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Aereo Meets ABC, Broadcasters in Supreme Court Battle Over TV and the Cloud

Today, the U.S. Supreme Court will hear arguments in the case of ABC v. Aereo – a dispute which has been billed as likely to shape the future of television.  As earlier coverage here at DisCo has explained, the case also has the potential to alter the future of the Internet, and specifically, cloud-based services.

This copyright case revolves around the New York-based start-up Aereo, who provides arrays of Internet-attached antennae to subscribers, who each use an individually-assigned antenna to access their free local broadcasts, online.  Major U.S. broadcasters don’t like this, since cable services now pay them handsomely in order to carry those broadcast signals to cable subscribers.  Broadcasters have argued that Aereo infringes copyright by enabling its users to access their local broadcasts online in this manner.

The seriousness of the threat Aereo that poses to broadcasters depends on the audience.  Additional eyeballs on broadcasts should increase the value of the advertising space therein, and investors have been assured that Aereo causes no “financial handicap.”  Broadcasters told the Supreme Court, however, that Aereo represents a “direct assault” that “threatens the very existence of broadcast television as we know it.”  Just ahead of today’s argument, Aereo launched the website, which provides information on the case and lays out Aereo’s own arguments.

The interest in ABC v. Aereo extends well beyond its disruptive potential for broadcasting. See [1], [2], [3], [4].  What broadcasters don’t like about Aereo – that it enables numerous users to access content that they’re entitled to access, but over the Internet – is also one of the fundamental benefits of cloud-based services.  In other words, if the Supreme Court holds that Aereo is infringing for the reasons broadcasters say, then cloud computing – the innovation of remotely providing Internet users access to content they’re entitled to have – may be in jeopardy.  Because both Aereo and cloud providers enable Internet users to transmit their content to themselves, cloud services may wind up as collateral damage in the legal war on Aereo.  While broadcasters (and even the U.S. Government) have gone to considerable lengths arguing that they bear no ill will toward cloud services, the case isn’t a popularity contest for broadcasters, or Aereo, or cloud computing.  The Supreme Court is being asked to answer a specific question: when is an Internet transmission a “public performance”?  With revenue growth in cloud computing services now projected to exceed $20 billion per year, and cloud investments expected to create hundreds of thousands of new jobs and hundreds of billions in cost savings, a significant amount of economic growth may turn on the answer to that question.

Intellectual Property

The Internet enables the free exchange of ideas and content that, in turn, promote creativity, commerce, and innovation. However, a balanced approach to copyright, trademarks, and patents is critical to this creative and entrepreneurial spirit the Internet has fostered. Consequently, it is our belief that the intellectual property system should encourage innovation, while not impeding new business models and open-source developments.