Did Aereo Kill The Cablevision Ruling That Enabled So Much Innovation? Who The Hell Knows?

from the and-that's-why-it's-a-problem... dept

Mon, Jun 30th 2014 2:05pm — Mike Masnick

We've already discussed how the Aereo ruling is a disaster because of its lack of guidance, and a perfect example of that is that reading the decision you would have no idea whether or not it outlaws Cablevision's remote DVR service. None. It all depends on who you talk to. During the oral arguments, it appeared that the Justices recognized that they wanted to keep the important 2nd Circuit ruling that found Cablevision's remote DVR legal, with Justices even asking lawyers to take that ruling as precedent (even though it's not, since the Supreme Court refused to review that ruling). That's why it's been somewhat shocking to many that the final ruling from the Supreme Court doesn't even address Cablevision, other than an aside in a footnote.

And that means it's basically an open question as to whether or not Cablevision's remote DVR is still legal or not.

Cablevision, not surprisingly, insists that the ruling vindicates its position. You may recall that even though Aereo was relying on the Cablevision precedent, Cablevision sided with the broadcasters, stupidly believing that the Supreme Court would reject Aereo while preserving the Cablevision ruling. So, when the ruling came out, the company announced victory:

"We are gratified that the Court's decision adopted a sensible middle ground, holding that unlicensed retransmission services like Aereo violate the copyright law, while protecting consumer-friendly, cloud-based technologies, such as RS-DVR. The real winner today is the consumer who will continue to benefit from future innovation."

The problem is that's not true. The Court doesn't really say a damn thing about Cablevision, and leaves it out to hang based on the amorphous "looks like a" test. Law professor James Grimmelman is pretty sure that the Cablevision ruling is now dead, because the Aereo ruling totally overshadows it and creates this new standard that would clearly wipe out the Cablevision standard. Similarly, law professor Eric Goldman wonders what's left of that ruling:

... because the court said Aereo took the legally significant actions, it's possible this ruling overturned the 2008 Second Circuit ruling, exposing DVR service operators to new liability. The opinion further reinforces the riskiness of DVR-as-a-service when it says the simultaneous delivery of content to multiple viewers is an infringement, even if the system stores and delivers a personal copy for each viewer (the court later implies that even simultaneous delivery isn't required to violate the law).

Another commentator, Deborah Goldman, notes that the SCOTUS ruling "eviscerates" that ruling.

However, not everyone is convinced. Matt Schruers suggests that the Supreme Court effectively side-stepped the question by avoiding even looking at the DVR features of Aereo's system:

Importantly, yesterday's decision doesn't reach the question of Aereo's DVR-like features, and it seems clear that the Court's opinion does not aim to upset Cablevision.

But, of course, there's a difference between aiming to upset Cablevision and actually upsetting Cablevision, and there's nothing in the ruling that suggests a second shot at a remote DVR system won't turn out quite differently, given that plaintiffs can now use the "looks like a duck" test, rather than ever looking into the black box to see if the company hosting the DVR is really doing any infringement. And it gets especially worrisome with non-tech-savvy judges. While Schruers isn't sure if this ruling upsets the Cablevision standard, he is worried about the resulting uncertainty:

On the other hand, the Court's approach offers technology lawyers counseling clients little guidance. Who can predict whether a non-tech savvy federal judge will think that the next innovative service "looks like cable"? Yesterday's decision creates considerable uncertainty, suggesting that lawyers should counsel their clients based on what analogy will most appeal to a federal judge in the distant future. The Court — like others in the lead-up to the decision — promises its opinion won't threaten new technology, but as the dissent points out, it cannot deliver on that promise.

And this is not a small issue. As we've noted, a study by Harvard professor Josh Lerner found that the certainty created by the Cablevision ruling, resulted in somewhere around a billion dollars in new investment. Take that certainty away... and a lot of investment is about to go elsewhere.

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Filed Under: copyright, innovation, looks like a duck, remote dvr, supreme court, uncertainty
Companies: aereo, cablevision

35 Comments

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Anonymous Coward, 30 Jun 2014 @ 2:26pm

let's put it this way, i'll bet what you like that the entertainment industries at this very minute are co-ordinating a plan to get the vcr ruling from decades ago overturned! and the ones you can thank will be the same fucking idiots that said it was legal originally, ie, the Supreme Court! to rule on the Aereo issue how it did shows to me that there has been some serious back-handing going on! no up to date technologist could think for a second that sending sound and video down a fixed cable is the same as receiving it through the air! this ruling sends the messages that
a) those on the supreme court bench are technologically out of touch by a long way, and
b)that eventually lobbying and brown envelopes can get even the highest law enforcer on your side!
this is a despicable ruling. everyone knows it, including those who were fighting it! considering that every previous court decision went in Areo's favour, it was either don purposefully to try to break the bank or leaving it to the last deciding option, to make it known that there will never, in the USA, be any way to stop the ages old industries and allow for anything new to compete with that old method. this was an extremely bad result for the USA and i hope those that made the ruling are proud of themselves! (i suppose the increase in the spoils from the job will make it easier to endure though, dont you?)
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Anonymous Anonymous Coward, 30 Jun 2014 @ 2:35pm

Anybody else getting the feeling that...
...the Supreme Court makes these indirect rulings to keep the economy for lawyers on the rise (equal does not account for inflation when trying to grow a business)?
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Anonymous Coward, 30 Jun 2014 @ 2:45pm

blown out of the water
I think if you use this awful precedent as a stepping stone, the cablevision ruling is left in tatters. Aereo was basically RS-DVR with an antenna attached; and because the technological implementation 'makes no difference', the lack of antenna doesn't change the 'look-a-like' test. This is an absolute disaster of a ruling.

This is what happens when you try and twist the law to fit a meaning; you rip giant holes in it that you're too busy stretching for a goal to notice.
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Anonymous Coward, 30 Jun 2014 @ 3:23pm

I'm able to watch live RT News streams over the internet, without a subscription. Yet I can't watch ABC, Fox, NBC, or MSNBC live over the internet.

Guess I'll just continue getting my new from RT. They're leading the way through innovation and reaching broad audiences, while American news networks are stagnating.

The rest of the world will probably have live streaming TV over the internet before the USA does. America has long thrown innovation out the window in favor of intellectual property privileges (IPP) and the monopolies those intellectual privileges help build though the use of litigation as a blunt weapon.
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Anonymous Coward, 30 Jun 2014 @ 3:37pm

Maybe try coming up with a business model that doesn't get you sued. Are people really that unoriginal?
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Anonymous Coward, 30 Jun 2014 @ 3:44pm

Re:
No people are just that arrogant that they don't think they should pay for the content of others.
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Anonymous Anonymous Coward, 30 Jun 2014 @ 4:05pm

Re:
You mean when you try something your research leads you to believe that it is completely legal and someone else sees it differently it is a lack of originality?
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That One Guy (profile), 30 Jun 2014 @ 4:09pm

Re:
https://www.techdirt.com/search-g.php?q=patent+troll

Yeah, have fun with that.

If 'not getting sued' was the goal, then no business would ever be created, since there's always the threat that some parasitic company that creates nothing but legal fees will come knocking with a 'Pay us X now, or twice that in court defending yourself' shakedown threat as soon as they think you have enough money to be worth the effort.
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Ben (profile), 30 Jun 2014 @ 4:11pm

Re: Re:
No people are just that arrogant that they don't think they should pay for the content of others.
No; it is the expectation that if someone gives you something for free (namely free, over the air broadcasts) that you should be able to do with it as you please. Like record it on a VCR (which the Supreme Court approved), or a DVR (which they also approved since they decided to let the appellate ruling stand), or a DVR with a really long cord connected to your TV (same ruling).

Aero did not break the rules, nor were they doing anything any private citizen could do -- set up an antenna; connect it to a DVR, then connect that DVR to a display device. Aero's business model was to do that for you, and charge you for that service not the content, because the content is/was free.
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Groaker (profile), 30 Jun 2014 @ 4:40pm

Cord cutting
I cut the cord, not to avoid paying for what I watch, but to avoid paying for what I don't watch. I only watch three paid for channels which I can't get on cable. And I wouldn't have cable again no matter what, unless they had at least a couple of watchable channels ala carte.
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Rekrul, 30 Jun 2014 @ 4:59pm

SCOTUS needs an enema.
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Anonymous Coward, 30 Jun 2014 @ 5:42pm

On the bright side, there is now a far better punch line to the nonsensical humor question:

– What is the difference between a duck?
– Does the duck looks like a duck?
– Hum... Yes.
– There is no difference, then!
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Anonymous Coward, 30 Jun 2014 @ 5:42pm

Re: Re:
Why should I pay for free to air television?
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Anonymous Coward, 30 Jun 2014 @ 8:47pm

One will notice, on close observation, that the Executive Branch, All divisions, has a habit of taking the easy way out of just about everything. Far be it for them to do some actual research. What the vested interests say is good enough - they're the experts, after all. Besides, thinking, especially critical thinking, hurts our heads.
.
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Anonymous Coward, 30 Jun 2014 @ 9:28pm

It seems to me that SCOTUS operates under the "ends justify the means" philosophy. That is, the Justices assume their conclusions (based on political skew) and contort the law to output the desired conclusion when applied to the facts.

In essence, this means that the Justices act as persuasive litigators rather than as objective judges. This is very unsettling to me.
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Anonymous Coward, 30 Jun 2014 @ 10:16pm

Re: Re:
The only people paying for over-the-air broadcast TV were Aereo customers.
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Anonymous Coward, 30 Jun 2014 @ 10:16pm

Re: Re:
The only people paying for over-the-air broadcast TV were Aereo customers.
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Whatever (profile), 30 Jun 2014 @ 11:18pm

Re: Re: Re:
The issue is that while the programming is free to you when you receive it personally, it's not free for Aereo to receive and redistribute for a fee. The point is very simple, you weren't paying Aereo for an antenna, you were paying them for a content delivery service. The key is the content, without it their service would be just about useless.

Congress in their "wisdom" in 1976 worked out a system for how re-broadcasters and redistributes operate and how they pay for the content they are selling access to. All of Aereo's antenna farm technology can't get around the basic principals that exist in law, passed with majority in the senate, the house, and signed into law by the President of the time.

Aereo would be all good if they just sold you the equipment to take home and do it yourself. Their business model wasn't predicated on making a DVR or an antenna, it was all about delivery... and delivery makes them a defacto cable tv company.

SCOTUS saw through the smoke and wasn't distracted by the mirrors and shiny legal baubles that Aereo tried to use. They saw it for what it was, and told them that they can operate if they operate by the same laws that all other re-broadcasters are held to.
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Whatever (profile), 1 Jul 2014 @ 2:12am

Intereting
I think it's interesting to cist James Grimmelmann, considering he was part of a pretty one sided amicus brief in the case:

Brief of 36 Intellectual Property and Copyright Law Professors as Amicus Curiae, ABC v. Aereo, No. 13-461 (Supreme Court) (with David Post)

I don't doubt for a second that he thinks that the cablevision ruling is dead. Yet, he is likely very wrong, for a whole bunch of different reasons.

Most importantly, Cablevision is paying the appropriate fees as a rebroadcaster. The content is not obtained without license. Aereo likely would have won if they were in fact paying for use of the copyright material as per the 1976 law in regard to cable distributors. Aereo would very likely be able to be back in business pretty much directly if they did so.

So Cablevision isn't really at risk here. Aereo lost because they were acting as a defacto cable company while failing to meet the obligations of same. It doesn't do anything to change the legality of DVRs (even remote DVRs).
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Ninja (profile), 1 Jul 2014 @ 3:36am

Re: Intereting
Well, it worked hard to provide a service while staying within the law and got stomped. There's even the case where the company paid such astonishingly stupid fees and got stomped anyway. Maybe it's not at risk from the point of view of the judges. The companies on the other hand... Would you risk investing in an uncertain climate?

Time will tell. I'm rooting for the MAFIAA in this case. I hope they stab the US in the feet and are held accountable when it results in actual billions lost. Of course I would prefer the US citizens to be able to put a stop in this madness before it reaches such damaging levels but the Government has long stopped caring about them.
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Ninja (profile), 1 Jul 2014 @ 5:13am

Re: Re: Re: Re:
The point is very simple, you weren't paying Aereo for an antenna, you were paying them for a content delivery service.

Content that is delivered for free in the area the antennas are. They are paying for space-shifting of free content. Aereo didn't care if it was free cooking shows, porn marathons or local news, they helped getting that free signal to users in other areas.

Congress in their "wisdom" in 1976 worked out a system

Lobbying is called wisdom now? Also, it's not because something was passed in 1976 and it seemed wise and reasonable at the time that it is now. Not to mention the decision wasn't even based on actual facts and technical details. The decision was based on "it looks like". So if it looks like I'm doing something criminal I should be charged even if it's not?

Aereo would be all good if they just sold you the equipment to take home and do it yourself.

Yeah. "Dear customer, here's your antenna, DVR and 2 thousand kilometers of cables so you can space-shift that content that is broadcasted for free." Sounds awesome.

Their business model wasn't predicated on making a DVR or an antenna, it was all about delivery... and delivery makes them a defacto cable tv company.

It was about the equipment. If they really wanted just delivery they'd set up a single antenna and replicate the same signal to every subscriber. Which would be both smarter and cheaper.

They went through the hassle of setting up individual equipment for every single user and sent that specific, private signal to that single, specific user. Just because the internet is a shared space it does not mean the signal is public or some sort of broadcast. This insanity was seen in Zediva's case.

The saddest part is that the broadcasters themselves couldn't care less with the people that went unserved with this idiocy. If anything, they'll deliver a much worse experience (see online video in general that is provided by the MAFIAA themselves) or simply ignore them.
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Whatever (profile), 1 Jul 2014 @ 5:16am

Re: Re: Intereting
I think that investment will be there, and probably even bigger than you can imagine. There are a lot of potential business models out there that can follow the rules of cable, stay legal, and get really big.

One thing that is clear is this: At some point, someone will have to come along and start putting fiber into every home in the big marketplaces and start to offer enough bandwidth for IPtv and other services to be delivered normally. The csot will be high, but there is certainly some potential here for a third party company to put in the fiber and offer connectivity services back to the current ISPs, phone companies, and so on. There is certainly the potential for a disruptive business model at some point in the future.

The suggestions of "actual billions lost" is pretty laughable, especially here on Techdirt. If there is no way to determine actual losses from piracy (which is sort of directly visible) it's ever so much harder to determine what the beating of SCOTUS butterfly wings will do to in the future (or would have done in the past). Generally it's better to stick to one side of an argument, right?

Oh, and if the MAFIAA (as you call them ) go away, they will be replaced by another similar group with similar goals. it's sort of a natural process.
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Anonymous Coward, 1 Jul 2014 @ 5:44am

A few points...
First it seems like the DVR part was a crucial part of the courts determining of liability simply because it is the fact that the received signal is written to Aereo's server before it is retransmitted to the user. A had the antenna simply passed the stream directly to the user, Aereo would not be retransmitting anything. Second, with regards to the ruling invalidating Cablebision, it seems that they are trying to say that, in much the same way that there is a specific exclusion of copyright infringement in section 230 secondary liability protection, there is a specific exclusion for the live (or near live) retransmission of TV programming written into the Copyright Act that supersedes the logic behind the Cablevision ruling such that other situations and technologies would remain unaffected by this decision. It's still strange though because, there really is no guideline included that would determine how long the delay would need to be for it to be considered time shifted such that it is no longer near live and therefore, completely legal under the Cablevision ruling.
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Anonymous Coward, 1 Jul 2014 @ 6:13am

Re: Re: Re: Re:
So you are saying that the changes to their business model that I originally suggested after the ruling would work. Instead of renting antennas and DVR space, Sell the customers a DVR and antenna the charge them to colocate the set up at their data center. If the user owns the equipment instead of Aereo, then it can't be Aereo doing the retransmission. It's perfectly legal for the users to do these things with their own equipment.
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TestPilotDummy, 1 Jul 2014 @ 6:38am

I'm still goin to stream! WRH
So there.

waaa...

I want to hear it when I am walking round wtf can I say?
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Gwiz (profile), 1 Jul 2014 @ 7:42am

Re: Re: Re: Re:
They saw it for what it was, and told them that they can operate if they operate by the same laws that all other re-broadcasters are held to.

How exactly would Aereo do that when the ruling in WPIX, Inc. v. IVI, Inc. states explicitly that "that Internet retransmissions services did not constitute cable systems under section 111" and are therefore not entitled to a compulsory license?

It seems that Aereo had no choice other than shutting down since SCOTUS left them in a no-mans land - they're "too much" like a cable system to be fair use, yet not enough like a cable system to be afforded a section 111 compulsory license.
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Anonymous Coward, 1 Jul 2014 @ 9:03am

Re: Re: Re: Re: Re:
So it “looks like a duck” but is really a goose? Who’d have thought that what something “looks like” could be subjective? /s
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John Fenderson (profile), 1 Jul 2014 @ 9:32am

Re: Re: Re: Intereting
"someone will have to come along and start putting fiber into every home in the big marketplaces and start to offer enough bandwidth for IPtv and other services to be delivered normally."

And unless something drastically changes, that someone is probably going to be the cable company, which will mean that in the end we will never be rid of the problem.
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Anonymous Coward, 1 Jul 2014 @ 10:02am

Re: Re: Re: Re: Re:
ivi didn't have this ruling to stand on and their case never made it to SCOTUS. FilmOn is preparing right now to test that case scenario. They can't have it both ways. Either they are a cable company and entitled to compulsory licenses or they are not in which case they aren't infringing.
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Anonymous Coward, 1 Jul 2014 @ 10:05am

Re: Re: Re: Re:
Where exactly does it say the customer has to set up the equipment at their home?
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Anonymous Coward, 1 Jul 2014 @ 10:19am

Re: Re: Re: Re: Re:
To be fair, there are reasons why that provision of the Copyright Act exists that made sense in 1976 even if they don't exactly make as much sense today. At the time the primary news source for most Americans (especially with regards for informing the public of emergency information) was local broadcast TV. Allowing the squabbles between local channels and the cable provider that typically occur between the cable companies and cable channels that result in a channel not being carried for a period of time by the cable provider while they argue over the transmission fee paid would be a danger to the part of the public that subscribes to cable TV so there was a need for a mandate that they carry the local channels and at a compulsory license to keep this sort of problem from occurring.
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Ninja (profile), 1 Jul 2014 @ 11:24am

Re: Re: Re: Intereting
This could be happening right now. But Intellectual Property.

There is plenty potential for disruption right now. Potential that does not become reality. Because Intellectual Property.

If there is no way to determine actual losses from piracy (which is sort of directly visible) it's ever so much harder to determine what the beating of SCOTUS butterfly wings will do to in the future (or would have done in the past).

Actually, we've seen with the vhs. Had the MAFIAA won they'd have killed a source of income bigger than ther theaters they were trying to protect. Piracy on the other hand exists since always. Valenti once complained about some Boston Strangler capabilities of blank media and stuff. While I will agree that we can't really quantify those supposed losses caused by piracy we can do it for the vhs part. How much did the MAFIAA earn from vhs, dvds and the likes?

Oh, and if the MAFIAA (as you call them ) go away, they will be replaced by another similar group with similar goals. it's sort of a natural process.

I don't think you know what these goals are. I'm betting you are thinking about "the artists" or something noble. But we know this isn't true. If they are replaced by entities that actually care about the artists then I'm all for it.
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CrushU, 1 Jul 2014 @ 12:13pm

Re: Re: Re: Re:
The issue is that while the programming is free to you when you receive it personally, it's not free for Aereo to receive and redistribute for a fee. The point is very simple, you weren't paying Aereo for an antenna, you were paying them for a content delivery service. The key is the content, without it their service would be just about useless.

You're right, the key is the content. The content is, in fact, free over the air, and anyone could pick it up and re-deliver it.

There is absolutely no reason they should suddenly have to pay for Free Content just because they are delivering it to someone else. And even then, they're not exactly delivering it so much as housing the equipment the consumer uses to receive it.

Arguing that someone should have to pay for free content as soon as they try to sell it means that you are against the selling of public domain movies and books and plays. So you better go try and shut down that local Shakespeare play that's charging for admission.
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Dirkmaster (profile), 1 Jul 2014 @ 1:33pm

I hope this blows up in their faces BIG TIME
I see that FilmOn is already trying to use this decision to get themselves classified as a cable company. I think NetFlix ought to. They got the money to pay the rebroadcasting fees. And THAT would start a SERIOUS cord cutting movement. Hell, the one real hinderance from cord cutting is local sports. If NetFlix could serve that up, Comcast and TW might be in real trouble.
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Zonker, 2 Jul 2014 @ 4:46pm

Re: blown out of the water
I suppose it depends on whether or not Cablevision looks like a cable service. Does an actual cable company "look like cable" under the 1976 Copyright Act?
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