Today, the David-vs.-Goliath moment that we’ve all been waiting for will finally arrive. In just a few short moments, Aereo CEO Chet Kanojia and his legal team will enter the Supreme Court Courthouse to make final oral arguments against multiple broadcasters.
But let’s recap:
Broadcasters and Aereo have been in a legal battle for more than a year, arguing over copyright and transmission issues. Aereo works by charging customers to rent out their own tiny, remote antenna with which they can record television from OTA broadcast channels. There is a couple-second delay, but it feels live. And this has truly peeved broadcasters, who feel that they should be able to charge Aereo for transmitting their signals.
However, according to the Copyright Act, and more specifically the Transmit Clause within it, consumers have every right to access free broadcast television with an antenna and record it as they like. The act of capturing that broadcast signal is not against the law, thanks to early precedents set by Sony Betamax and Cablevision.
However, the broadcasters want to say that since Aereo is facilitating this behavior for thousands of customers, it constitutes a public performance. Aereo counters that argument by saying that it is not Aereo, but individual users, who are accessing the content on their own individual streams that are unique to them. Under those stipulations, the transmission is a private performance.
It’s an incredibly hairy situation, and a case that has experts left guessing at the outcome.
Meanwhile, the future of cloud computing allegedly hangs in the balance. If the Supreme Court rules in favor of the broadcasters, that leaves open the potential for lawsuits against Google Drive and Dropbox, which also let you take legally acquired content and transmit it through the cloud.
To clear all this up for us, and get a sense of what is expected in the trial, we hopped on the phone with Chet Kanojia to discuss the case. I’ve transcribed, and edited, the interview for easier reading (as opposed to listening) but nothing has been cut or changed to lose context.
TechCrunch: Everything in Aereo’s past comes down to this hearing. Much of your funding has gone toward this legal battle, and it was one that you and Barry Diller were ready to fight all along. In fact, you planned to go to the Supreme Court as early as possible to expedite the case. The moment has finally come, so how do you feel?
Chet Kanojia: I feel pretty good about our position and our merit. From our perspective, the facts are not refutable. Where we fit in with the policy and the law, it just logically makes a lot of sense.
TC: What odds would you give yourself?
CK: I wouldn’t want to guess, and it would be totally inappropriate to do that. I will say that I’d rather have my case than theirs, and I’d rather have my merits than theirs. We’re based on the facts and the statues and hard things as opposed to fluff. It wold be incorrect to forecast anything, so we’re letting the process play out. The judges are just and fair, so I have faith in the process.
TC: What happens to Aereo if the broadcasters win the case?
CK: I’m actually not sure what that means for Aereo. If you remember, the relief that they had asked for was this weird thing that said Aereo users shouldn’t be able to watch the recording while the show was actually airing or during the process of recording. There’s no real standard to determine what live means, so I’m hesitant to answer this particular question. It all depends on the scope.
If the judges say that the idea of a consumer having their own antenna to access broadcast content isn’t sufficient, we’re probably done. If it’s something in between, we wait and see what emerges and determine if that is viable for us or not.
TC: The Assistant Attorney General and Copyright Office will be speaking on behalf of the broadcasters during oral arguments. Do you think their appearance, or the government’s stance toward Aereo, will affect the outcome of the case?
CK: I don’t know. The only thing I can do is look at it from a merit basis. No matter how you look at the case, they offer no rational reason for suggesting Aereo is not legal. The keep citing things from the sixties, and the copyright arguments they make are utterly baseless. Even the cable companies don’t pay for copyright payments — they pay retransmission fees. It has nothing to do with copyright. Trying to extend that copyright to corporate has never been done before.
Further, the biggest issue they don’t offer is how, on a technical basis, there is a difference between what we are doing and what Google Drive is doing. They keep saying “we can look at that later.” That reeks of “we don’t have an argument.”
TC: Speaking of Dropbox and Google Drive, that seems to be a big part of your argument. That cloud computing and storage services would be hurt by an Aereo loss in court. Many tech companies have rallied behind you for that very reason. But what exactly are the implications for those types of companies in this case?
CK: If you think about what’s in front of the court, it’s the Transmit Clause. In our case, the way the broadcasters argue is that it doesn’t matter how many private transmissions are being made. That you need to reaggregate all of the transmissions when looking at whether or not it’s public or private performance, and that figure constitutes your answer.
Hypothetically, let’s say I purchase a song legitimately from iTunes and load it into Google Drive — which is something almost everyone using iTunes and Android does. The broadcasters are saying that every time that legitimately purchased song is uploaded to Google Drive, those don’t count as private transmissions. Instead, looking at the reaggregated transmissions, there are so many of them that it becomes public.
You can’t change the Transmit Clause to only affect one company.
No where in the Transmit Clause is there any indication that you should reaggregate the transmissions when making this determination. In fact, there are multiple indications throughout that you shouldn’t regaggretate.
TC: The broadcasters claim that the main difference between those services and Aereo is that Aereo facilitates the acquisition of the content in the first place, as opposed to the storage or transmission of that owned content after the point of acquisition. How do you respond to that?
CK: That’s absolutely incorrect. Aereo does not provide any content to the consumer. The system sits dead and empty until a user tunes the antenna, captures the content, and watches it at the time of their choosing. That’s why the facts are so critical. And the broadcasters can’t dispute the facts because they are true.
The consumer determines when and where they want to record, when the recording starts and stops. Aereo itself provides no content.
TC: The broadcasters have threatened to take their public broadcasts off the air and become cable companies, should Aereo win. Is there any fear in provoking such an action, and what would happen to Aereo if they did pull the plug on OTA broadcasts?
CK: That’s hyperbole. First, they would have to justify their actions to local broadcasters. And the reason I’d say it’s hyperbole is because 90 percent of their business is advertising. They’d have to give up the 60 million Americans they claim are accessing their broadcasts via an antenna, which would cause a considerable hit to their revenue.
They’d also have to face Congress and say that they believe the Americans that aren’t willing to be a part of the cable monopoly bundle don’t deserve access to public television. That argument would fall flat on its face.
Not only would it not fly from a revenue perspective, but it just wouldn’t make sense from a policy perspective, either. They built their business on $3,000 worth of spectrum given to them by the government. If they’re willing to disenfranchise people for activity that is legitimate — using an antenna, which is the basis of broadcast — I just don’t see how that flies.
Editor’s Note: This interview took place at 6pm, Monday April 21, the night before the hearing. For more information about the hearing, visit this link.