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 as well if you want to check that out.


Comments (Archived):

  1. Brandon Burns

    The three most conservative justices dissented (i.e. voted “pro-tech”). Curious to hear feelings about that…

    1. Jordan Thaeler

      Sucks for disruption in general. When Apple shut off WiFi tracking on its phones it quietly killed a group of startups, and when Oracle bought Micros it also quietly killed a group of startups. I keep hitting my head on this theory that many markets get cornered by those with the most money.

    2. fredwilson

      well we spent our time in DC yesterday with conservatives. the tech industry needs to do more of that

      1. pointsnfigures

        Yupppp (channelling my best Fred)

      2. Brandon Burns

        One usually doesn’t associate conservatives with pro-tech, but looks like the SCOTUS bench is shaking out a bit differently. Scalia, Thomas and Alito had Areo’s back.Maybe the tech industry needs to be focusing more energy on the liberals?!

        1. pointsnfigures

          Liberals generally like govt solutions to problems. They are okay with big govt and highly suspicious of big corps. Establishment Republicans try to work with big govt, and love big corps. They engage in regulatory capture to help their big companies. There is a growing wave of Republicans that hate both big government, and don’t trust big corps. Call them Tea Partiers or classical liberals. The election in VA of Brat over Cantor clearly showed that. Scalia, Thomas, and Alito generally align with the small govt individual liberty sect.

    3. Aaron Klein

      Not surprised. We (generally) believe in freedom.

  2. ErikSchwartz

    “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. “I know of several companies doing just this. All you are really doing is attaching an OTA tuner to a sling box.

    1. fredwilson


    2. rpsfan sounds cool, but it doesn’t solve the issue of not being able to get a good antenna signal. Of course Cable TV solved this years ago and well Aereo solved it swimmingly too.Aereo will be missed. It was so easy to set up and you didn’t have to wait many days for the cable TV man to show up or not.Uggh, today the consumer got the shaft from the court, the same shaft they’ve been getting for years via the Cable & Internet provider!

  3. jason wright

    i always had you down as a layperson

  4. ErikSchwartz

    I’m really of mixed opinions on this one. Their solution was a really ugly hack.

    1. fredwilson

      i am with you. i never loved Aereo but I the decision has some important implications

      1. ErikSchwartz


    2. LE

      It’s a rube goldberg machine way to get around the law. No surprise Scotus felt the way they did.The duck likeness here was the fact that they had to go to those lengths to even do the idea.Right off the bat that tells you something is rotten in Denmark.You’ll note that in the case of Sony it wasn’t Rube Goldberg at all.

  5. jason wright

    so not now coming soon to 19 more cities! that’s a lot of people six judges have denied a disruptive service. i wonder where they reside?

  6. Druce

    Seems like extending analog laws and regs to digital because it ‘quacks like a duck’ could have wide implications, e.g. you could have argued Internet radio should have been subject to the over-the-air copyright licensing regime because it does the same thing.I’m not sure Aereo could have made a third-party liability argument they were exempt because they were just carrying a signal and it was the customer who was liable for infringing, given that Aereo was marketing the antenna and entire allegedly infringing end-to-end service to the consumer. Seems like Aereo went with the customer antenna legal hack for that reason. I’m not seeing how this ruling breaks 3rd-party liability, I would assume their ISPs, if they hosted some stuff through Amazon etc., those would not be liable.

    1. Druce

      Time to take away broadcasters’ free spectrum if they don’t put free streaming on the Internet –

      1. Prokofy

        Time to put more pirates in jail.

  7. Ted Carroll

    Fredwe’ve had broadcast tv and cable tv properties in portfolio. We’ve beenbuilders and buyers in those segments, and lived with ‘must-carry’ and ‘no mustcarry’ laws. And we’ve built and bought internet-only content companies. As I just toldDan Primack on Twitter – “Re-transmission of copyrighted work requires permission of the owner. And an owner can require compensation for use.” Dan is in Camp Scalia. And I just don’t see it.

    1. fredwilson

      i think the question is where do you draw the line. can i install an HD antenna in my home, capture the signal, transcode it, and then post it to the cloud, and then stream it back when i want to watch it and on what device i want to watch it?i think the answer has to be yes to thatso the question is not about Aereo, per se. they drew the line in the wrong question is where do you draw the line?

      1. ShanaC

        why do you think they drew the line at the wrong place – the walk/quack things actually seems reasonable – but this might be because server/client architectures seems very unnatural when you first look at it

      2. michaeldowns

        P2 of SCOTUS decision ( points to amended Transit Clause of ’76 Copyright act concluding that to equip is to perform. So, it’s tough to see an “un-infringing” hardware solution if the ultimate performance does not have copyright holder’s agreement.

      3. Ted Carroll

        Yup – Dan also went the home antenna route with me. And my reply was “I have one – sure. Bought it at Radio Shack. And I only get copyrighted works from owners who permit OTA distribution.” The copyrighted content owners permit Over The Air (OTA) distribution of their property for personal use. Your example focuses on personal use. Any commercial re-transmissionof that property requires property owner consent. There’s my drawn line –commercial. Commercial re-transmitters are common in broadcasting. Re-transmitters can license the copyrighted material under commercial agreements.

        1. CJ

          So if my buddy rents me space on his roof for an antenna and then sends me the signal over a point to point connection, am I infringing?

          1. Ted Carroll

            1 – is it your antenna on his roof? 2 – are you sharing the antenna signal with your buddy, or keeping it for your private personal use?

          2. CJ

            My antenna and no, not sharing.

          3. Ted Carroll

            You’re fine – you are using the copyrighted content for personal use in your household as the owner permits. That you rent space for your antenna and P2P connect the antenna with it the rest of your personal signal reception gear is within the use approval granted to home users like yourself.

          4. LE

            Possession is 9/10 of the law. The other 1/10th is legal fees. Consequently if someone tried to do this on scale it would almost certainly get shut down whether it was actually legal or not in the end.The way I read it this definitely falls on a large scale as “looks and quacks like a duck”.For example let’s say you own an auto. And let’s say you have the ability to be convered by your auto policy for “any household members”. Further let’s assume that the policy doesn’t define what a “household member” is because it’s obvious or there hasn’t been a legal reason to do so.Now let’s say someone decides to skirt the insurance rules to allow someone to drive their car (like a rental company) and sell some share in their house that makes someone a “household member” for a brief time period (multiplexing). What’s the chance that that would fly in the end? It wouldn’t.

          5. Ted Carroll

            I love duck analogies LE but scale here isn’t the point – commercial re-transmission is. Here’s what I just posted to Twitter: “Broadcast re-transmission of copyrighted work for commercial purposes simplified: Sign my contract & compensate me.”

      4. Aviah Laor

        Sounds similar to the Universal vs. Sony case. The duck here is the VCR

      5. SubstrateUndertow

        Should that line include allowing a friend to access my personal streaming DVR content ?

      6. LE

        There are many things you can do as an individual that fall beneath the radar and are deminimis.But take the same thing and package it a certain way for the end user (as a product or service) and then it quacks and looks like the duck (great analogy by the way) that is against the rules or the law.The only thing that would keep you out of hot water, duck wise, then, is to simply sell a book or information on how to do the activity or skirt the law.But if you came close to offering to much of an end product w/o plausible deniability (think “head shop” =! Marijuana) then it’s a different story.Of course that way you lose the ability to market it using traditional methods “buy your pot devices here!” so it’s nowhere near as attractive as a business.

      7. fl1nty

        Where does something like fit in here? It allows you to stream out content you have locally on your computer and share/stream it live with others online. The content could have been acquired by whatever means but it is essentially gonna be available for streaming to users who browse to your “channel”

    2. Dave

      I struggled with this one as well and don’t see how the court could have reached another outcome here. Aereo struck me as a well lawyered theft from copyright owners. They tried to thread the needle between cable and not, and lost. Not a big surprise. Ultimately the copyright owners and those to legitimately acquire the content, have a right to control its distribution subject to whatever regulations are put in place (a whole separate discussion).Disruption is one thing when you disrupt an existing industry by putting something new in place. Disruption when you take someone else’s stuff to make your disruption is fundamentally different, and should be.

  8. Robert Seidman

    Fred, there are several OTA DVR solutions available already (see ) and I think it’s reasonable to expect that in short order you’ll see things like that combined with (some/most/all of) the Internet streaming functionality stuff like Roku provides.I too believe that *some* customers want to be able to DVR and stream content that is available free OTA, but my guess is most people probably don’t (or don’t want to) think about it at all.

  9. ShanaC

    I’m waiting for round 2 of this battle. And I should read the opinion.

    1. Aaron Klein

      There is no round 2. That was like round 6. Supreme Court. Game over.

  10. Salt Shaker

    Well, not so sure Aereo is completely dead in the water just yet. If they can negotiate retransmission consent agreements with content providers at modest fees, then maybe the “duck will continue to quack.” Aereo can become an additional rev stream for broadcast nets, although I’m sure the cable, sat and telco guys wouldn’t be particularly happy, assuming, of course, there’s no conflict w/ existing carriage and/or affiliate agreements. CBS est. to generate $2B in retransmission rev by 2020–and that’s nothing to sneeze at.Aereo can still potentially function as a default OTA alt w/ limited channel avails (sans basic and premium cable) for families w/ limited means.

    1. LE

      True but then if that is the case the technology that they use won’t have to be as sloppy and then others can do the same thing so they are less unique.

      1. Salt Shaker

        Aereo, or any other entity, would insist upon an exclusivity clause as part of any retransmission consent licensing agreement.

        1. Druce

          Hmmm… “What are you going to do, bleed on me?” What leverage do they have to insist on anything?

  11. feargallkenny

    One key benefit of Aereo’s solution that wasn’t covered by Boxee’s Antenna feature was the remote antenna – where you could avail of far better antenna reception that you could get say from your apartment window, and therefore get more channels. This was particularly useful if you were in an area that took a major step back in antenna coverage when we moved to Digital signals a few years back. Now those customers have no choice but to use MSO monopoly offerings in those areas

  12. Andy

    I had wanted to send a ‘Friend of the Court’ brief, however I am just to preoccupied trying to find a job. The substance of what I had wanted to say is -I recall some sort of FCC deal with the broadcast/cable industry years back. In exchange for something they got (I forget what), they had to offer up a digital signal that consumers could receive free over the air. This whole past bargain IMO was a scam. Over the years, I purchased various digital antennas, and installed them in various residences throughout Boston, New York City, Long Island and Phoenix where I had lived. What I realized after this repeatably failed process was that you can only get that free over the air, digital signal if you have DIRECT line of site…which from my experience, very few do.The premise of Aereo for me, was to offer what the FCC deemed I could have for free, but to correct an technical fault that had previously not allowed me to take advantage of. The only difference, was that Aereo would actually work for those like me, who did not have line of sight to the signal – and for that, I felt the $9.99 fee they would charge was extremely reasonable.

    1. Aereo fan

      I agree with this description of what Aereo is. It is an antenna that allows me to get the content that should be free for me anyway. I never understood the fee to be for that service anyway and thought the fee was for the DVR service. So in fact Aereo wasn’t making money of redistributing content anyway. That’s probably a stretch, but that’s how I justified it in my head and why I think they should have won the case.

  13. phoneranger

    Hang on Americans. Aereo wasn’t the only company pushing OTA content over the internet. Check out It’s legal. It’s Italian. Sign up and watch RAI and Mediaset to your heart’s content. Although IT is out in the World Cup. ;(I’d recommend that Aereo export their technology to other countries with lots of expats but frankly their solution was ,,,,,ummm over-engineered.

    1. LE

      Scalia and Buffet are like co captains of the cruise ship “Avuncular”

  14. PhoebeCDonmoyer

    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.

  15. cdhunt

    Boxee appears to also be gone.”The beta Cloud DVR functionality we provided to certain Boxee TV users will be discontinued on July 10th.”Also, the cost of Tablo is huge compared to Aereo. $220 + $5/month + BYOD versus $12/month?The good news is Aereo can stop investing in antennas and just put up one and record everything and re-broadcast like a cable company. Maybe the savings on hardware will offset the re-transmission fees.

  16. pointsnfigures

    Are companies responsible for what they customers do with their product? It seems that is one of the areas that Scalia is uncomfortable with. “So which is Aereo: the copy shop or the video-on-demand service? In truth, it is neither. Rather it is akin to a copy shop that provides its patrons with a library card.”

  17. William Mougayar

    If Aereo ends-up closing down because of this, they deserve a medal of honor for entrepreneurship bravery. There is already a lot of innovation in video streaming over the air anyways, and other solutions will emerge.There is nothing stopping the cord cutting trend, and the cable companies are dead in the long term.

    1. Salt Shaker

      Sports rights continue to fuel the engine. If You Tube, Netflix, etc., ever decide to pony up, then cord cutting will flow like Niagara Falls.

      1. phoneranger

        No question that sports are big. But you shouldn’t forget that people who hate and/or don’t want to pay for ESPN is a huge market.

        1. Salt Shaker

          Quite true, but no one hates the ESPN stranglehold more than advertisers.

      2. ErikSchwartz

        Sports are rapidly moving off of OTA TV anyways.

    2. DM

      I’ll be watching ahead for a discussion about the highest and best use ofour spectrum resource. If very few city people can access and use an antenna, thequestion becomes how will the pull of Choice be facilitated in the face of giant monopolies pulling the strings of government oversight & regulation?Copyright is certainly fair but owning the spectrum and not using iteffectively, in an era of extreme scarcity, demands that we (socially)revisit the allocation, ownership, and use issues.In the medium term this court decision will affect the social contract. Individual Americans will increasingly view these ever more expensive services as taxes, (rent), just to participate in something originally designed as free to the user. None of this last thought is new but spectrum is the weak seam and pipeline monopoly/oligopoly is a very big problem. Connectivity became a utility, and everything changed. The rest is an inter-generational workout. I think so anyway.

    3. dounts

      cable companies aren’t going anywhere. they have the pipe.

      1. William Mougayar

        But less and less content is being viewed via those pipes. Same trend as what happened to the telephone lines, with cellular eating into landlines.

  18. Jon Michael Miles

    The broadcasting industry is handling this with the intelligence of the music industry, whose market caps were effectively transferred to Apple if memory serves. The idea that the court said you have to have a certain piece of technology to access the local news, instead of what makes sense for you the consumer has all the wisdom of a brick. I understand the ‘if you want our content you have to pay model’ – people need to get paid – but this is not that duck. This duck is already free. And let’s not forget the “I Heart Radio” App that allows me to listen to any station I want. It’s the same idea.

  19. Richard

    Why is it that people always preface their opinions on a legal ruling by starting “I’m not a lawyer etc. ?” Most ruling are fairly strait forward. To the extent that they are confusing, they are simply that “confusing”.

    1. LE

      Part of the reason people do that is because they are parroting what they see others do.Another reason is that they somehow think they have some liability when offering legal advice and not a lawyer (they should spend time worrying about other things if they think that).Lastly it gives them cover if they are wrong in their opinion or what they say. So there is less downside to being wrong and they get the upside of they are right.For example I might make a comment about sports but preface it with “I’m not a sports fan as you know”. The idea is if I sound stupid there is an explanation other than I”m stupid.

      1. BrandonLive

        Many of us have been trained by employers (and their lawyers) to A) Not comment (anywhere, but particularly e-mail) on legal matters involving the company, and B) to include the IANAL preface if you must do so. As I understand it, this is so that a lawyer suing the company (or one you have a business relationship with, such as a VC perhaps?) may go through your communications, find your comments, and use them to make an argument about the company’s guilt. The IANAL preface potentially gives the company’s lawyer an out to say that those comments aren’t relevant and were the uninformed personal views of an individual, not factual statements of the company’s legal status.

    2. Guest


  20. Khai Nguyen

    Very good and detailed analysis from Gary Brode at Silver Arrow Investment Management , discussing Aereo ruling and how broadcasters are still dead as well:

  21. Aaron Klein

    This is a travesty for innovation. The unholy alliance of big government and big business prevails again.As I tweeted: “Without payphones, cell phones might be useless. Therefore, we ban cellphones unless they pay royalties to the payphone.”

    1. ErikSchwartz

      I think the level of innovation displayed by Aereo is actually pretty minimal.

    2. Prokofy

      Oh, nonsense. It’s not innovation to steal other people’s stuff and sell ads with it and pocket the revenue. And yes, copyright infringement is stealing — stealing of the capacity to sell a commodity. It’s time to stop bleating about “innovation” in these disputes because no one believes that the ad click is innovation any more, and it doesn’t become more blessed by being next to hijacked content.

      1. Aaron Klein

        You clearly know NOTHING about Aereo, their technology or their business model.

  22. Pike

    Aereo has won the little cases lets see what will happen in the supreme court.

  23. ErikSchwartz

    Aereo had another really big problem (which ties into yesterdays conversation) other than their likely fatal legal one. In order to scale they would need to both peer and cache in the major ISPs located in each DMA they served. In most cases those are MSOs (cable and telco operators) who also retransmit TV signals and pay a lot of money in order to be able to do that.Aereo would be in the position of needing peering and caching relationships to deliver content they are not paying for, those relationships would need to be with ISPs who are paying large retransmission fees to distribute the same content over the same pipes (which they paid millions to build).

  24. Robert Heiblim

    Hi Fred, not happy but not surprised by the ruling. As you state it looks like they are profiting off of others. This as opposed to Slingbox (owned by DISH) or others that could deliver your over the air content to the network for you but in this case from a TV in your home proving your point. However, it is hard also to see entrenched industries operating from rules and structures that have been in place for so very long without considering the need for innovation. Without pressures like Aereo or Boxee there seems little end in sight for high fees, program costs for what you do not want, etc. Even if only from the incumbents it needs to change so too bad this path is closed. It is not like Aereo was for everyone or much of a threat in an of themselves.

  25. John Ruble

    Old business model:Aereo owns a bunch of tiny antennas, which they “rent” out. Aereo hardware receives the signal, decodes, reencodes, transmits over the internet.Proposed new model:[Aereo or other disruptor] produces a bunch of tiny boxes that contain an antenna, decoder, encoder, and an ethernet jack. They sell you this box. When it arrives on your doorstep, you mail it to their colocation facility. You pay them for electricity and an internet connection.Would this be sufficiently strong legal hackery? Could this even be done profitably?

  26. Alex Prushynskyy

    This is another proof of how disconnected our lawmakers are from Internet realities.

  27. Prokofy

    But Scalia still found that Aereo was infringing, and he said cogently that it is neither a copy shop or a library.This is a good decision and preserves value of content for years to come from the predatory “California Business Model” which is of course your bread and butter, so you don’t like it.