Fri, Jun 27, 2014 - Page 15 News List

US justices rule for broadcasters over Aereo

AP, WASHINGTON

Aereo CEO and Founder Chet Kanojia stands before reporters outside the US Supreme Court in Washington on April 22.

Photo: Reuters

The US Supreme Court ruled on Wednesday that a startup Internet company has to pay broadcasters when it takes television programs from the airwaves and allows subscribers to watch them on smartphones and other portable devices.

The justices said by a 6-3 vote that Aereo Inc is violating the broadcasters’ copyrights by taking the signals for free. The ruling preserves the ability of the television networks to collect huge fees from cable and satellite systems that transmit their programming.

Had services such as Aereo been allowed to operate without paying for the programming, more people might have ditched their cable services, meaning broadcasters would have been able to charge less for the right to transmit their programs.

Aereo looks a lot like a cable system, Justice Stephen Breyer wrote for the court in rejecting the company’s attempts to distinguish itself from cable and satellite TV.

“Aereo’s system is, for all practical purposes, identical to a cable system,” he said.

Aereo is available in New York, Boston, Houston and Atlanta among 11 metropolitan areas and uses thousands of coin-size antennas to capture television signals and transmit them to subscribers who pay as little as US$8 a month for the service. Because each subscriber is temporarily assigned a dime-sized, individual antenna, Aereo had made the case that it was not like a cable company and was not doing anything customers could not do on their own at home.

Company executives and prominent investor Barry Diller have said their business model would not survive a loss at the Supreme Court.

Aereo CEO Chet Kanojia called the decision “a massive setback for the American consumer” and said the company would continue to fight, without being specific.

“We’ve said all along that we worked diligently to create a technology that complies with the law, but today’s decision clearly states that how the technology works does not matter. This sends a chilling message to the technology industry,” Kanojia said in a statement.

Some justices worried during arguments in April that a ruling for the broadcasters could also harm the burgeoning world of cloud computing, which gives users access to a vast online computer network that stores and processes information.

However, Breyer said the court did not intend to call cloud computing into question.

Justices Antonin Scalia, Samuel Alito and Clarence Thomas dissented.

Scalia said he shares the majority’s feeling that what Aereo is doing “ought not to be allowed.” However, he said the court has distorted federal copyright law to forbid it.

The US Congress should decide whether the law “needs an upgrade,” Scalia said.

Broadcasters including ABC, CBS, Fox, NBC and PBS sued Aereo for copyright infringement, saying Aereo should pay for redistributing the programming in the same way cable and satellite systems must or risk high-profile blackouts of channels that anger their subscribers.

The National Association of Broadcasters (NAB) praised the court for rejecting Aereo’s argument that the lawsuit was an attack on innovation.

“Broadcasters embrace innovation every day, as evidenced by our leadership in HDTV, social media, mobile apps, user-generated content, along with network TV backed ventures like Hulu,” NAB president Gordon Smith said.

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