The Aereo Ruling

The Supreme Court just issued its opinion in the case between the TV broadcasters and Aereo over the legality of the Aereo service. It was not particularly close. Six Justices felt that Aereo was infringing broadcaster copyrights. Three dissented.

I just read Justice Breyer’s majority opinion (available on the link above). As I read it (recognizing that I am a layman), the majority went with “if it walks like a duck and quacks like a duck, it must be a duck” argument. They felt that, as delivered, the Aereo service is essentially equivalent to a cable TV service and the rules should be applied similarly.

Justice Scalia’s dissenting opinion rejects the “it must be a duck” argument and goes further to suggest that it ignores widely recognized “service provider liability protections” and will cause confusion for years to come:

The service provider liability protections are near and dear to Internet startups. Many of the companies we have backed over the years have relied on these protections to avoid getting sued out of business the way that Aereo may have just experienced. These are important protections and it is very unfortunate to see a majority of the Supreme Court set a precedent here that goes against those protections.

It seems to me that the majority opinion creates an incentive for engineers to build hardware that would be operated by individuals to create a similar benefit but that doesn’t look and act sufficiently like cable to be infringing. Our former portfolio company Boxee, which was sold to Samsung last year, built something similar to Aereo but instead of provisioning it as a full blown cloud service, required each user to buy a BoxeeTV to get similar functionality. Boxee was not sued by the broadcasters and is now part of Samsung which may not push forward with that part of Boxee’s business (I have no idea), so it’s not clear if that approach will be legally tested any time soon.

But I do believe that customers want to be able to DVR and stream HD content that they can get for free over the air from the broadcasters and I imagine that engineers are already working on other approaches to give the users what they want.

There’s a discussion of this issue brewing over at USV.com as well if you want to check that out.