Aereo Briefs: Cablevision’s Compelling Defense of Cablevision

Posted By on Mar 18, 2014 | 0 comments

Among the briefs filed in support of the broadcasters in the Aereo case was a brief from Cablevision.  Cablevision has a stake in the Aereo case, in that the Second Circuit’s ruling in Aereo relied critically on its ruling in the Cablevision RS-DVR case that preceded it.  A ruling against Aereo that imperiled RS-DVR, more generally, would be of great concern for Cablevision, which has been providing RS-DVR-based services to customers since 2011.

Not surprisingly, then, Cablevision’s brief comes to the defense of the Second Circuit’s holding in Cablevision, even while ultimately arguing that Aereo should be found infringing.

Cablevision’s argument is essentially the same argument they put forward in their white paper on Aereo.  When I read it this second time around, however, I was struck by how compelling their defense of the ruling in Cablevision actually is.  Perhaps it was something about the organizational differences of the brief vs. the white paper, or perhaps it was looking at it again after nearly two months of debating some ardently anti-Aereo commentators, or perhaps it was just the stark contrast of Cablevision’s compelling rebuttal of each specific criticism of Cablevision, in comparison to what has effectively been mere hand-waving in other arguments presented to this point.

But whatever it was, the result is truly compelling.  Anybody who is seriously interested by this case should take the time to read Cablevision’s brief.  It’s first three sections present a masterful argument.  (Alas, the last section—in which they attempt to distinguish Aereo—lapses into the same kind of hand-waving that plagues virtually all others.)

Since many won’t be prepared to take the time to read the full brief, we provide a summarized and abridged (but be warned, still longform) version of their argument here.

Before doing so, I’ll reiterate the disclaimer I have included with several of my articles explaining the Aereo case: I am not an entirely disinterested observer, inasmuch as I spent many years at Cablevision, and worked directly on Cablevision’s RS-DVR.  Note, however, that I had no involvement in the development of Cablevision’s arguments respecting Aereo.

We must start by recalling the transmit clause of the 1976 Copyright Act since this is the key portion of the Copyright Act at issue:

To perform or display a work ‘‘publicly’’ means—

  1. to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or
  2. to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.

The Cablevision argument begins with a careful analysis of what it means to transmit “to the public” generally, and particularly in the context of individualized transmissions.  (Note, all legal citations are omitted in the excerpts below.)

…in the so-called Transmit Clause, Congress provided that “[t]o perform…a work ‘publicly’ means,” among other things, “to transmit…a performance…of the work…to the public, …whether the members of the public capable of receiving the performance…receive it in the same place or in separate places and at the same time or at different times.”

The Transmit Clause did more than bring cable systems within the scope of the public performance right. It also addressed the Act’s applicability to individualized transmission systems […] by clarifying that a transmission of a performance may be “to the public” “whether the members of the public capable of receiving the performance … receive it in the same place or in separate places and at the same time or at different times.” […]

The “separate places/different times” language clearly assumes that some individualized transmission systems render performances “to the public” despite their individualized nature—otherwise the clause would be superfluous. As a matter of simple grammar, however, the clause does not say that a transmission of a performance is “to the public” merely because it is received at separate places or different times. The clause states that, if a transmission of a performance is otherwise “to the public,” it does not cease to be so merely because it is actually received on an individualized basis. The key question remains, therefore, whether the transmission of the performance is “to the public.” […]

In Columbia Pictures Industries, Inc. v. Redd Horne, Inc., for example, a video rental store offered to transmit movies from videotapes in a central player to patrons seated in individual viewing booths. The service infringed the public performance right because it transmitted performances “to the public”:  Even though “members of the public view the performance at different times,” the proprietor’s library of videotapes was “ ‘made available by transmission to the public at large.’ ”  Another court reached a similar result in On Command Video Corp. v. Columbia Pictures Industries, finding infringement of the public performance right where a hotel proprietor offered to transmit movies to guest rooms upon request from a central bank of videocassette players.

The systems in Redd Horne and On Command were precursors to modern video-on-demand services widely offered by cable and satellite providers today, as well as similar services offered over the Internet by websites such as Netflix. […] Of course, as in Redd Horne and On Command, each individual video-on-demand transmission is actually received by only one person. But what matters under the Transmit Clause is the potential audience, not how many people actually receive a transmission. A theater owner who sells tickets to the public engages in a public performance even if only one person ends up attending. And a television broadcaster engages in a public performance even if only one person—or nobody at all—turns on his television set. The same is true for video on demand: The transmissions are public performances because they are offered to anyone who wants to receive them, even though each one is ultimately received by only one person.

That focus on the potential audience is fundamental to the public performance right. If a brother calls his sister one Saturday morning and asks her to sing “Happy Birthday” over the phone, the performance is clearly private. But if that same sister realizes she really enjoys singing “Happy Birthday” over the phone and posts a sign in the grocery store that says, “Anyone who wishes to hear me sing Happy Birthday can call me this Saturday morning and I will sing it,” the performance is public—even if her brother happens to be the only person who reads the sign and calls. While both situations involve the same content, the same sender and recipient, and the same individualized transmission path, the critical difference is the potential audience: In the second situation, the sister has held out her performance to the public at large.

To be sure, after a transmission begins, the only potential audience for a particular transmission may be the one person receiving it. But what matters is the potential audience for a transmission at the time the service provider holds out its content and offers to transmit it, before any particular transmission is sent. For example, when a video-on-demand subscriber orders a movie, the particular transmission stream he receives is dedicated to him and cannot be received by anyone else. But that does not make video on demand a private performance. The transmissions are “to the public” because, from an ex ante perspective, the service provider is offering to transmit particular content to anyone willing to pay for it. Any subscriber is capable of receiving the next transmission of a performance from the video-on-demand system, even though the transmissions are made by dedicated streams on a one-at-a-time basis.

This is an important concept: whether a transmission is “to the public” cannot be determined based on who actually receives it, nor can it be determined from the relationship between the sender and the receiver.  Rather, whether a transmission is “to the public” is determined by the potential audience to which it is made available—those who are “capable of receiving” it.

Cablevision’s RS-DVR is a system enabling subscribers to record programs on cloud storage, located in Cablevision’s facilities.  Functionally, the system operates like an in-home DVR.  A subscriber schedules a recording a program, stores the recording in dedicated storage, accessible only to that same subscriber for subsequent playback.

Nonetheless, in 2006, broadcasters and other content owners sued, alleging that the RS-DVR would infringe their public performance rights whenever a subscriber played back his recordings. The Second Circuit rejected that argument. “[I]n determining whether a transmission is made to the public,” it explained, a court must “discern who is ‘capable of receiving’ the performance being transmitted.”  The legislative history, it added, focuses on the “ ‘potential recipients of the transmission.’ ”  The Act thus requires a court to “examine who precisely is ‘capable of receiving’ a particular transmission of a performance.”

The broadcasters urged that Cablevision was transmitting the same prior performance of a work to multiple members of the public—specifically, the performance that occurred “when the programming service supplying Cablevision’s content transmit that content to Cablevision” at some earlier time. The court rejected that “original performance” theory: “[W]e believe that when Congress speaks of transmitting a performance to the public, it refers to the performance created by the act of transmission.”  In other words, the relevant “performance” for purposes of evaluating whether a performance is transmitted “to the public” is not the prior performance from which the transmitter obtains its content, but the performance that occurs when the transmitter communicates that content to a subscriber. And “because the RS-DVR system, as designed, only makes transmissions to one subscriber using a copy made by that subscriber, …the universe of people capable of receiving an RS-DVR transmission is the single subscriber whose self-made copy is used to create that transmission.”

Notice the distinction here.  In Cablevision’s RS-DVR system, the transmissions aren’t merely received by a single subscriber.  Rather, the potential audience for each transmission is always the single subscriber who made the recording being played back.  And just as playback from an in-home DVR is a private performance by the single subscriber who made the recording and is able to play back that recording—even when many subscribers use operator-supplied DVRs to playback the same program—playback from a cloud-based RS-DVR is also a private performance.

Cablevision goes on to demonstrate that the broadcasters’ proposed alternative theory would render not merely Aereo’s transmissions infringing, but also Cablevision’s RS-DVR transmissions, as well as those of cloud providers offering personal storage lockers.  Furthermore, they demonstrate that the broadcasters’ proposed alternative would render file downloads to be performances, and therefore, would require parties who sell legal copies of media to also obtain a performance license, in order to do so.

Cablevision then proceeds to demonstrate that the broadcasters’ interpretation is incorrect, by offering compelling rebuttals for each of their criticisms of Cablevision.

One of the key criticisms of Cablevision put forward by the broadcasters (and others) was that the Second Circuit erred in concluding that the transmission of a recording being played back from the RS-DVR was the relevant performance referenced by the transmit clause, rather than some prior performance (such as, the original broadcast transmission captured in the RS-DVR recording).

A critical aspect of this criticism:

Petitioners accuse Cablevision of conflating “performance” with “transmission” by focusing on the potential audience of a particular transmission when the Transmit Clause refers to persons capable of receiving a “performance.”

Cablevision responds by noting:

The Copyright Act makes clear that one way to “perform” a work publicly is to “transmit” a performance to the public. The Act itself thus defines a transmission of a performance to be one kind of “performance,” by defining “to transmit” as one way “to perform.” When petitioners complain that Cablevision confused “transmission” with “performance,” they are objecting to a basic feature of the statute itself. To be sure, the Act defines “perform” and “transmit” as two separate terms, and not every performance is a transmission or vice versa. But the statute makes clear that a transmission of a performance is one type of performance…. […]

The legislative history removes any doubt. As the 1976 House Report explains, “the concept[ ] of public performance…cover[s] not only the initial rendition or showing, but also any further act by which that rendition or showing is transmitted or communicated to the public.” Thus, “a broadcasting network is performing when it transmits [a performance of a song]; … [and] a cable television system is performing when it retransmits the broadcast to its subscribers.”  “[A]ny act by which the initial performance…is transmitted, repeated, or made to recur would itself be a ‘performance’…under the bill.” Congress thus could not have been more clear that “a transmission of a performance is itself a performance.”

Cablevision recognized that there is a potential ambiguity in the statute because the Transmit Clause does not specify which “performance” it is referring to: (1) the performance created by the act of transmission; or (2) some prior performance. Cablevision ruled in favor of the former alternative. For reasons explained below, that holding was correct. The point here, however, is simply that petitioners’ disagreement with Cablevision over which “performance” Congress was referring to does not mean Cablevision conflated the terms “transmission” and “performance” or otherwise ignored the terms of the statute.

Another criticism of Cablevision:

Petitioners also assert that “the Second Circuit’s construction…renders a significant part of the [Transmit Clause] entirely superfluous.” The Transmit Clause applies when “members of the public capable of receiving the performance…receive itat different times.”  According to petitioners, that definition proves that the relevant “performance” must be some prior performance, such as the original broadcast of a television show or the original rendition of a musical work, rather than the performance created by the act of transmission. That is so, they claim, because “it is essentially impossible for two people to receive the same transmission of a performance ‘at different times.’ ”

Cablevision responds:

That argument misreads the statute. Although the word “the” can be used to identify a specific item, it can also be used to “[i]ndicat[e] that a concrete term is to be understood generically and not individually,” as in “the pen is mightier than the sword.” Webster’s New International Dictionary of the English Language 2617 (2d ed. 1954). Thus, a sign in a car rental agency stating that “Customers are responsible for any damage to the automobile during the rental period” is not implying that all customers must rent the same car at the same time. It is simply using the terms “the automobile” and “the rental period” to refer generically to whatever car and rental period are associated with a particular customer.

That is how the Transmit Clause uses the word. The reference to “the performance” in the phrase “members of the public capable of receiving the performance” is not a reference to a single unified performance that various members of the public all collectively receive. It is a generic reference to whatever performance each member of the public happens to receive.

The legislative history uses the term precisely that way. The 1967 House Report, discussing “sounds or images stored in an information system and capable of being performed or displayed at the initiative of individual members of the public,” explains that the Transmit Clause applies “where the transmission is capable of reaching different recipients at different times.” Congress itself thus understood that members of the public could receive “the transmission,” in the generic sense, “at different times”—precisely the formulation petitioners deem “essentially impossible.”

The Second Circuit thus did not render the “different times” clause “entirely superfluous.”  Transmission systems that hold out content for individualized transmission to the public—such as video-on-demand services or websites like Netflix—render public performances because any subscriber can receive the next transmission simply by signing up. Each transmission is available to the public because, the moment before transmission begins, whatever person signs up next will receive it. The “different times” clause makes clear that such performances are public even though each subscriber receives “the transmission”—i.e., whatever transmission he receives—“at different times.” That is how Congress intended the Transmit Clause to operate, and nothing in the Second Circuit’s opinion is in any way inconsistent with that design.

And as promised, Cablevision proceeds to present a compelling argument that the relevant performance is, indeed, the performance created by the act of transmission:

While petitioners’ attacks on Cablevision fall short, the arguments in favor of Cablevision’s holding are compelling.  For several reasons, Cablevision properly interpreted the reference to “performance” in the Transmit Clause to mean the performance created by the act of transmission, not some prior performance.

First, that interpretation is the only one that reconciles the statutory text with the legislative history. Although the Transmit Clause refers to “members of the public capable of receiving the performance,” the legislative history repeatedly refers to the potential audience of the transmission. For example, the 1967 House Report states that the Transmit Clause applies “where the transmission is capable of reaching different recipients at different times.”  The 1976 House Report similarly refers to “the potential recipients of the transmission.”

That interchangeable use of “transmission” and “performance” makes sense only if the relevant “performance” is the one created by the act of transmission. In that case, the potential audience for the “performance” and the potential audience for the “transmission” are one and the same, so referring interchangeably to the two is entirely natural. By contrast, if the relevant “performance” is some prior performance, the two terms are not interchangeable, because the potential audience for the prior performance could be much larger. That the legislative history uses the terms interchangeably shows that Congress had the former interpretation in mind.

Second, petitioners’ construction is incoherent in the many contexts where there is no prior performance. For example, a sporting event is not a “performance,” because the players on the field are not performing any work entitled to copyright protection.  Thus, when a network broadcasts a sporting event, the only performance being transmitted is the performance created by the act of transmission—there is no prior performance. The same is true where a video-on-demand service transmits an original animated movie or an Internet radio website transmits a computer-synthesized musical work: There would typically be no prior performance at all, only the performance created by the transmission.  The many contexts where a transmission does not involve any prior performance suggests that Congress would not have drafted the Transmit Clause with prior performances in mind.

Finally, as already noted, petitioners’ theory eliminates the distinction between downloading and streaming. If the relevant “performance” is the one created by the act of transmission, as Cablevision held, making files available for download is not a public performance, because there is no contemporaneous rendition or showing.  By contrast, if the relevant “performance” is some prior performance, such as the performance that occurred when musicians played a song in the recording studio, making files available for download is a public performance: The transmitter is “transmit[ting] … [a prior] performance…of the work…to the public.”  That cannot be right.

Finally, Cablevision explains that regardless of which performance is referenced, RS-DVR playback performances are not “to the public:”

Even if petitioners were correct that the term “performance” in the Transmit Clause encompasses prior performances—so that, for example, a cable system was transmitting a broadcast station’s prior performance of a television show when retransmitting the content to the public—that still would not support their expansive construction. The Transmit Clause applies where a person “transmit[s]…a performance…of the work…to the public, …whether the members of the public capable of receiving the performance…receive it in the same place or in separate places and at the same time or at different times.” That “to the public” requirement applies regardless of which performance the term “performance” refers to: Whether “performance” refers to the performance created by the act of transmission or some prior performance, the provider still must be “transmit[ting]” the performance “to the public.” As the legislative history puts it: “Although any act by which the initial performance…is transmitted, repeated, or made to recur would itself be a ‘performance’…under the bill, it would not be actionable as an infringement unless it [i.e., the transmission] were done ‘publicly,’ as defined in section 101.”

As explained earlier, in both ordinary and legal usage, something is “public” only if it is held out or made available to a substantial number of persons. Under the statute, therefore, a transmitter is not publicly performing a work unless it is transmitting a performance “to the public”—that is, making the performance generally available or holding it out to the public at large. That is true even if the “performance” is some prior performance rather than the performance created by the act of transmission.

Thus, a cloud service like Amazon Cloud Player is not publicly performing when two subscribers happen to upload and stream back their own separate copies of the same music album or the same television show. Although Amazon’s servers may transmit the same prior performance of the song or show to multiple subscribers, Amazon is not transmitting that performance “to the public,” because it is not holding out the performance or making the performance generally available. It is merely offering a service that enables separate private performances of content that each individual subscriber independently selected and chose to upload.

The same is true of Cablevision’s RS-DVR. That multiple subscribers may independently choose to record and play back the same previously broadcast television show does not mean that Cablevision is transmitting that prior performance “to the public.” Cablevision simply offers a service that allows subscribers to engage in private performances by recording television shows of their own choosing and then playing back their own personal recordings to themselves.

Those systems stand in sharp contrast to a typical video-on-demand service or a website like Netflix. Such services select a library of content and hold it out to the public by offering to transmit performances to anyone willing to pay. Even though the performances are delivered by individualized transmissions, they are still held out generally to the public. The same cannot be said of cloud technologies like remote DVRs.

With such a resounding defense of the Second Circuit’s holding in Cablevision that transmissions from Cablevision’s RS-DVR are private performances, readers are left to wonder how the Second Circuit could have been wrong in concluding that the transmissions from Aereo’s nearly identical RS-DVR are also private performances.

Cablevision attempts to answer this by, in essence, telling us that the details of Aereo’s RS-DVR should be ignored, because those details don’t change the big picture that Aereo’s system, at an abstract level, can be viewed as functionally equivalent to a cable system, offering to transmit broadcast signals to “anyone willing to pay.”

This sounds remarkably like the broadcasters’/programmers’ argument in Cablevision.

It’s unfortunate that Cablevision pivots to such a completely different, and thoroughly unimpressive, tack of abstract hand-waving when analyzing Aereo’s system, but that they do doesn’t diminish the quality of the case they present that the Second Circuit actually got it right in Cablevision, and that the broadcasters’ criticisms of the Cablevision holding, underlying the Aereo case, simply can’t withstand scrutiny.

For complete coverage of Aereo, see our Understanding Aereo page.