One More Aereo Amicus: Aereo as Cable System

Posted By on Apr 10, 2014 | 0 comments

When I published Aereo Amici Roundup earlier this week, I thought I was done writing here on Aereo briefs, and probably done writing on Aereo altogether, until after oral arguments two weeks from now.  However, I had not yet been able to get a copy of the FilmOn X brief in support of Aereo, and now that I have, I find that it makes one point not made elsewhere, and worth taking the time to share.

For those who aren’t familiar with it, FilmOn X is an Aereo competitor, who apparently uses similar technology involving miniaturized antennas and cloud DVR.  The broadcasters also sued FilmOn X, but with much more success, winning preliminary injunctions in both cases brought.

The bulk of FilmOn X’s brief is spent on lines of argument made (more eloquently) by others.  However, FilmOn X does raise one interesting argument worth reviewing: an admonition to the Court that if it finds that systems such as Aereo’s (and FilmOn X’s) are simply a “device or process” effecting transmissions tantamount to cable transmissions under the transmit clause of the Copyright Act, then they should also find that such systems also constitute “cable systems” as defined in the Copyright Act, and as such, are entitled to the compulsory license created for cable systems in the Copyright Act.

This relates to the point made by Aereo in its own brief, that when Congress modified the Copyright Act to define cable retransmission a public performance subject to copyright, they also granted cable systems a royalty-free compulsory license to retransmit broadcast stations within their local market—which, of course, is exactly what Aereo does.

(For readers left wondering what all the talk about “retransmission fees” are, these are fees paid by cable systems directly to broadcasters, not copyright holders, under the 1992 Cable Act.  Such fees are not copyright royalties, and are completely independent of the Copyright Act.)

FilmOn X argues that it would upset the very intentional balance Congress created in the Copyright Act to deem Aereo’s transmissions as tantamount to cable transmission for the purpose of infringement analysis, on the one hand, while treating it as distinct from cable transmission for the purpose of the compulsory license (citations omitted from all excerpts):

It is important that the 1976 Copyright Act be interpreted in a consistent and fair manner. In this action, the Networks urge a “broad and technology neutral” interpretation of the Transmit Clause that disregards the “technical details” of Aereo’s system, reasoning that Aereo’s service is a “device or process” that, in aggregate, retransmits performances to the public in violation of the Transmit Clause.

However, when streaming Internet television services have attempted to qualify for a compulsory license under section 111, the Networks have argued that this section should be narrowly-construed, even though the section incorporates language that is similarly broad. The logic behind these two positions cannot be reconciled. To apply a broad interpretation of the transmissions in the Transmit Clause but a narrow interpretation of the transmissions in section 111 is logically inconsistent, inherently unfair, and extremely restrictive of the public’s right to access free over-the-air broadcast content by “any device or process.” […]

To date, this Court has not considered whether a service that transmits television programming over the Internet constitutes a cable system under section 111. But in interpreting statutory language, this Court has consistently held that the plain language of a statute governs. The first canon of statutory interpretation is that “courts must give effect to the clear meaning of statutes as written.”

In this case, the statutory language is plain. A “cable system” is broadly defined for the purpose of the compulsory license program as:

[1] a facility, located in any State, Territory, Trust Territory, or Possession, that [2] in whole or in part receives signals transmitted or programs broadcast by one or more television broadcast stations licensed by the Federal Communications Commission, and [3] makes secondary transmissions of such signals or programs by wires, cables, microwave, or other communications channels to [4] subscribing members of the public who pay for such service.

Additionally, section 101 states that “to ‘transmit’ a performance or display is to communicate it by any device or process whereby images or sounds are received beyond the place from which they are sent.” Thus, the “any device or process” language relied upon by the Networks in this action is not limited to the Transmit Clause, but applies to the Copyright Act as a whole including the compulsory licensing scheme.

If this Court adopts the Networks’ contention that Aereo makes secondary transmissions to the public in violation of the Transmit Clause, then its own logic would require that it also find that similar Internet-based services may qualify as a “cable system.” Under the Networks’ own reasoning, FilmOn has physical facilities where it receives primary transmissions in the form of over-the-air signals transmitted by stations licensed by the FCC. It then makes secondary transmissions of those signals by wires, cables, microwaves, or other communications channels to subscribing members of the public who pay for such service (albeit at the direction of its subscribers in private performances). Thus, Internet-based services such as FilmOn would satisfy the definition of a cable system under the compulsory licensing program.

This seems a very fair point.  The definition of “cable system” under the Copyright Act turns on the very same “any device or process” language used in the transmit clause.  If systems such as Aereo’s constitute a “device or process” for the purposes of the transmit clause, why would they not constitute a “device or process” for the purposes of the definition of “cable systems?”

More food for thought, ahead of oral arguments on April 22nd.

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