The Aereo Case Isn't About Aereo, But About The Future Of Cloud Computing And Innovation

Legal Issues

from the there's-much-more-at-stake-here dept

We’ve been writing quite a bit about the Aereo case lately, which is scheduled to be heard by the Supreme Court in late April. The case has an awful lot of powerful people and organizations lining up on both sides, filing briefs with the Supreme Court. Some have pointed out that Aereo’s technology really isn’t particularly innovative, and in fact, we’ve discussed how its setup is basically insane from a technology standpoint, but that the company is forced into building it that way to stay within the law (or so it and its supporters believe).

But some seem to be wondering why this one technology company, with something of a legal kludge is so important. It is incredibly important for reasons that have almost nothing to do with Aereo’s actual service. Rather, it’s about how the Supreme Court will interpret a key part of the Copyright Act, which could have an astoundingly bad chilling effect on pretty much all cloud computing. This may not seem obvious at first glance, since few people associate Aereo with cloud computing. Matt Schruers does a nice job breaking down the key point, however, as to why this one decision will have far reaching implications well beyond Aereo. And it all comes down to how the Supreme Court defines what is a “public performance.”

Aereo’s position is that when Aereo subscribers pay for access to an antenna and direct it to send them back a unique copy of a particular broadcast, this is private. Different users access different antennae at different times, and each user receives a different copy of a work — even if they’re watching the same broadcast. Aereo isn’t rebroadcasting one work to thousands; it gives technology to thousands who at different times use that technology to access and possibly store different copies of works that they’re already lawfully entitled to receive. This is not unlike the Sony Betamax, which didn’t copy television, but gave thousands of consumers the technology to make reproductions of television content that they were already lawfully receiving.

Broadcasters have responded by saying that none of this matters; Aereo is infringing, they contend, so long as a given work is made available to multiple members of the public, even if Aereo does it with different unique copies, and at different times.

The problem with this rationale is that it applies with equal force to cloud storage like Dropbox, SkyDrive, iCloud, and Google Drive. If multiple people store their own, unique, lawfully acquired copy of the latest hit single in the cloud, and then play it to themselves over the Internet, that too sounds like the broadcasters’ version of a public performance. The anti-Aereo rationale doesn’t distinguish between Aereo and the cloud.

If you don’t think that copyright holders won’t take a victory here and go after various cloud services, you haven’t been paying attention to the history of copyright fights over the past few decades.

And this is part of why the US Solicitor General’s brief in support of the broadcasters is so ridiculously problematic. It tries to address that issue of cloud computing, by basically saying it might not be a big deal, because no company will require a license. However, other briefs in support of the broadcasters say it’s no big deal because everyone can just get a license. One of those can’t be true.

the U.S. Government (USG), for example, carefully hedges, saying that a decision for the broadcasters “need not threaten cloud computing.” It conspicuously does not argue that it will not threaten the cloud — only that the decision need not, implicitly conceding that a decision for the broadcasters could still be fatal for the cloud. The USG’s rationale is that as long as a consumer has lawfully acquired media in the first place, no cloud service need worry that someone will demand a license. Inconveniently for the USG, however, several other briefs filed concurrently argue that cloud computing services need not worry because, hey, everyone can just get a license! Setting aside the fact that there’s no way to ensure that all files in the cloud are licensed, this point substantially undercuts the USG’s position. Even as the USG is telling the Court that cloud services need not fear they’ll be demanded to take licenses for everything users put in the cloud, other interests are telling the Court that cloud services should do exactly that. Arguably, it doesn’t advance the broadcasters’ case that even their supporters cannot agree on whether cloud services would have licensing problems.

The ruling in this case matters, even if you don’t care at all for Aereo’s particular service. The wider impact on a variety of useful services could be massive. In fact, we’ve seen this before. Aereo’s court wins to date rely heavily on the ruling that found Cablevision’s remote DVR legal — which similarly focused on defining whether or not that product involved a “public performance” that needed to be licensed. There, the court found that they did not. However, courts in other countries have found otherwise. That set up a nice natural experiment, and Harvard professor Josh Lerner looked at changes in venture capital investment into cloud computing offerings in the immediate aftermath of similar rulings, finding that the Cablevision ruling (saying not a public performance, and thus protecting the cloud) helped to spur tremendous investment in innovative new services — to the tune of about $1 billion.

No matter what you think of Aereo, this decision will have a major impact on what sort of internet we have going forward.

Filed Under: broadcast, cloud computing, copyright, supreme court
Companies: aereo