Aereo Oral Arguments Could Hint at Eventual High Court Decision, Attorneys Say

Aereo allows users to pay $8 to $12 a month to individually lease and remotely operate one of hundreds of tiny antennas and connected DVRs, which they can then use to view local broadcast content on their mobile devices or through a Web browser. The user tunes the antenna and records the content, while Aereo merely provides the equipment, said CEO Chet Kanojia in an interview on C-SPAN’s The Communicators set to air this weekend. That’s why, unlike pay-TV companies that show broadcast content, Aereo shouldn’t have to pay retransmission consent fees to broadcasters, he said. “Why would we pay retransmission fees? Does any other equipment manufacturer pay retrans fees?” he asked. Broadcasters disagree, arguing in their briefs filed in the case that Aereo is retransmitting their copyrighted content and that this constitutes a public performance.

Aereo has argued that a ruling against its service would strike down the precedent-setting Cablevision decision (CD April 4 p6), in which the 2nd U.S. Circuit Court of Appeals in New York ruled that customers using a remotely operated cloud DVR were making individual, private copies of copyrighted content. If the Supreme Court overturns that decision in deciding Aereo, it could threaten the entire cloud computing industry and any service involving cloud storage of copyrighted content, said Aereo, CTIA and several others in amicus briefs. The Department of Justice and others have argued that it’s possible for the court to rule against Aereo without striking down Cablevision (CD March 5 p9).

Though the questions asked by justices during oral arguments may reveal more about how the Aereo case will shake out, two outcomes -- both of which favor broadcasters -- seem more likely than others, said Cole and his Fletcher Heald colleague Kevin Goldberg. Neither Cole nor Goldberg is involved in the case, but their firm represents broadcast clients. Though broadcasters have lost in several lower courts, their case has seemed stronger in recent months, Goldberg said. In taking the case, the high court used the same language as broadcasters to describe the central question of the case: “Whether a company ‘publicly performs’ a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers over the Internet.” The broadcasters’ side was also bolstered by the DOJ amicus brief supporting their case, and the court’s liberal justices may be likely to side with DOJ, Goldberg said, while the conservative justices may not be inclined to disrupt the broadcast industry by ruling in Aereo’s favor.

Another possible outcome could be suggested by the timing of the Supreme Court granting cert in the case (CD Jan 13 p5), said Cole. Aereo and FilmOn are involved in multiple court cases throughout the country, all of which have been put on hold to await the high court’s decision, and the matter before the court is also from an ongoing case -- it’s specifically an appeal of a 2nd U.S. Circuit Court of Appeals decision rejecting broadcasters’ request for a preliminary injunction against Aereo. The case has yet to be tried on the merits, since the preliminary injunction battle hasn’t been resolved. It’s unusual for the Supreme Court to grant cert on cases that don’t have a complete record, Cole said. That could suggest that some of the justices thought the 2nd Circuit’s ruling on the preliminary injunction was wrong, which would be a victory for broadcasters, though it would leave the other issues in the case still open for the lower courts to decide. Another possibility for a narrow result might center around Aereo’s tiny antennas, Goldberg said. The court could rule that Aereo’s service is legal only as long as each user is assigned a permanent individual antenna, which might restrict Aereo’s business model or make it hard for others to repeat it, Goldberg said.

The justices’ comments may provide clues as to whether they view Aereo as a retransmission service similar to cable -- the broadcaster position -- or as a medium for allowing users to remotely view and record broadcast content -- Aereo’s position, said tech attorney Jonathan Band, who filed an amicus brief in the case on behalf of the Center for Technology & Democracy supporting neither party. Questions from the court are likely to include hypotheticals designed to make it clear whether the user or Aereo is the “volitional actor” viewing the content, Band said. Though several attorneys said the way such questions are asked can provide a clue to the court’s thinking, Wiltshire Grannis attorney and Supreme Court veteran Christopher Wright suggested the number of questions also matters. The justices tend to ask more questions of the party they disagree with, so receiving more questions from more justices than the other could be an indicator, he said. One factor on the eventual decision could be the number of justices because although Justice Samuel Alito had recused himself from all previous Supreme Court matters involving Aereo, he is now expected to hear the case, according to the Supreme Court website.

Kanojia has said that if Aereo wins, it will pursue faster expansion. If that happens, it may face competition from broadcasters, which have suggested they would make their own move to pay-TV if Aereo’s business model proves to be legal, Goldberg said. Whatever the outcome of the case, several industry observers said it was likely that a push for legislation would follow a Supreme Court decision in ABC v. Aereo. “Whoever loses will start lobbying,” said Goldberg. Kanojia said Aereo wasn’t currently pushing for legislation, but the company recently unveiled advocacy website Protectmyantenna.org. He expects broadcasters to pursue legislation because it generally follows litigation in “the playbook,” he said.