Supreme Court Sides with Broadcast Nets in Aereo Dispute

WASHINGTON, D.C.: The Supreme Court has sided with the major broadcast networks in their copyright infringement case against Aereo, which has called the decision a "massive setback for the American consumer."

CBS, ABC, NBC and FOX have maintained that Aereo violates copyright law because it delivers their broadcast signals without paying a licensing fee. The Barry Diller-backed platform is available in a number of U.S. cities, including New York, and charges $8 a month for its services. Aereo subscribers can record and live stream a range of over-the-air channels on numerous devices via a cloud-based DVR.

The Supreme Court ruled 6 to 3 in favor of the networks. They maintained that Aereo functioned similarly to cable-TV platforms and as such should be subject to the same copyright regulations.

Chet Kanojia, Aereo's CEO and founder, said in a statement: “Today’s decision by the United States Supreme Court is a massive setback for the American consumer. 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.  It is troubling that the Court states in its decision that, ‘to the extent commercial actors or other interested entities may be concerned with the relationship between the development and use of such technologies and the Copyright Act, they are of course free to seek action from Congress.’ That begs the question: Are we moving towards a permission-based system for technology innovation? Consumer access to free-to-air broadcast television is an essential part of our country’s fabric. Using an antenna to access free-to-air broadcast television is still meaningful for more than 60 million Americans across the United States.  And when new technology enables consumers to use a smarter, easier to use antenna, consumers and the marketplace win. Free-to-air broadcast television should not be available only to those who can afford to pay for the cable or satellite bundle. Justice Scalia’s dissent gets its right. He calls out the majority’s opinion as 'built on the shakiest of foundations.' Justice Scalia goes on to say that 'The Court vows that its ruling will not affect cloud-storage providers and cable television systems… but it cannot deliver on that promise given the imprecision of its results-driven rule.' We are disappointed in the outcome, but our work is not done. We will continue to fight for our consumers and fight to create innovative technologies that have a meaningful and positive impact on our world.”

In an interview with Katie Couric for Yahoo News before the Supreme Court ruling came down, Kanojia said it would be a "tragic outcome" if it lost the case. "I think we'll figure out something, or— or if not, if there's no viable business, then we'll probably go out of business, or— I do know that the technology we've built is tremendously valuable to a lot of people."

Leslie Moonves, president and CEO of CBS Corporation, spoke to Bloomberg Television's Trish Regan about the ruling today, stating: "We are very pleased. Justice was served. We expected to win, but it certainly feels good to win as decisively as we did." He want on to talk about the importance of retrans fees. "We'll receive $2 billion by 2020 in retransmission fees. And all that's important here is that broadcasters and cable content companies and everyone who's involved with the content producing business gets paid appropriately for their content. And that somebody can't come and take that content, charge for it, and not pay us back for that content. So it's a very good day for our future."

Asked if legislation needs to change in light of technological developments, Moonves said: "The truth of the matter is Aereo tried to present a case that we were  against cloud, our content being in the cloud. Nothing could be further from the truth. We have changed drastically how we're delivering content to our public. It's now going through satellite, it's going through telephone companies, it's going online through companies like Netflix. So we are moving along. No company like CBS would be as successful as it is without being technologically advanced and technologically savvy. What this was, what Aereo was doing, was not about technology, it was about theft. Yes, it was a new technology and there'll be others, but right now because of the Supreme Court ruling, people will have to pay for our content.  And you will be able to get it in a variety of different ways, and that’s what is exciting for us."