Supreme Court rules against internet TV service Aereo (Updated)

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The Supreme Court issued a ruling June 25  that Aereo, a start-up streaming service, violated copyright laws by taking free television signals from the airwaves and charging subscribers to watch programs on their laptops, smartphones, and even televisions.

SCOTUS reversed the ruling of the second-circuit court, which upheld that Aereo was within the bounds of the law. It was a 6-3 decision, with Justices Scalia, Thomas, and Alito dissenting.

In arguments in April, Aereo contended that its service mimicked the traditional methods of television consumption. Its service amasses a set of miniature antennas and then assigns them individually to subscribers, as if they each owned their own pair of rabbit ears. Broadcasters, however, sued for copyright infringement, arguing that Aereo should pay for for redistributing this programming.

According to SCOTUSblog, “the essence of the Aereo ruling is that Aereo is equivalent to a cable company, not merely an equipment provider.” That is, the startup claims to only provide subscribers with equipment to stream television for free, but the justices believed that their model was not significantly different from that of a cable company, which would pay a fee for these signals.

Aereo has stated that if the Supreme Court were to decide against it, it would probably not be able to continue its services.

Update: CNBC reported on June 17 that the U.S. Copyright Office sent a letter on June 16 to Aereo stating that it did not consider it a “cable company” under the terms of copyright law. The company has suspended operations while it determines its next move.

Earlier this month, Aereo had announced plans to seek the compulsory license granted to cable companies, arguing that, if it were classified as a cable company, it should receive the benefits of one. The benefits of such a license include paying limited royalties for broadcast television content.

A previous legal decision had ruled that online video companies were unable to obtain compulsory licenses, but Aereo argued in a letter last week that the Supreme Court’s decision effectively overruled that decision. But the Copyright office didn’t buy that argument: “We do not see anything in the Supreme Court’s recent decision…that would alter this conclusion.”

Since the company’s case is still before the courts, the Copyright Office noted that it would provisionally accept Aereo’s filings to pay royalty fees for the content it broadcast between January 2012 and December 2013.

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