Tuesday, June 11, 2013

Circuit Split Watch: Streaming Live Broadcast Television

This article first appeared in the June 10, 2013, issue of the National Law Journal’s Supreme Court Brief.

Through a service called Aereo, live broadcast television is available on computers in some areas. Many consumers welcome the option, but broadcasters, alleging copyright infringement, do not.

One federal appellate court recently ruled in favor of Aereo, while another is reviewing a contrary result. The U.S. Supreme Court may have the final word.

For eight dollars a month, Aereo subscribers can watch live broadcast television on their computers, tablets and smart phones. Available channels include ABC, CBS, NBC, FOX, PBS and others. Aereo is now in New York City and Boston, as well as surrounding areas. The company plans to expand in the near future to more than twenty cities.

In April, the U.S. Court of Appeals for the Second Circuit, in WNET v. Aereo, Inc., refused to block the streaming service, upholding the lower court’s denial of a preliminary injunction. Circuit Judge Christopher Droney wrote the majority opinion, joined by Judge John Gleeson, visiting from the U.S. District Court for the Eastern District of New York. Circuit Judge Denny Chin vigorously dissented.

Writing for the majority, Droney held that Aereo is essentially an antenna for the new millennium. Over the years, many viewers have used individual rooftop antennas to capture broadcast programming. Aereo uses new technology to do the same thing. Thousands of mini-antennas, about the size of a dime, are installed on boards at Aereo.

“Aereo assigns an individual antenna to each user. No two users share the same antenna at the same time, even if they are watching or recording the same program,” Droney explained.

Not so fast, countered Chin. Aereo transmits “programming without the authorization of the copyright holders and without paying a fee.” And its technology is “a sham,” he said.

Aereo has “no technologically sound reason to use a multitude of tiny individual antennas rather than one central antenna; indeed, the system is a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act.”

The Copyright Act gives copyright holders the exclusive right “to perform the copyrighted work publicly,” which means “in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible.”

Chin favorably cited a 2012 preliminary injunction order from the opposite coast involving Aereokiller, a not subtly named Aereo competitor.

In that case, Fox Television Stations, Inc. v. BarryDriller Content Systems, PLC, Judge George Wu of the U.S. District Court for the Central District of California blocked a broadcast-TV-to-Internet service. Like Chin, Wu found that the broadcasters’ exclusive public performance rights had been violated.

The California decision is on appeal and currently being briefed at the U.S. Court of Appeals for the Ninth Circuit. Numerous amici have filed briefs.

The Second Circuit is considering whether to rehear the Aereo case en banc. Chin’s forceful dissent and the fact that one of the judges in the majority was visiting make the full court’s review more likely. Numerous amici have also filed briefs in the Second Circuit.

No matter what happens in either circuit (or in related litigation popping up as Aereo and copycat services expand), a Supreme Court petition is likely, given the financial stakes on both sides.

If the split in authority holds, the issue could be attractive to the Supreme Court. It could also warrant review as an important federal issue affecting a significant industry and consumers nationwide.

Congress could also step in to either nix or allow Aereo-like service by amending the Copyright Act.

FOX’s parent company has stated publicly that it would consider making FOX a pay channel if Aereo is allowed to continue. At least one other network is hedging its bets.

In April, CBS announced that it had purchased a minority interest in Syncbak, which streams broadcast programming live to various devices, in partnership with local television stations.

If other networks follow suit and look for new options, consumers could end up winning, regardless of who wins in court.