SCOTUS chills innovation with Aereo ruling

  • Updated: June 29, 2014 - 6:00 PM

Congress enacted key provision of copyright law in 1976, when it couldn’t predict digital future.


SCOTUS wrongly takes aim at tech

In siding with broadcasters against Aereo, a pay-TV service that lets subscribers watch local stations through the Internet, the Supreme Court resorted to a simple principle: If it looks like a duck and walks like a duck, the law should treat it as a duck, no matter what kind of creature it is. But in doing so, the court threw a legal shadow over a slew of other tech-driven companies.

The case centered on a provision of copyright law that Congress enacted in 1976 mainly to require cable TV operators to pay over-the-air broadcasters for the right to retransmit their programs. The provision requires anyone who retransmits copyrighted works to the public to obtain the copyright holder’s permission and, potentially, pay a fee. Aereo didn’t obtain the broadcasters’ consent, nor does it pay them for their programming.

But Aereo argues that it doesn’t have to because it’s not offering cable TV — it’s providing a service that lets people do remotely what they could otherwise do with a few devices in their homes. It rents out the antennas, digital video recorders and computer servers necessary for people to tune in a free local broadcast and watch it on an Internet-connected tablet or other gadget, or store it for later streaming. This sort of cloud-based service became possible only with the proliferation of broadband.

Writing for the court’s majority, Justice Stephen G. Breyer pooh-poohed the technological distinctions between Aereo and cable TV. But as dissenting Justice Antonin Scalia observed, the majority glossed over a crucial detail: Aereo may be providing the equipment, but its customers are the ones transmitting the programs. By shifting responsibility for those transmissions to Aereo because it “looks like cable,” Scalia wrote, the court threw into doubt a long-settled principle that technology providers don’t violate copyrights just by enabling others to do so.

By trying to close a legal loophole that technology enabled Aereo to exploit, the court blurred the boundaries around copyrights in a way that will chill investment and innovation. It would have been far better if the court had let Congress respond to a technological change it couldn’t have foreseen 38 years ago.


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