The Three Pictures of Aereo

As many who follow such things know, ABC v. Aereo was argued today before the Supreme Court. My writeup on it last year provides some background about the case and my views at the time (which have changed a bit since I have more closely studied the technology, the case law, and the statute). In this post, I want to discuss the three pictures of Aereo – the big picture, the little picture, and the side picture.

The Big Picture

The basic gist of this case is this: Aereo grabs programming off the airwaves – programming that anyone with an antenna in their home can grab. Aereo then sends this content to servers – sort of remote DVRs. From those servers, the content is then sent to users over the internet. (There is some transcoding and compressing that occurs, but most are ignoring this feature).

It turns out that a court passed judgment on a similar system a few years ago in the Cablevision case. There, the court held that a remote DVR was not a public performance even though it transmitted shows from the remote DVR to subscribers. The basis for the ruling was eminently reasonable: the user decides what to record, what to watch, when to watch, and such decisions are separate from other users. As such, the transmission from the DVR to the user is a private performance, no different than if the DVR were in the user’s own home attached to the television.

There is one primary difference between Cablevision and Aereo. Cablevision grabs the signals off the air with one (or a few) big antennas. Aereo grabs the signals off the air with thousands of tiny, dime-size antennas. Aereo assigns one to each user for each channel watched or recorded. This difference becomes important, but only in the little picture.

Indeed, this difference was irrelevant to the circuit court that ruled in favor of Aereo. That court said Aereo is no different from Cablevision, and as a result, the performance is private.

And there lies the angst. At oral argument today, several justices struggled with what might happen if the circuit court is reversed. Will all cloud computing be at risk because it is considered public? That’s a scary thought, and what I call the big picture of Aereo.

I think the big picture is mostly a sideshow. Justice Kagan asked the best, most pointed questions about whether a storage locker might be publicly performing if people upload their own content and then share it with others. The answer, of course, is that it depends on how widely and with whom the content is shared (and whether it is shared for viewing or downloading, since only viewing would be a performance). After all, YouTube is simply a storage locker with worldwide shared viewing – and no one doubts that YouTube publicly performs.

So, then why is the big picture a sideshow? Because the Court is actively thinking about it, and will work hard to find a way to rule without harming cloud services.

This leads to the little picture.

The Little Picture

It turns out that all of the hand-wringing about the cloud is caused by the Second Circuit’s fixation on the wrong part of the transmission chain.

Aereo system

Aereo system

Consider the system above. All of the concern appears to be from the cloud DVR to the viewing device. But, as Cablevision makes clear, it doesn’t make a difference where the DVR is. You can put it in the user’s home, or push it back the pipeline to the provider, and the result should be the same. Indeed, the same is true for Aereo, and for Dropbox, and iCloud, and so on. So long as there is one to one correspondence and control between the DVR storage and the viewer, the performance is private. This is why YouTube, Roku, and shared lockers might be public performances – not due to the location, but due to the connections between users and the storage.

If the DVR is private, then, what should we be looking at? The other part of the system above: the re-transmission (a “secondary transmission” in the words of 17 USC 111) from the antenna to the DVR. And it doesn’t matter how long or short that cable is – whether the transmission is from the antenna to the DVR at the user’s home or to the DVR at the provider’s facility, the result is the same. The transmission is to many DVRs, not from one DVR to one user.

This is where, unlike the treatment by the Second Circuit, the individual antennas become relevant. Aereo claims that because the user controls a unique dime-size antenna, that re-transmission is also private – it is still one to one. For that reason, Aereo argues, it is not publicly performing, where Cablevision is (though Cablevision pays a licensing fee).

And that question, I submit, is little picture. It is a small, non-earthshattering, non-economy-harming statutory interpretation issue: do multiple antennas constitute a secondary transmission/public performance or not? I think so, based on my reading of the statute. Section 111 makes very clear that “secondary transmissions” are considered public, and the definition of such transmissions is not limited to a single antenna: the signal is being grabbed and sent to many users by Aereo, not by the users themselves with user equipement.  Aereo claims that its antennas are like a user running an antenna at home-essentially a rental- the antennas are not really leased. They are reused by others when not in use (unlike stored shows on the DVR), they are maintained by Aereo, they only feed Aereo equipment, and they are controlled by Aereo at the behest of an IP packet received over the internet (rather than a user owned device that actually tunes to a frequency). Of course, others (and the Court) might disagree with me, but the ruling will not bring down the cloud.

Side Picture

This brings us to the side picture, which many academics and media outlets have discussed, but has generally been left out of judicial discussion: the business of broadcasting is changing, and this case is one of many to come that will test broadcasters, service providers, and consumers in how television entertainment will be delivered. Aereo is a piece of a puzzle that allows people to enjoy live shows while streaming serial shows on services like Netflix and Amazon Instant Video. The sum total of those services cost less than cable due to unbundling.

But even if Aereo wins, then broadcasters might change their behavior to avoid the harms of Aereo. They might stop broadcasting, they might move more live television to cable (like ESPN and NFL Network showing more pro football), they might offer competitive services, or they might offer free streaming to cable customers (some already do). Thus, earlier today, I boldly argued that this case would not be a big deal – that the parties would adapt to any ruling or lobby Congress.

Here’s what I said in my blog post last year:

I’m not sure the Aereo ruling [allowing Aereo] is the right one in the long run.  One of the thorny issues with broadcast television is range. Broadcasters in different markets are not supposed to overlap. Ordinarily, this is no issue because radio waves only travel so far.  When a provider sends the broadcast by other means, however, overlap is possible, and the provider keeps the overlap from happening. DirecTV, for example, only allows a broadcast package based on location.

Aereo is not so limited, however. Presumably, one can record broadcast shows from every market. Why should this matter? Imagine the Aereo “Sunday Ticket” package, whereby Aereo records local NFL games from every market and allows subscribers to stream them. Presumably this is completely legal, but something seems off about it. While Aereo’s operation seems fine for a single market, this use is a bit thornier. I’m reasonably certain that Congress will close that loophole if any service actually tries it.

My thinking is still the same today. Indeed, one of the justices asked whether Aereo could just abandon geographic restrictions if it wins. Counsel had no real answer to that question.

The problem is that Aereo is caught between a rock and a hard place. As Bruce argues, Aereo should be considered a cable system and should pay the compulsory license fee (which is relatively inexpensive – cable companies offer basic OTA channels for $12 or so a month). But prior precedent has held that internet distribution cannot be considered a cable company eligible for a statutory license. Perhaps the best solution is to revisit that rule.

Why Isn’t Aereo a Cable System?

Aereo antennaThe Aereo case was argued this morning, and before Paul Clement could even get rolling on his introduction on behalf of the broadcaster plaintiffs, Justice Sotomayor hit him with this:

JUSTICE SOTOMAYOR: Why aren’t [companies like Aereo] cable companies?

MR. CLEMENT: They’re not ­­–

JUSTICE SOTOMAYOR: I’m looking at the — everybody’s been arguing this case as if for sure they’re not. But I look at the definition of a cable company, and it seems to fit.

I’ve been wondering this too. The question presented in Aereo is whether Aereo is engaged in a “public performance” when its servers automatically save and transmit recorded broadcast television programs to subscribers at their request, or whether that activity is properly understood as only the users’ activity.

In debating that issue, both the broadcasters and Aereo have at separate points analogized Aereo to a cable system — the broadcasters in the course of claiming that Congress intended to define what Aereo is doing as a “public performance,” just as it did with cable retransmission; Aereo in claiming that it is engaged in disruptive innovation, just as the early cable operators did. But that raises a somewhat different question: why isn’t Aereo subject to Section 111 of the Copyright Act? If it is, then the Court could avoid the entire debate over public performances; the text of Section 111 provides a direct route to liability for certain retransmissions without even mentioning the words “public performance.” And yet, as far as I can tell, it has not been raised by the broadcaster plaintiffs as a basis for a preliminary injunction. Continue reading

My Official Super Bowl Television Post

kitten bowl[Madisonian readers: I wrote this for a general audience. I'm reposting here for your amusement/fact-checking.]

The 48th annual Super Bowl is tomorrow, which means of course that people are thinking about intellectual property law. (Doesn’t everyone?) No, I’m not going to talk about whether your local grocery store infringes on the NFL’s trademark when they advertise “Super Bowl Savings,” except to pose the question of whether a single person ever has been actually confused about whether that indicates a relationship between the NFL and the grocery store. Or the makers of this thing. Rather, I’m going to talk about television. Specifically, what size television can you watch the Big GameTM on?

The NFL caused a bit of confusion on this score when they sent a cease and desist letter to an Indiana church back in 2007 that was planning on hosting a Super Bowl party for church members, with a fee for attendance and the game displayed on a “giant” TV. (I can’t find a description of the exact size.) In the letter and in subsequent pronouncements, the NFL took the position that it was a violation of copyright law to display the Super Bowl to a public gathering on a screen larger than 55 inches diagonally. In the face of likely congressional legislation in 2008, the NFL backed down and said it would not enforce its rule against church groups. But it still maintains that others cannot display the game publicly on sets larger than 55″.

News stories about the controversy have gotten some parts of the relevant copyright law correct, but are still a bit confusing on the 55-inch “rule” and where it comes from. So I’ll try to clarify. The short version: There is no 55-inch rule, at least not for the game itself. Continue reading

Public Domain? We ain’t got no Public Domain. We don’t need no Public Domain! I don’t have to show you any stinkin’ Public Domain!

With apologies to B. Traven and John Huston, I note that Duke’s Center for the Public Domain has a nice post about what might have been in the public domain. In my paper The Life and Death of Copyright, I go over how a few authors rallied with American interests to extend copyright term. I also show that no matter which of the main theories one looks to for IP, none supports copyright after death. None.

In other words, folks who usually disagree about all sorts of nuances in copyright, (It’s labor! It’s the personhood! It’s utilitarian!) converge on, or at least have no good support for copyright after death. Paul Heald’s work shows that the dreaded under-production myth is just that, a myth. Aram Sinnreich’s The Piracy Crusade just came out and gets into the problems with locking up work. I’ve just started it, but his run through history, sociology, and more looks to be a great addition to the literature in this space.

So it’s a new year. Old fights are with us. New ones will come. The sun also rises. Time for naked lunch.

(Note: Burroughs claimed the phrase, Naked Lunch, meant a “frozen moment when everyone sees what is on the end of every fork.” or the truth albeit ugly).

2013 in Fair Use

By any account, 2013 was a big year for the doctrine of fair use in copyright law. It was a big year for other copyright things, too; “copies” and “performances” were much in the news. More on those later, perhaps.

I had it in mind to actually write up synopses and critiques of the principal fair use opinions, but there has been no time. To borrow a phrase from Inigo Montoya, there is too much. Instead: Let me sum up.

I haven’t included cases in which fair use was argued but not relied on as a basis for decision. I haven’t included cases in which fair use was not argued but could have been – or should have been. And I haven’t included cases where fair use played an important role but wasn’t itself a litigated issue (see, for example, the continuing Lenz v. Universal Music litigation).

I have included cases that struck me, and no doubt struck many observers, as important markers on the journey toward understanding what roles (plural) fair use is playing in copyright policy today.

In reverse chronological order, with appellate cases first: Continue reading