Justices test Aereo on copyright issue but raise concerns about harming cloud services

The Supreme Court will decide the fate of Aereo, an Internet start-up that's frightening the TV industry with an old-school technology: the antenna. Technology reporter Cecilia Kang and Supreme Court reporter Robert Barnes explain what you need to know about the technology and legal implications behind Aereo. (Davin Coburn and Kate M. Tobey/The Washington Post)

Several Supreme Court justices expressed skepticism about Internet streaming start-up Aereo during oral arguments on Tuesday, saying that it looked like the company was created to act as a technical workaround to bypass copyright laws.

But some justices also raised concerns that a decision siding with television broadcasters in the case could have far-reaching effects on new Internet cloud and other technologies, which would then be swept up in other questions about the reach of copyright laws.

“Your technology model is based solely on circumventing legal prohibitions,” said Chief Justice John G. Roberts said to Aereo’s attorney. He and other justices asked if there was any particular reason why the company uses thousands of individually assigned antennas except to avoid copyright fees owed to broadcast networks such as ABC, NBC and CBS.

“It looks as if somehow you are escaping a constraint” other companies are held to under copyright law, Justice Stephen Breyer said.

But he and others also questioned the extent of broadcasters’ interpretation of copyright law. They fear other cloud-based technologies like DropBox could open themselves up to liability for storing copyright content.

Breyer said he was concerned about what a decision “will do for other technologies.”

Aereo argued that its thousands of antennas are essentially rented to subscribers of its $8 a month service for users to pull programs from the public airwaves legally and then store in Internet server files to watch at their convenience. In that way, it is just a mediator, the company argued, with consumers in control of how they use the company’s antennas and storage files for pulling and recording programs from the airwaves.

Much of the arguments, which lasted over an hour, were focused on the justice’s queries about the definition of public and private performances in copyright law and how Aereo differs from cable, satellite and other Internet video firms that pay broadcasters retransmission and other license fees.

Justice Ruth Bader Ginsburg noted that one lower court judge’s dissenting opinion stressed that Aereo appeared to be a technology entirely conceived as a legal workaround.

“You are the only player so far that doesn’t play royalty,” Ginsburg said.

An attorney for the broadcasters grabbed onto the skepticism. “If only a gimmick...they will probably go out of business and no one will shed a tear,” Paul Clement said.

The closely watched case is significant in its potential to reshape business negotiations between broadcast and cable companies. Cable firms would like to follow Aereo’s model and avoid retransmission fees, which are expected to reach $3 billion this year.

If that happens, the cable bill model of bundles of channels forced on consumers could be upended as broadcast and cable networks move more of their programs online.

Follow The Post’s new tech blog, The Switch, where technology and policy connect.

Cecilia Kang is a national technology reporter, writing about tech and Internet policies at the Federal Communications Commission and Federal Trade Commission and how regulations affect businesses and consumers.
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