports. So broadcasters felt they had to charge their own retransmission fees to compete.

Retransmission consent is a band-aid for a system that, under current law, simply is not economically viable without it, one with the result that, unless there’s a massive cord-cutting movement (significantly bigger than what has thus far occurred) that restores a concrete audience advantage for broadcast, it disincentivizes broadcasters from encouraging people to watch their programming on what’s supposedly their primary distribution mechanism without paying a cable company. The whole economics of the television industry is so upside down that during the Aereo fight, the major broadcasters threatened to abandon their own nominal medium entirely if Aereo won in court and distribute popular programming only to cable subscribers. In other words, not only are they only still broadcasting as long as it’s not worth the PR hit to stop, they have no incentive to actually improve their signal or make it more useful by e.g. allowing smartphones to pluck their signal out of the air directly. Retransmission consent simply gives broadcasters a perverse incentive to abandon their own nominal medium while doing nothing to fix the broken system that makes it necessary to begin with – and to make matters worse, it’s allowed cable companies to put a good chunk of the blame for high cable bills on broadcasters. But so far, no one seems to have a better idea for how to save the village than by destroying it.

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