Aereo Briefs: Revisiting the Menell-Nimmer Parade of Horribles

Posted By on Mar 18, 2014 | 0 comments

A few weeks ago, we published an analysis of the Menell/Nimmer amicus brief in the Aereo case, concluding that Menell’s and Nimmer’s argument was anything but the “airtight” case they claimed it to be.

After reviewing Cablevision’s amicus brief in the Aereo case, Cablevision’s much more compelling defense of the Cablevision precedent had us rethinking one aspect of our commentary on the Menell/Nimmer brief.  In that article, we wrote about the parade of horribles that Menell and Nimmer asserted could ensue, should Aereo be upheld, saying:

Menell and Nimmer fail to identify the theory by which they believe that Aereo might simultaneously edit and intermingle their own advertising with the retransmission of a broadcast signal while still qualifying as an equipment rental system where the user receives and retransmits the signal to herself.  On its face, it would seem obvious that undertaking to modify the content of the transmission would introduce an element of volition by Aereo incompatible with the conclusion that their system functions as a mere equipment rental, and rendering Aereo (rather than the individual subscriber) the performer in what would, therefore, presumably be rendered a public performance.

and later:

At most, by citing this parade of horribles, Menell and Nimmer have provided cause to question the Second Circuit’s view that they could determine the performances in Cablevision and Aereo to be private in nature without actually making a determination as to whether the service provider or the individual were the performer.  If one treats the individual copy as sacrosanct, and asserts that any action taken with respect to an individual copy is always, necessarily, a private performance, perhaps it would be possible to reach the first horrible that they present.

As a reminder, the first horrible Menell and Nimmer asserted was that Aereo could delete commercials, or replace commercials with their own, with impunity.

Cablevision’s brief, however, is compelling in its defense of the Second Holding in Cablevision, including its conclusion that the transmissions in Cablevision’s systems can be determined to be private performances, without needing to determine who the performer is.

Accordingly, we think it’s potentially conceivable that the private nature of transmissions in the Aereo system could be maintained, even with some form of commercial adulteration, as Menell and Nimmer suggest.

However, it’s critical to note that, if so, this problem is hardly unique to Aereo.  If such could be legal in Aereo’s system, it would be equally legal for existing cable, satellite and telco operators to achieve, using the in-home devices (set-top boxes, and DVRs) that they use today to deliver service.  And in fact, deleting commercials sounds exactly like Dish Networks’ Autohop feature.  Replacing commercials would be just a slight variant.

Critics will be quick to point out that the need for providers such as Dish Networks to license retransmission provides an opportunity for broadcasters to negotiate to prevent such commercial adulteration, precisely as Disney (ABC) did in a recent deal with Dish.  Without the need to negotiate a retransmission license, on the other hand, Aereo would be immune to such.

And they would be correct, in that regard.  But this also fails to make Aereo unique.  In fact, it merely makes Aereo just like any other equipment supplier.  After all, a supplier such as Tivo could just as easily implement ad-skipping or replacement.  (Tivo has, in fact, already implemented banner advertising, that can partially obstruct video content.  And they have implemented on-demand commercials, currently only manually initiated by users.)  What’s more, one equipment supplier, early Tivo competitor ReplayTV, actually did implement automatic ad-skipping.

None of these equipment suppliers are required to negotiate any carriage license, and so would be equally immune to negotiation-based resolutions.  In fact, broadcasters ended up suing ReplayTV over their ad-skipping, and ReplayTV eventually settled for lack of resources to fight the suit.  And despite the presence of carriage agreements, broadcasters also had to sue Dish over its Autohop feature, though to this point Dish has prevailed in the courts.  (However, it seems likely that the customer volition arguments, on which Dish has succeeded in litigation to this point, would be vitiated were Dish to actually replace commercials with their own.)

So while Menell and Nimmer conceivably could be correct that, if found legal, Aereo might be able to legally adulterate commercials, they are incorrect in suggesting that such would be in any way unique to Aereo, or its delivery model.

Likewise, they are incorrect in suggesting that finding Aereo to be infringing is somehow a solution to such.  If the risk of commercial adulteration is a serious concern, then it would require a much broader fix than finding one equipment supplier’s implementation to be illegal.

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