Supreme Court Justices Criticize Aereo, But Worry About Overbroad Ruling

Supreme Court Justices Criticize Aereo, But Worry About Overbroad Ruling

Judges don't want decision to overreach into cloud

Several of the Supreme Court justices who heard arguments in the broadcast networks’ case against the online TV site Aereo criticized the company's business model but worried about passing down a ruling that could affect other technology.

Broadcasters contend that Aereo — a New York based company with less than a million subscribers — is stealing their signals. The company uses millions of small antenna to relay broadcast signals to subscribers’ laptops, tablets and other devices, collecting a small fee.

Also read: Why Aereo's Supreme Court Case Matters

While the justices expressed skepticism that Aereo's technology violates copyrights, they also questioned whether the company was trying to take advantage of legal loopholes.

“If your model is correct, can't you just put your antenna up and then do it? I mean, there's no technological reason for you to have 10,000 dime-sized antenna, other than to get around the copyright laws,” said Chief Justice John Roberts.

Chief Justice John Roberts questioned why Aereo used the antennas, if not to skirt copyright laws. Justice Ruth Bader Ginsburg noted that Aereo pays networks nothing to pass their signals on to consumers.

Also read: Aereo CEO ‘Hoping for a Clear Decision’ From Supreme Court

But the justices worried that any decision could have a much larger reach than intended, affecting consumers’ ability to remotely store content like TV shows and songs. (Apple's iCloud is one of the best-known cloud computing services.)

It's always difficult to say if justices’ questions indicate which way they're leaning, because they often play devil's advocate while looking for holes in litigants’ arguments.

Also read: Barry Diller: Aereo ‘Finished’ If It Loses Supreme Court Case (Video)

“I have to understand the effect it will have on other technologies,” said Roberts, who repeatedly questioned how the court could write an opinion that would affect only Aereo, and not companies like Apple.

“I don't know how to get out of it,” added Justice Stephen Breyer.

Justices Elena Kagan and Sonia Sotomayor also expressed concerns about the impact on the cloud. They asked more questions of the networks’ attorney, Paul D. Clement, than they did of Aereo's attorney, David C. Frederick.

“They've thrown up a series of problems this would create for the cloud,” Breyer told Clement, referring to Aereo's legal team.

Kagan questioned the difference between using an antenna or DVR in a home, versus placing those devices elsewhere. That got to the heart of Aereo's contention that it is merely expanding on existing technology like antennas, DVR, and VCRs.

Networks contend that Aereo is more like a cable or satellite company than a lone viewer, watching free TV with an antenna and recording it with a VCR. Cable and satellite companies spend billions in retransmission fees to air broadcasters’ shows, and pass those costs on to their subscribers.

Aereo, meanwhile, charges subscribers $8 to $12 a month — and pays nothing to the broadcasters.

Several past precedents will came into play Tuesday: In 1984, the high court ruled 5-4 that the sale of Betamax machines did not constitute contributory copyright infringement.

In the 2008 Cablevision decision, the U.S. Court of Appeals for the Second Circuit found that DVR recordings don't infringe on copyright holders’ protections against their works being publicly performed without compensation. (Bars, for example, are supposed to pay to air a show.)

The court ruled that watching shows on DVR is not a public performance because the person who makes the recording is also the one who watches it. The right of individual customers to play their own songs and shows has become a cornerstone of cloud computing.