Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Networks Defeat Aereo 6-3 In The Supreme Court

Author: Scarinci Hollenbeck, LLC

Date: July 2, 2014

Key Contacts

Back

The Supreme Court recently made a powerful ruling that has implications for the way that we watch TV, and more importantly, the development of disruptive technologies.

On June 25th, the Court ruled 6-3 in favor of the networks against a TV startup called Aereo, saying that the company will need to pay the networks for the re-broadcasting of their content.

Aereo’s business model worked on the same principle that governs an antenna in your own home. Once you buy the antenna, the signals that it picks up from networks like ABC, CBS, Fox, NBC and PBS are free. Networks don’t charge for over-the-air broadcasts because most of their money comes from advertising anyway – the more people that watch their channels, the more money they make.

However, many people don’t like installing antennae in their homes because the signal is unreliable and most premium channels don’t broadcast for free. Aereo solved the first problem by lining a warehouse with tens of thousands of tiny antennae next to a machine that amps up the signal’s power. Users were allowed to rent one of these antennae for $8 per month, the signals from which were pumped back to them over the Internet, making Aereo one of the cheapest options in television.

Court Ruling

This is all set to change now that the Supreme Court has ruled against Aereo. To their credit, the justices were careful to tread lightly in the face of the potentially massive and unpredictable ramifications such a ruling might have. Liberal justice Stephen Breyer, who led the majority that voted against Aereo, told the startup’s lawyer that he did not understand what a decision either for or against the company would do to other kinds of technologies.

In the end, the majority opined that Aereo was overwhelmingly similar to the cable companies that were specifically targeted by amendments that Congress made to the Copyright Act in 1976. Breyer acknowledged that Aereo has a key difference in that its system remains inert until a subscriber indicates that he or she wants to watch a program, but found that the difference was ultimately not critical.

“This difference means nothing to the subscriber,” he wrote. “It means nothing to the broad­caster. We do not see how this single difference, invisible to subscriber and broadcaster alike, could transform a system that is for all practical purposes – a traditional cable system into a copy shop that provides its patrons with a library card.'”

While Aereo was never a massive company – at least in part due to its limited range of content – the finding would have carried important ramifications either way. Finding for Aereo would have meant that the piece of copyright law that ensured that cable companies had to keep subsidizing networks would have been weakened, or potentially caused them to stop transmitting for free over the air. Find for the broadcasters, however, and there is the potential for damage to citizens’ rights to obtain free content.

In the end, the Supreme Court took an extremely narrow opinion and ruled that Aereo’s business model was illegal only in that it is extremely similar to old CATV systems. While the startup’s users are likely to be disappointed, this is probably the safest ruling the Court could have made for the long-term development of new technologies.

If you are interested to learn how this entire case began, check out Is Aereo Fight Headed to the U.S. Supreme Court?  at www.businesslawnews.com.

If you have any questions about this post or would like to discuss your sports and entertainment matters , please contact one of your Sports and Entertainment attorneys.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What? post image

You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?

Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]

Author: George McGowan

Link to post with title - "You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?"
Why Every Business Should Conduct an Annual Insurance Coverage Review post image

Why Every Business Should Conduct an Annual Insurance Coverage Review

Most New Jersey business owners purchase insurance policies, file them away, and assume they are protected if a claim arises. Without a regular insurance coverage review, many companies discover gaps only after a lawsuit, cyberattack, property loss, or other significant event occurs. An annual insurance coverage review can help businesses identify potential risks, ensure their […]

Author: George McGowan

Link to post with title - "Why Every Business Should Conduct an Annual Insurance Coverage Review"
Demand Letters & Cease and Desist Letters: When to Send One (and When Not To) post image

Demand Letters & Cease and Desist Letters: When to Send One (and When Not To)

Businesses and individuals often encounter situations where another party breaches a contract, fails to pay a debt, or continues harmful conduct. In many such disputes, a precisely drafted demand letter or cease-and-desist letter serves as a powerful legal tool. It can frequently resolve the dispute and avoid litigation. While demand or cease-and-desist letters can resolve […]

Author: George McGowan

Link to post with title - "Demand Letters & Cease and Desist Letters: When to Send One (and When Not To)"
How to Effectively Use Contracts to Manage Risk post image

How to Effectively Use Contracts to Manage Risk

Key provisions in your contracts, including those relating to indemnification, insurance, and defense, are essential to contract risk management. While sometimes considered “boilerplate,” these provisions play a pivotal role when determining which party is responsible for certain costs and liabilities. They must always be negotiated and drafted carefully. Indemnification Clauses Businesses should never overlook the […]

Author: George McGowan

Link to post with title - "How to Effectively Use Contracts to Manage Risk"
Understanding Portability for Estate and Gift Tax post image

Understanding Portability for Estate and Gift Tax

Portability of estate and gift tax enables a surviving spouse to inherit any unused portion of their deceased spouse’s federal estate and gift tax exemption. So, if one spouse doesn’t utilize their full exemption, the surviving spouse can effectively double their exemption amount with regard to estate tax liability. For married couples, portability offers a […]

Author: Marc J. Comer

Link to post with title - "Understanding Portability for Estate and Gift Tax"
Pet Trusts in New Jersey and New York: A Practical Estate Planning Tool post image

Pet Trusts in New Jersey and New York: A Practical Estate Planning Tool

For many of us, pets are more than companions—they are members of the family. Yet they are often overlooked or inadequately provided for when it comes to estate planning. A pet trust offers a legally enforceable way to ensure that your animal continues to receive proper care if you become incapacitated or pass away. As […]

Author: Marc J. Comer

Link to post with title - "Pet Trusts in New Jersey and New York: A Practical Estate Planning Tool"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.
“If you would like to submit a file, please email it directly to info@sh-law.com.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!