Understanding Aereo, Part 4 (Analysis and Conclusions)

Posted By on Jan 28, 2014 | 0 comments

In part 1 of this series, we examined the litigation history and legal issues addressed in the Cablevision RS-DVR case, which underpins the Aereo case.  In part 2, we examined the litigation history and issues considered in Aereo, leading up to the Supreme Court’s acceptance of the case for review.  In part 3, we reviewed some of the more significant alternative views of the issues.

Here, in the final installment of the series, we try to bring it all together to make sense of it.

But first, I’ll repeat my previous disclosure one more time: I’m not an entirely disinterested party in this matter, inasmuch as I spent many years at Cablevision, and worked directly on Cablevision’s RS-DVR.

I won’t prognosticate here as to what will happen.  Personally, I lack sufficient faith in in our judicial system to think it possible to do such with confidence.  Too often, courts have constructed contrivances to reach results that, to my view, cannot be rationally justified.  But I still think it worthwhile to discuss what should happen.

What Should Happen?

In the end, I conclude that Aereo should be deemed to be compliant with the Copyright Act.

I am no fan of retransmission consent.  I believe that with the rise of significant MVPD (Multichannel Video Programming Distributor) competition, the retransmission consent regime has created a marketplace far more imbalanced than it should be, to the great detriment of consumers.  But I don’t view a ruling in the Aereo case as an appropriate avenue to address that problem, and I don’t conclude that Aereo should be deemed compliant because it might be capable of playing a role in better balancing the marketplace.

Rather, I conclude that Aereo should be deemed compliant because I conclude that to do otherwise would require the courts to do one of two things, both untenable.  Either:

  1. unjustifiably ignore both the Copyright Act’s clear specification, and Congress’s clear intent, that private performances be exempted from those rights reserved exclusively to copyright holders—as well as Congress’s clear intent to leave individuals with a fair use privilege to make copies of programs for the purpose of timeshifting, by virtue of leaving the Betamax ruling intact for more than thirty years (while, nonetheless, amending the Copyright Act multiple times), or
  2. create a special exception to prohibit what Aereo does, thus fabricating an arbitrary, judicially-imposed distinction in the law.

I don’t disagree with those who oppose Aereo when they assert that Congress’s intent in 1976 would have been to include the likes of Aereo with cable systems required to obtain a license for retransmission, or that Congress attempted to do its best to foreclose avoidance of such obligations by the development of new technologies.  But I conclude that Congress, nonetheless, failed to create a statute that was successful in foreclosing this particular development.

The error is one that Congress could easily rectify, assuming it still shares the same goal Congress held in 1976.  The courts, on the other hand, cannot easily rectify the error, and it is not their place to do so.

Let’s take a look at why an alternative conclusion would be problematic.


In their petition for certorari in the Aereo case, the programmers asserted that:

The Second Circuit…managed to reach, in two steps, a result it could not reasonably have reached in one. Only by looking at the case through the distorting lens of Cablevision and its conflation of performance and transmission could the Second Circuit give a green light to Aereo’s business model. Unsurprisingly, the first two courts to consider the question unconstrained by Cablevision had little trouble concluding that a service essentially identical to Aereo was engaged in unauthorized public performance and must be immediately enjoined, resulting in a nationwide injunction, except for in the Second Circuit.

In fact, the problem is precisely the opposite.  The courts that heard the FilmOn X cases, unconstrained by Cablevision, managed to reach conclusions that they could not have reasonably reached, had they properly considered the unavoidable implications brought to the forefront only by a case like Cablevision.  If upheld, their holdings would have sweeping implications for the rights of individuals to use timeshifting and placeshifting technologies.  (And likewise, sweeping implications for settled law on authorship of actions.)

The basic problem is twofold.  First, to find that Aereo, rather than its users, were engaged in unauthorized public performance, would require ignoring or reversing long-standing precedent assigning authorship for actions based on volition.  When a copy shop makes photocopiers available for customers to use for self-service copying, it is the customer, not the copy shop, that supplies the volition for the act of copying, and as such they are the authors of that act.

Only Cablevision seriously examined this issue.  The Aereo court briefly addressed the issue, in the context of applying the Cablevision precedent.  The two district courts in the FilmOn X cases ignored this issue altogether, focusing exclusively on interpretation of the transmit clause.  Denny Chin, in his district court holding in Cablevision, set aside the issue of volition for recording and playing back specific programs, focusing instead on the Cablevision’s volition in designing the system—an error the Second Circuit correctly reversed.  Chin simply ignored the issue in both of his Aereo dissents, like the FilmOn X courts, focusing exclusively on interpreting the transmit clause.

Secondly, the Second Circuit correctly concluded that to find the playback transmissions of the RS-DVR of Cablevision to be public performances would eviscerate the notion that there is anything that constitutes a private performance.  To interpret the transmit clause to reference all separate performances of a single underlying work, or all separate performances of separate recordings of a single prior broadcast, inevitably requires the conclusion that individuals playing back programs conventionally recorded within their home are engaged in public performances, simply because others also recorded and played back that same program.  This is an untenable result.

Cablevision (the company) also correctly observed in their white paper that such an interpretation would inevitably require the conclusion that streaming personal copies of media from cloud storage systems, for personal consumption, actually constitute public performances, simply because others also store and retrieve copies of the same underlying work—another untenable result.

If one attempts to alternatively view the RS-DVR as simply a device or process used to make transmissions available to the public—and by doing so, attempt to avoid the above consequences by ignoring the underlying details of the system—equally untenable results arise, nonetheless.

Although Denny Chin asserted in his district court holding in Cablevision that RS-DVR was distinguishable from conventional set-top DVRs, the two distinctions he asserts are factually erroneous, and in reality, there is no principled way to distinguish the operator’s role in the ongoing operation of the two systems.  The unavoidable consequence of concluding that RS-DVR runs afoul of the Copyright Act is to conclude that set-top DVRs do the same.

If recording in RS-DVR is an infringing act of the operator, so too is recording in an operator-owned set-top DVR.  And if individual playback constitutes a public performance with RS-DVR, playback is also a public performance for some or all set-top DVRs.  At a minimum, DVRs with integrated Slingbox-equivalent functionality (such as Dish’s Hopper DVR, or the Tivo Roamio offered by some cable operators) would perform publicly when users play back their recordings to locations outside of the home.  And depending on how the term place is interpreted in the Copyright Act’s definition of transmit, multi-room DVRs might also perform publicly when used to play back recordings in additional rooms, or all DVRs might perform publicly when they merely transmit playbacks to connected televisions.

The Tivo Roamio is a particularly instructive example.  As a device made available to consumers both for purchase at retail, and for rent as operator-owned set-top DVRs, the classification of operator-owned equipment as a device or process under the transmit clause would create the absurd result that the same device, used in the same way, would transmit private performances when owned by the user, but public performances when owned by the operator and merely rented by the user.

There simply is no way to reconcile the conclusion that RS-DVR infringes the Copyright Act with a conclusion that set-top DVR does not, without introducing an arbitrary exception.  The creation of any such exception is not the dominion of courts, but rather, is properly left to Congress.


In the end, the system of Aereo differs from the RS-DVR of Cablevision in just two respects: the unlicensed capture of over-the-air broadcast signals to disk for storage as recordings vs. recording of programs in an otherwise licensed cable system, and the playback of recorded programs to locations outside of the home.  Beyond those two, it is an RS-DVR system as considered in Cablevision.

As it turns out, those two differences are of no legal significance.

At this point, it should be apparent that the latter difference is a non-issue. It is not by accident that not a single court hearing the Aereo or FilmOn X cases spent time examining the issue of playback outside of the home—it does not change the legal considerations.  While there had been no precedents whatsoever relating to Slingbox functionality (until very recent litigation against Dish, where integrated Slingbox functionality of the Hopper DVR was held non-infringing), it should be very clear that an individual’s transmission of video to themselves, for their own personal viewing, does not constitute a public performance, and therefore does not infringe any copyright, regardless of the location received.  Furthermore, while the Cablevision holding did hinge on the fact that only the user could receive a playback of the recorded programs, it certainly didn’t hinge on the location that playback was received.

That leaves just the question of whether Aereo’s unlicensed capture of over-the-air signals for recording is substantively different from Cablevision’s recording of signals in an otherwise licensed system.

If you look at how the courts have handled these two cases, it is clear that this is of no significance.  First, while there almost certainly was an argument that Cablevision’s transmission of signals to its disk storage fell within the scope of its license, this wasn’t a line of argument that was pursued by the courts.  Rather, the Cablevision court treated the parallel transmission path used to feed the recording servers as unlicensed, as demonstrated by the analysis of whether temporary buffers used prior to recording constituted a copyright infringement, in themselves.  If the transmission path to the disks were licensed, any buffering in that path would be a non-issue.

Accordingly, the issue of Aereo being unlicensed for retransmission is simply not relevant.  In fact, even if Aereo were using a single, shared antenna, rather than many individually-assigned antennas, Cablevision would still be applicable.

But what if we attempt again to ignore the underlying details of the Aereo system, and view it simply as a device or process under the transmit clause?

Here, the fact that Aereo does use distinct antennas for each user makes it impossible to reconcile a conclusion that Aereo infringes with the fundamental right of individuals to receive over-the-air broadcast signals, under the very same Copyright Act.  User’s have an undisputed and completely intentional right under the Copyright Act to place an antenna for private reception of  broadcast signals.  Aereo does, in fact, rent individual antennas to users.  If transmissions in the Aereo system are deemed public, it implies that there is a distinction for copyright purposes between an owned antenna and a rented antenna.  If a user purchases an antenna at Radio Shack, their reception of broadcast signals is legal.  But if a user rents an antenna from Radio Shack, the same reception is rendered infringing?  And what’s more, it’s an infringing act attributable to Radio Shack?  This result is clearly untenable.

The only reasonable and consistent conclusion—the only conclusion that does not require the fabrication of an arbitrary exception, or produce untenable consequences—is that the transmissions in the Aereo system are private.  Equipment rental, even when offered in the form of a service, fundamentally differs from the retransmission services of cable systems, as anticipated by the Copyright Act.  And no matter how much any of us believe that Congress in 1976 would have intended to bring a provider like Aereo, had they anticipated such, under the licensing regime created, no court can remedy the limitations imposed by the actual language adopted in the Copyright Act.

Accordingly, the Supreme Court should find that Aereo does not infringe.

Congress should then respond by amending the Copyright Act to bring Aereo, and others like it, into the same licensing regime as other MVPDs.  At the same time, Congress should take the opportunity to reform the current regime of retransmission consent (as well as the closely-related regime for negotiating carriage of non-broadcast networks), in order to create a more balanced marketplace that serves consumers much better than the current one.

For more Aereo-related articles, including coverage of business issues related to Aereo, and implementation challenges that Aereo faces, go to our Understanding Aereo page.