After months of anticipation, and numerous cases won and lost by the antenna farm startups Aereo and streaming TV network FilmOn across the country, arguments were finally heard by the Supreme Court in American Broadcasting Companies vs. Aereo today.
The mood was heightened as crowds lined up to attend the hearings in Washington D.C. and the technology, copyright, and television desks of major newspapers got together and struggled to explain the facts in a simple way for their readers. This may go down as one of the wonkiest days Twitter has ever seen.
The question is over the future of television and whether the old model of super power broadcasters can be expected to sustain itself in the digital age. It is also a referendum on whether government will support innovators such as the companies Aereo and FilmOn Networks that developed the technology that enables consumers to capture over the air broadcast signals that are rightfully theirs to watch when and where they want them, or side with the incumbents determined to cling to the past and ignore customers’ needs.
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“Your technological model,” Chief Justice John G. Roberts Jr. dourly told Aereo’s lawyer, David C. Frederick, “is based solely on circumventing legal prohibitions that you don’t want to comply with.”
Aereo, and the similar portion of FilmOn’s service, enable users to capture free, over-the-air TV signals by renting an individual remote antenna that is housed among thousands of small remote antennas in warehouses. The signal is then transmitted to customers online and via mobile devices without paying broadcasters the retransmission fees cable companies pay them to provide their channels to cable customers. Aereo charges consumers a fee for this content. FilmOn, reasoning that if it was free to the consumer by law in the first place, it should continue to be free, does not charge the consumer a fee.
The practice is popular and in tune with the overall trend of younger consumers to become “Cord-cutters.” As often as not described as “Cord-nevers” because they have been getting TV online all their lives, these are consumers who are sick of high cable bills and want the freedom to watch their shows on the devices of their choice, whenever they want to.
Alki David, the CEO of FilmOn has explained that the technology involving the antenna farms could easily be replicated at home by anyone with products available at a Radio Shack. But the convenience and cost is much lower with his system. The reason it is kosher is simple: the law provides for private performance via the antennas in the same way it allows a consumer to replay a show via DVR.
FilmOn’s lawyer Ryan Baker (pictured above) of Baker Marquart attended the hearings
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ABC was backed by CBS, NBC, FOX, and the U.S. Justice Department in it’s arguments, saying it is no different than what a cable company does.
The Supreme Court justices were fairly opaque to observers. A decision is not expected until summer.
Frederick stated that the company does not “perform” anything; it is nothing more than an “equipment provider.” ABC’s lawyer, Paul D. Clement, rejected this notion. Of course Aereo is “performing,” he said; suggesting otherwise “is just crazy.” Clement argued that Aereo is attempting to “get something for nothing. … It’s like magic.”
The justices repeatedly brought up the implications this decision will have for cloud computing as a whole. Could a ruling in favor of the networks mean that any time a consumer uses a file that has been uploaded into DropBox or iCloud say, that the future use is, as Justice Elena Kagan asked, “public performance?”
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Clement tried to push back on the notion that this case was a referendum on cloud computing and urged the judges to find what he characterized as a common sense interpretation of copyright law.
Frederick was stirring up these larger fears. “If you turn every playback into a ‘public performance,’” he said, that will have “huge implications” for cloud-based businesses.
“The court’s decision today will have significant consequences for cloud computing,” Frederick said in a statement following oral arguments. “We’re confident, cautiously optimistic, based on the way the hearing went today that the Court understood that a person watching over-the-air broadcast television in his or her home is engaging in a private performance and not a public performance that would implicate the Copyright Act.”
What will happen if the Court sides with Aereo? Aereo will continue to operate in its 11 cities charging users monthly fees for a dozen or so channels. FilmOn will immediately be able to launch in 18 cities it has laid the ground work for with the flip of a switch. (TV Mix is owned by FilmOn Networks).
Cable providers may balk at the exorbitant retransmission fees the networks demand. Giants such as Comcast may call their bluffs. As could DirectTV, which the New York Post reported tried to acquire FilmOn in expectation of an Aereo win.
“They made an offer to buy us, and we declined,” David told The Post.
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