Supreme Court justices cautious about broadcasters' bid to shut Aereo

By David G. Savage

WASHINGTON — The Supreme Court justices sounded uncertain and conflicted Tuesday in trying to decide whether a TV streaming service that allows users to receive their favorite programs through tiny, rented antennas violates the broadcasters' copyrights.

The case of ABC vs. Aereo has the potential to reshape the broadcast and cable industries if the Brooklyn-based upstart prevails in the high court. And that appeared possible after Tuesday’s argument.

An attorney for the broadcasting industry urged the court to shut down Aereo. It allows “tens of thousands of paying strangers” to watch the programs they wish, but without paying any copyright fees to broadcasters. If Aereo prevails, some experts think the cable and satellite companies may decide to stream their own signals in the same way Aereo does and refuse to pay licensing fees to the broadcasters.

Before Tuesday’s argument, most legal experts were convinced the justices would rule against Aereo's service as a violation of copyright laws. But that certainty faded during the hour-long argument. Several justices admitted they were struggling for the right answer.

The broadcast industry relies heavily on a provision in the copyright law that a television broadcast may not be aired “publicly” without the permission of the broadcaster. Cable and satellite companies pay fees to broadcast networks to transmit those signals to their subscribers, but Aereo does not.

The competing lawyers argued over whether a customer of Aereo’s service is receiving a “public” performance of a copyrighted broadcast or instead is watching a private show at home.

The attorney for Aereo said its service was like the videocassette recorders that became popular in the 1980s, which allowed homeowners to make copies of programs to be viewed at home.

Aereo “could rent DVRs in Brooklyn, and it would be the same situation,” said Washington attorney David Frederick. He added that Aereo’s tiny antennas “pick up over-the-air signals that are free to the public.”

But former Solicitor General Paul Clement, representing ABC and other broadcasters, said Aereo had devised “a gimmick” to make money by sending TV signals to thousands of paying customers. This large-scale streaming is clearly a “public performance,” he said, not a private one at home.

Justice Department attorney Malcolm Stewart said the government agreed with the broadcasters that Aereo was violating copyright laws by transmitting broadcast signals without a license.

Twice during the argument, Chief Justice John G. Roberts Jr. said Aereo had designed its system to “circumvent” the restrictions in the copyright law. But that did not necessarily mean it was illegal, he added.

The justices are expected to reach a decision by late June.

http://www.latimes.com/business/money/la-fi-mo-supreme-court-aereo-20140422,0,879667.story#ixzz2zjvchgHI