Mar 3, 2014

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US Government Sides With Broadcasters on Aereo, Contradicting Itself in the Process

US Government Sides With Broadcasters on Aereo, Contradicting Itself in the Process

The U.S. Solicitor General’s office has weighed in with an amicus brief supporting broadcasters in their case against Aereo before the Supreme Court.

The headline summary of the SG’s view (note that whenever we refer to the Solicitor General, here, we mean the office, as the SG, himself, was recused from this case) was that they effectively adopted, wholesale, the view that Cablevision has promoted in defending its own RS-DVR precedent: that Aereo infringes the Copyright Act because it lacks a license to retransmit signals, in the first place, while other cloud computing solutions, including Cablevision’s RS-DVR, do not infringe:

The Copyright Act strikes a balance between the public’s interest in access to creative works and authors’ right to be compensated for the exploitation of the fruits of their labors. Under the 1976 Act, a company that retransmits copyrighted broadcast television programs must obtain a license, though qualifying retransmission services may avail themselves of the detailed statutory licensing schemes establish by Congress. Respondent’s unauthorized Internet retransmissions violate these statutory requirements and infringe petitioners’ public-performance rights under 17 U.S.C. 106(4). But a decision rejecting respondent’s infringing business model and reversing the judgment below need not call into question the legitimacy of innovative technologies that allow consumers to use the Internet to store, hear, and view their own lawfully acquired copies of copyrighted works.

The essence of the SG’s argument is that:

  • Aereo is equivalent to the cable transmissions that Congress was specifically looking to bring within the 1976 Copyright Act.

Like the cable companies that the 1976 Congress sought to bring within the Copyright Act’s purview, respondent is legally responsible for transmitting the copyrighted works its servers send to subscribers.

  • Aereo’s system can not be considered an equipment rental

…while each antenna functions independently in receiving broadcast signals, respondent’s centralized server and other shared equipment are integral to the process by which content is transmitted to the subscriber.

  • Aereo, and not the user, is therefore the transmitter.

Respondent thus operates an integrated system, substantially dependent on physical equipment that is used in common by respondent’s subscribers, through which any “paying stranger” … may access respondent’s antenna farms and receive a transmission of copyrighted television programs. Respondent therefore “transmits” performances of copyrighted works in a way that mere equipment suppliers clearly do not.

The SG maintains, however, that finding Aereo to infringe does not require that other cloud computing solutions also infringe:

Contrary to respondent’s suggestion…reversal of the decision below need not call into doubt the general legality of cloud technologies and services. One function of such services is to offer consumers more numerous and convenient means of playing back copies that the consumers have already lawfully acquired. Respondent’s service performs a wholly different function. That service provides a means by which consumers can gain access to copyrighted content in the first instance—the same service that cable companies have traditionally provided.  There is consequently no sound reason to suppose that a decision holding respondent liable for copyright infringement will threaten the use of different technologies that assist consumers in hearing or viewing their own lawfully-owned copies.

And the SG argues that Cablevision’s RS-DVR, in particular, does not infringe:

The Second Circuit’s reasoning in Cablevision, which treated the performance created by the act of transmission as the only relevant performance for purposes of the infringement analysis, reflected an erroneous interpretation of the Transmit Clause. … It does not follow, however, that the court in Cablevision reached the wrong result.

In Cablevision, the cable company already possessed the necessary licenses to transmit copyrighted television programs to its subscribers. The RS-DVR system simply allowed subscribers to engage in “time shifting” by recording, for later viewing, programs they received through their authorized cable subscriptions. … The court in Cablevision reasonably concluded that the copies so created were made by the subscribers rather than by the cable company itself.

Commentary

Personally, I believe that neither Aereo’s system nor Cablevision’s system infringes.  Rather, I believe that these systems are indistinguishable from other equipment rentals, except by the adoption of arbitrary distinctions that have no basis in the actual statute, and which therefore, would by wholly judicial fabrications.  Creating such arbitrary distinctions is not the proper role of the courts, even if the courts believe that such would achieve what Congress’s view would have been, when they adopted the statute.  (For more detail on this, see Understanding Aereo, Part 4.)

But with respect to the SG’s brief, what’s most significant is that their argument is internally inconsistent, contradicting itself.

The critical step in the SG’s argument that Aereo infringes is to disqualify Aereo’s system as an equipment rental system.  To achieve this, the SG cites “respondent’s centralized server and other shared equipment” and also the dynamic nature of resource allocation in Aereo’s system:

Even if respondent’s antennas were viewed in isolation from the other centralized equipment used in the transmitting process, any analogy to purveyors of home antennas would be inapt. It is true that, at any moment in time, each subscriber who is logged into the system is assigned a discrete antenna. That unique assignment occurs, however, only after the subscriber has logged in and has requested a transmission of a particular copyrighted work. … And when that subscriber is no longer connected to respondent’s system (or discontinues her subscription), respondent’s computerized server may reassign the same antenna to a different subscriber—that is, a different paying stranger. … The monthly fee that respondent’s subscribers pay thus purchases a right of access to a shared pool of antennas and the content they make available, not (as in respondent’s hilltop hypothetical …) to a discrete antenna dedicated solely to a single subscriber’s use.

But neither of these observations distinguish Aereo’s system from Cablevision’s RS-DVR, or any cloud computing digital storage locker service.  On the contrary, each of these services also allocate resources to users dynamically (in these cases, the resource being storage space), reallocating that storage space among different users, as those users store and delete different content.  And each of these services also rely on “centralized server[s] and other shared equipment” which are “integral to the process by which content is transmitted.”

Furthermore, it is the same transmit clause that each of these systems must be reconciled with, even where the service doesn’t have a functional equivalence or resemblance to cable systems, because nothing in the transmit clause is specific to cable systems in particular.

Barring the identification of an actual, relevant distinction between the systems, the only reasonable conclusion is that either all qualify as tantamount to equipment rental systems, or none do.

The SG fails to identify any such actual distinction.  And yet the SG brief argues that Cablevision’s RS-DVR and other cloud computing systems are tantamount to equipment rentals, such that the end-user is properly deemed to be the actor in making copies and transmitting, while at the same time arguing that Aereo’s system is disqualified from such treatment.

Quite simply, this dichotomy is indefensible.

If the SG’s reasoning with respect to Aereo is correct, then Cablevision’s RS-DVR and many cloud computing systems must also run afoul of the transmit clause.  If instead the SG’s reasoning with respect to Cablevision’s RS-DVR and other cloud computing systems is correct, then Aereo must also comply with the transmit clause.  The SG’s brief fails to present any rational basis for any other conclusion.

For further discussion of Solicitor General’s brief, see Aereo and the Solicitor General’s Strange Conception of Rentals.  Or for complete coverage of Aereo, see our Understanding Aereo page.

 

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