Aereo and the Future of Television

Television is about to change and its direction is up to the Supreme Court

When I heard about the Time Warner and Comcast merger, the first thing that came to mind was the Federal Trade Commission and antitrust laws. The merger would create a virtual monopoly on cable television and it got me thinking, “Do I need all of this anyway?” Currently, I’m paying approximately $150.00 a month for high definition cable channels, several stations including HBO, internet wi-fi service and a home telephone.

I also have Apple TV so I can watch Netflix and several other streaming sites. For the most part, I’m happy. Unfortunately, like a large buffet, there is no way I need most of it. I started thinking and doing a little research. What if I just keep the home phone and wi-fi for streaming the things that I watch?

Well, last month the Supreme Court heard arguments in a case called ABC v. Aereo.  The crux of the case is that American Broadcasting Service is suing a streaming service for copyright infringement. At first glance, it looks like a David and Goliath case where Aereo is a little guy being bullied by a huge television network. The decision may or may not be out when the Supreme Court recesses in June, but whatever the Robert’s Court decides, it will change things for all of us.

With Aereo, you can watch real, live TV through a tiny remote antenna you control over the Internet. From the consumer’s perspective, the Supreme Court’s decision could affect not only Aereo customers, but traditional antenna users as well. Here’s where it gets complicated.

First of all, copyright laws have not kept up with the rapid progress of technology and we all realize that most of the people in Washington, D.C., including the Supreme Court Justices, don’t really understand technology in the first place. The argument from Aereo goes something like this, according to the New York Times: “If it’s legal to set up an antenna and record a TV show at your own house, which it is, shouldn’t it also be legal to rent an antenna and server space at a big data center, and then stream the show over the Internet to your computer, tablet or set-top box?”

However, the broadcasters say that this sounds like Aereo is re-transmitting their signals without paying them the requisite fees — in other words, broadcasters claim Aereo is illegally operating as a cable provider in violation of the 1992 Cable Act. “Aereo’s business model is essentially grabbing those signals from over the air, bundling them together, and then selling them for a profit. Well, then the entire model and the entire premise of copyright law is going to be disrupted,” Neal Katyla, the former acting solicitor general of the United States and legal adviser to the broadcasters, said on PBS Newshour. “Everyone else who wants to grab content has to pay for it.”

A ruling against Aereo could upend the cloud storage industry, something no one wants to see happen. “Aereo is exploiting a seam in copyright law that implicates fair use, performance rights, and how these rules apply to cloud computing,” The justices seem to be struggling to find a way to slap Aereo down without damaging the legal framework that today protects cloud companies like Dropbox from the copyright infringement laws.

If the decision comes down on the side of Aereo, then the broadcasters could revolt. “It’s possible that networks may decide to move their popular programming over to a paid service if the Supreme Court should rule in Aereo’s favor,” said Grant Whipple, Consumer Electronics Product Manager for Winegard Company, an antenna manufacturer not affiliated with Aereo.

There’s no question that antennas provide a vital service for cord-cutters and other non-cable customers. Aereo claims that it provides a similar service, renting a customer a tiny antenna at one of its remote facilities. An Aereo customer also gains the ability to record these shows and store them in the cloud. Aereo wants everyone to know that each customer gets their own little antenna; that model purportedly differentiates them from a cable company.

Unfortunately, the model may not be technically accurate. “The problem here is that a single miniature antenna … can’t (due to very well understood physics) receive VHF and UHF television signals,” explained the Huffington Post. “The technology does not appear to be a passive television antenna in a remote location. It appears to be an array of antennas and a system for multiplexing transmission, which closely resembles an MVPD or, in other words, a cable operator.”

An Aereo win could shake up the broadcasting industry in a good way. If Aereo wins, and then scares broadcasters into streaming their content directly to users, either for free or for a lower price than Aereo charges, that is good for consumers.

The worrying aspect of this case is that it could go so many ways. A divided court could lead to a less consumer-friendly verdict with a muddier interpretation of copyright law. Whether or not Aereo wins, it’s really the television consumer’s fate that’s on trial.  The Solicitor General filed a brief with the court in March stating that Aereo should be required to pay retransmission fees like a cable company. However, the brief also said the court’s decision “should not call into question the legitimacy of businesses that use the Internet to provide new ways for consumers to store, hear, and view their own lawfully acquired copies of copyrighted works.”

Do I want an Aereo win, even if it could mean the death of free over-the-air TV? Or do I side with the broadcasters, and hope that cloud tech doesn’t get taken down with Aereo? I’d like to see something in the middle. Perhaps siding with the broadcasters while leaving cloud-based technology intact.