Ted Johnson, Senior Editor, Variety.com
The Supreme Court delivered a big blow to Aereo on Wednesday, ruling that its streams of broadcast TV channels violated copyright law.
The justices ruled 6-3 that because Aereo functioned essentially like a cable system, its streams of broadcast signals violated the public performance clause of the Copyright Act.
“Aereo claims that because it transmits from user-specific copies, using individually assigned antennas, and because each transmission is available only to one subscriber, it does not transmit a performance ‘to the public,’” Justice Stephen Breyer wrote in the majority opinion. “Viewed in terms of Congress’ regulatory objectives, these behind-the-scenes technological differences do not distinguish Aereo’s systems from cable systems, which do perform publicly. Congress would as much have intended to protect a copyright holder form unlicensed activities of Aereo as those of cable companies.”
The justices also ruled that their ruling as limited, and they did not believe that it should discourage “the emergence or use of different kinds of technologies.”
Justice Antonin Scalia dissented, and was joined by Justice Clarence Thomas and Justice Samuel Alito.
Scalia wrote that Aereo “does not perform ‘publicly’ at all.”
“Today’s decision is a victory for consumers,” said Paul Clement, attorney representing ABC and other broadcasters. “The Court has sent a clear message that it will uphold the letter and spirit of the law just as Congress intended.”
The justices’ ruling casts doubt on the future of the start up and is a major victory for broadcasters, who had argued that Aereo threatened their revenue stream of retransmission fees they collect from pay TV providers.
The ruling ended a two-year dispute over the legality of Aereo, which started in New York and sought to roll out in markets across the country. The company’s founder, Chet Kanojia, was adamant that at stake was not only its own technology, but future innovation in cloud computing.
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Barry Diller, Aereo’s chief investor, says the company “is over” in light of the Supreme Court’s ruling against it.
“We did try, but it’s over now,” he told CNBC.