How will the US Supreme Courtverdict against Aereo impactstreaming and

Thakur

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The US Supreme Court has ruled against the
Internet TV service Aereo, saying that the
service breaches the broadcasters copyright,
deeming it to be similar to a cable company
that is streaming content without a license.
Founded by Indian born Chaitanya “Chet”
Kanojia (a graduate of NIT, Bhopal), Aereo
allows individual customers to receive
broadcast shows via a small, individual digital
antenna (leased by them, hosted by Aereo),
store them on the cloud (essentially a Digital
Video Recorder function), and then stream
them to devices such as PC’s, Apple TV,
Chromecast, Roku.
How it works
A server tunes an antenna, which is dedicated
to the use of one subscriber alone, to the
broadcast carrying the selected show. A
transcoder translates the signals received by
the antenna into data that can be transmitted
over the Internet. A server saves the data in a
subscriber-specific folder on Aereo’s hard
drive and begins streaming the show to the
subscriber’s screen once several seconds of
programming have been saved. The streaming
continues, a few seconds behind the over-the-
air broadcast, until the subscriber has received
the entire show. Each subscriber has a
personal copy of the show that is streamed,
received via a personal antenna.
Customers pay for storage of the content, and
not for the channels, and Aereo, since it picks
up broadcasts off the air, doesn’t have to pay
channels. Customers essentially leased an
individual antenna, which makes this different
from an Internet streaming service. GigaOm
has a fairly detailed overview of how Aereo
works, here.
Aereo argued that it’s a home antenna plus
DVR, while the broadcasters, which filed this
case, argued that it is a cable company that
isn’t paying them, and violating their
copyright. Under the US Cable Television
Consumer Protection and Competition Act
(1992) , cable companies in the US have to pay
broadcasters to carry their channel.
It’s worth noting that in India, the situation is
the opposite, with the TRAI institutionalizing
carriage fees, wherein cable companies can
charge broadcasters to carry the channel. In
India, broadcasters, which are forced to pay
cable companies, would probably welcome a
service like Aereo.
Also, channels aren’t really being “broadcast”
in India, it’s more of a multi-cast: terrestrial
TV broadcasting is the mandate of Prasar
Bharati, and the broadcast ecosystem is built
on top of a fairly elaborate cable network, as
well as via DTH. So imagine an antenna that
could pick up a DTH signal without you paying
for it.
A summary of the 35 page Judgment (download
it here):
1. The Copyright infringement verdict: The
Supreme Court of the US has held that Aereo
was infringing the broadcasters copyright -
their right to “perform” their copyrighted
works “publicly.” The US Copyright Act “was
amended to clarify that to “perform” an
audiovisual work means “to show its images in
any sequence or to make the sounds
accompanying it audible,” and hence covers
retransmission. This is why it was deemed that
Aereo isn’t just an equipment provider (or an
intermediary). The court has recognized that
Aereo is different from a cable provider
because of the users involvement in the
operation of the equipment, but deemed that
“this sole technological difference between
Aereo and traditional cable companies does not
make a critical difference here.”
“Viewed in terms of Congress’ regulatory
objectives, these behind-the-scenes
technological differences do not distinguish
Aereo’s system from cable systems, which do
perform publicly. Congress would as much
have intended to protect a copyright holder
from the unlicensed activities of Aereo as from
those of cable companies.”
2. The dissent: The verdict was passed with a
6-3 vote, and the dissenting judges said that
the fact that the consumer and not Aereo
operated the antenna, was a necessary
difference, and “Aereo should not be directly
liable whenever its patrons use its equipment
to “transmit” copyrighted television programs
to their screens.” Justice Scalia deemed that
Aereo itself has not engaged in infringing
activity”, and rejects the “guilt by resemblance”
notion, which Fred Wilson has referred to as
the “‘if it walks like a duck and quacks like a
duck, it must be a duck’ argument.
Implications
1. Cloud storage services liable for
copyright violation? This judgment could
impact all forms of cloud storage: effectively,
in the Aereo case, a service which allowed you
to make a copy of a broadcast and retransmit
it to your device was held liable for allowing
you to do so. Thus, intermediary liability goes
out the window, and if you share music files
via Dropbox, it can be argued, with this as
precedence, that Dropbox is liable for your act
of copyright infringement.
It may perhaps be too much of a stretch, but
on the Internet, every act of information
transmission involves copying and then
erasing. In his dissent, Justice Scalia has
pointed out as much:
‘Internet-service providers are a prime
example. When one user sends data to another,
the provider’s equipment facilitates the
transfer automatically. Does that mean that the
provider is directly liable when
the transmission happens to result in the
“reproduction, of a copyrighted work? It does
not. The provider’s system is “totally
indifferent to the material’s content,” whereas
courts require “some aspect of volition”.’
Justice Scalia contrasts this with Netflix, which
chooses which content is available to
subscribers, and that is an act of volition,
saying that Aereo doesn’t do this.
Scalia also points out that the impact on cloud
storage providers cannot be ruled out, despite
the Courts assurances: “The Court vows that
its ruling will not affect cloud-storage
providers and cable television systems, see
ante, at 16–17, but it cannot deliver on that
promise given the imprecision of its result-
driven rule. Indeed, the difficulties inherent in
the Court’s makeshift approach will become
apparent in this very case.
2. Are streaming tools legal? Are DVR’s
legal? What of services like Plex, XBMC, the
PS3 Media Server, VLC (which has a media
server), which essentially allow you to stream
content from one device (like a mobile phone
or a laptop) to the other (an Android box,
Chromecast, PS3), over protocols such as
UPNP and DLNA? All these services first buffer
content and then allow you to stream it. If a
user streaming content via these apps is
violating copyright, can the services be held
liable too, for buffering content? Under the US
Copyright Act, wouldn’t these be deemed as
“performances” as well?
Scalia’s dissent points towards the issue with
DVR’s as well, saying that “One would cover
any automated service that captures and stores
live television broadcasts at a user’s direction.
That can’t be right, since it is exactly what
remote storage digital video recorders (RS–
DVRs) do no.”
Note that while the judgment initially appears
to cover live broadcast, it doesn’t necessarily
deem that only simultaneous delivery infringes
copyright.
3. Chilling Effect on innovation: Justice
Scalia points out that the US came within one
vote of “declaring the VCR contraband 30 years
ago”…”The dissent in that case was driven in
part by the plaintiffs’ prediction that VCR
technology would wreak all manner of havoc in
the television and movie industries”…”The
Networks make similarly dire predictions about
Aereo. We are told that nothing less than “the
very existence of broadcast television as we
know it” is at stake. Aereo and its amici
dispute those forecasts and make a few of their
own, suggesting that a decision in the
Networks’ favor will stifle technological
innovation and imperil billions of dollars of
investments in cloud-storage services.”
This judgment might lead to further scrutiny of
whether existing and potential technological
innovations break the law, and this will stifle
innovation. If the intermediary liability rule
did not exist, YouTube wouldn’t, and neither
would Dropbox. DVR’s would be illegal, as
would streaming services How will the US Supreme Court verdict against Aereo impact streaming and cloud services? - MediaNama
 
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