Bridge Span 14-5: Living in an Aereo World

by Stevan Mitchell

On April 22, the Supreme Court will confront two sub-optimal scenarios when it hears ABC Inc. v Aereo – a case with potentially resounding impact on the relationship between broadcast television and the Internet.  Affirming the appeals court decision would unjustly reward cynical lawyering and technological inefficiency, and potentially lead to reductions in premium “over the air” content.  But by taking the other path, the Court could solidify pivotal distinctions in Internet law based on increasingly inapt analogies, enshrining rigidity that could lead to greater uncertainty amidst technological advancements.

Rewarding inefficiency

Aereo is an online service that retransmits freely-available local broadcast signals via the Internet to subscribers in their local broadcast areas without paying retransmission fees that would be paid by cable or satellite providers.  Aereo does this by exploiting an apparent loophole, created in the Second Circuit’s 2008 Cablevision decision, which sets out conditions under which customers can initiate privately streamed transmissions without implicating performance rights.

Aereo rents each of its subscribers a separate, dime-sized television antenna.  Thousands of these devices are housed on boards inside local Aereo antenna farms.  Aereo also rents to subscribers a discrete portion of its storage media to serve as personal networked DVRs, storing programs recorded through these antenna for immediate viewing or viewing at a later date.Aereo boasts that even if hundreds of thousands of subscribers chose to view the same program at the same time, they would never share an antenna, a data stream, or a recorded file.  By holding staunchly to design features suggested by the Cablevision ruling, and enabling subscribers to view and record only in their local broadcast areas, the company has avoided paying retransmission fees to broadcasters.  It claims to merely be facilitating connections that consumers would be able to receive but for the absence of a television receiver.

The technological infrastructure that has been constructed by Aereo lawyers and engineers to exploit a potential legal loophole has been identified by courts and commentators as a modern Rube Goldberg creation.  The design has been called “ridiculously inefficient and monstrously unscalable” even by those who might prefer to see copyright law operate differently in this space.[1]  At a time when competitors are negotiating arrangements to reduce redundancy, inefficiency, system drag and unnecessary bandwidth usage through novel engineering solutions, Aereo has built its business on design inefficiencies to exploit a legal loophole.

Aereo is also subscribing to the ultimate “tech mandate.”  It is ironic that as a nominal representative of a tech industry quick to cry foul over regulatory requirements that dictate engineering design, the company would so wholly embrace particular design specifications mandated by litigators given the opportunity to score a freebie.

The design is the equivalent of having thousands of people using thousands of toothbrushes to swab the deck of a ship.  But while is ship is better off for having received the cleaning, that is not so clearly the case with respect to the TV broadcast environment, which, if Aereo is affirmed, could quickly degrade to reduce the availability of free over-the-air content to a larger consuming public.  (Fox and CBS have said they could abandon their free-over-the-air broadcast signals and become cable networks if Aereo’s business model is approved.)  Instead of being merely amused by its inefficiencies, we should be legitimately concerned about Aereo cannibalizing the very content that makes its services available.

Enshrining inapt analogies

While Aereo’s design features survived scrutiny by the Second Circuit, a Federal District Court in Utah, finding likely copyright violations, enjoined Aereo’s operations in Utah and Colorado and placed other actions on hold pending further guidance from the Supreme Court.With a clear gulf forming over Aereo’s legality, perhaps the Court can do what it needs to resolve the immediate skirmish by distinguishing Cablevision instead of reaffirming and further extending its unpredictable implications.

But there are unlikely to be clear winners here.We are seeing several critical analogies that lawmakers have relied on to guide statutory construction increasingly being strained by technological advances in communications technologies.Construing statutory language in ways that predictably align with the policies we might agree are beneficial is becoming increasingly prone to varied results.  That Aereocould be a close call shows this to be true.

Among the analogies that are increasingly strained, and with potential to foment continuing uncertainty and litigation, are those prompting bright-line distinctions in law between public and private performances and transmissions (as well as distinctions now enshrined between streams and downloads – but that’s a topic for another day). Cablevision’s private streams are one inapt analogy, as packet-switched communications are not private, they’re ubiquitous, but only most readily decoded by the intended recipient.

In Aereo, weighty consequences attach to the interpretation of the  performance analogy and the transmission analogy, which at their core are only metaphors for the wash of packets traversing wires and air.  But how should we go about discerning individual performances or even discrete transmissions in an “always on” environment, in which millions of devices are capturing and (for want of a better term) transmitting in near-real time billions of artifacts from human interactions?  And are we well-served by perpetuating a “transmission” analogy under conditions where bit flows more resemble dialogues?

One result could be a challenge from the Court for the legislature to reexamine the aptness of the public performance analogy to Internet transmissions, informed by the realm of the possible in the Internet Age.  Recognizing the stakes, it is likely that the Court will proceed gingerly here.  But with leading institutional authorities each having pledged to undertake copyright review at varying depths, a worthy undertaking might be a deep analysis, informed by technologists, over the aptness of analogies that for years have guided lawmakers’ efforts.

There is no question that an appropriate balance must be struck to preserve incentives for creators.  The easier it becomes to replicate, transmit, record and re-experience a work the more this proposition holds true.  Our overarching policy preferences may be best served, and the right balances most cleanly and predictably struck, however, by analogies that more closely resemble today’s bit stream communications and how they are used.  The alternative is to continue to retrofit and stretch yesterday’s physical world analogies.

Stevan Mitchell is a policy counsel, government relations strategist and advocate, working to advance policies beneficial to technology and content interests in areas including intellectual property and online market access.  He can be reached at Stevan@Globalviewstrategies.com.