Aereo’s final Supreme Court plea: Cloud computing could be ruined


On first reading, it sounds like a stretch. For many legal scholars, it continues sounding like a stretch after the twelfth reading. But given the historically unique confluence of circumstances leading up to next month’s round of oral arguments before the U.S. Supreme Court in the case of ABC v. Aereo, it’s impossible to rule it out entirely: Aereo’s argument is that, if the distribution of programming from its cloud-based servers to its subscribers’ devices counts as a “performance”–and thus a potential copyright violation–then any distribution of media from a cloud server to those same devices should also count as “performances.”

Aereo is the innovative service, backed by former TV network chief Barry Diller, that uses arrays of patented micro-antennas to capture over-the-air TV signals, and then delivers those signals through cloud servers to Internet-based clients. It’s a subscription service that can deliver (almost) live television to viewers in locales where VHF antennas and coaxial cables can’t reach. But it’s undeniably redistributing network programming–something which networks’ parent companies usually charge for. Aereo doesn’t pay redistribution fees, arguing that it’s merely acting as an antenna-for-hire.

But what does Aereo have to do with the cloud? Like many other services, Aereo uses public clouds to store programs it records from its antennas. In a conspicuous effort to comply with certain laws, even if it flies in the face of others, Aereo literally provides each customer with her own tiny, little, private antenna and her own cloud storage for both live and DVR recording. It’s unlike any other service in the world with respect to its antennas, but it’s like every other cloud service in that it’s all delivered personally.

And that matters, because the “Transmit Clause” of U.S. copyright law that broadcasters claim Aereo violates, defines a transmission program as something designed for delivery “to the public.” Citing from Aereo’s final petition to the Supreme Court before it hears oral arguments next month:

“Petitioners’ [the broadcasters’] argument that the relevant “performance” for purposes of the Transmit Clause is the original broadcast, rather than the consumer’s performance from her personal copy, would pervasively threaten the use of cloud technologies to store and access copyrighted content. On petitioners’ view, whenever two users of a cloud-based “virtual locker” service–such as Google Drive–separately play a song stored on the provider’s servers, the provider is publicly performing by transmitting the same “underlying” performance to multiple members of the public…Were petitioners’ argument accepted, it would gravely threaten cloud computing. Petitioners, however, hardly acknowledge, much less address, this concern.”

Supporting Aereo’s position is not only the Appeals Court’s existing decision in its favor–which broadcasters are appealing–but the landmark 2008 Second Court of Appeals decision in Cartoon Network v. Cablevision, which the Supreme Court let stand. That decision overturned a lower court, determining that when what we would today call a “cloud-based service” makes a very temporary copy of a program in the act of delivering it to a single customer, that service is not violating copyright.

That decision permanently affirmed the legality of remote DVRs, and enabled an industry where cloud servers could deliver programming to Internet customers like software.

Because of the tenuous state of legal precedent on the subject of transmission over the Internet, whatever the Supreme Court decides will change the state of affairs for both cloud computing and broadcasting–the status quo will not survive. If the High Court affirms the decision in favor of Aereo, precedent could be set for Google, Amazon and any other cloud service to deliver any media, including published books, for individual customers without triggering the Transmit Clause, and without violating copyright. Fair use could expand dramatically. The rights of services such as Google Books to republish existing material under copyright could be sustained.

And in a threat reiterated by CBS Corp. CEO Les Moonves earlier this month, CBS may lead broadcast networks in a mass exodus from the public airwaves.

If the Supreme Court rules in favor of broadcasters–whose case is supported by the Government–then rights holders may be given new incentives to pursue infringement cases against cloud service providers and ISPs that may play a role, willingly or not, in the transmission of performances to any system. That system, in such a ruling, would count as “the public.”  Remote DVR services provided by non-cable services such as Dish Network, may once again be rendered illegal. Performance royalty rates for Internet radio services such as Pandora, Spotify and could be renegotiated (again), with the intent of raising them (again). The economic viability of any broadband service whose media could be construed as a “performance,” could be put under the microscope.

For more:
– see the Transmit Clause on
– see the Betanews story on the 2008 Second Court of Appeals decision
– read the story on CBS Corp. CEO’s comments
– read the 24/7 Wall St. article on the Obama Administration’s opinion on the matter
– read The New York Times article

By Jarrett Neil Ridlinghafer 
CTO of the following –
Synapse Synergy Group
Chief Technology Analyst, Author & Consultant
Compass Solutions, LLC
Hadoop Magazine
Cloud Consulting International