Aereo Argues That Ruling Against it Could Hurt Cloud Storage Business

The steaming video service argues it does not violate US copyright law by giving subscribers access to over-the-air TV

If the U.S. Supreme Court rules that streaming video provider Aereo violates the copyrights of TV networks, it may also put cloud storage services at risk, the company's lawyer argued Monday.

Aereo does not trigger the so-called public performance clause in U.S. copyright law, and should not have to pay royalties, because it gives subscribers access only to TV stations that are available over the air for free, David Frederick, Aereo's lawyer, told the panel of Supreme Court justices. And unlike cable and satellite TV services, which pay royalties to some networks, Aereo does not give thousands of people access to the same TV show at the same time, he said.

Instead, 2-year-old Aereo -- which has been sued for copyright infringement by ABC, CBS and other broadcast TV networks -- rents each subscriber an antenna and a DVR service, and customers individually choose what TV programs to watch, Frederick said.

While copyright law requires royalties for public performances, defined as a performance "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," Aereo provides a personalized service to each subscriber, he said.

"There's no [television] content being provided," he told justices. "There's equipment being provided."

Aereo's service is similar to cloud storage services, where a user stores videos, Frederick said. If the court determines that the act of sharing individual copies of a copyright-protected video is a copyright violation, then cloud storage providers will be the next target, he said.

If a cloud service has multiple copies of the same video, then the TV networks that have sued Aereo might argue that the cloud's service of making that video available to multiple users is a copyright violation, he said. "There's a reason the cloud community is freaked out in this case," he said.

However, the lawyer for the TV networks maintained that the Supreme Court doesn't need to deal with cloud storage services in the case. A cloud storage service is different from Aereo because users are providing content they've obtained, while Aereo gives subscribers access to content, argued Paul Clement.

Aereo is acting much like a cable TV service in delivering TV signals to a mass audience, Clement said.

The justices had questions about how they could rule against Aereo and not affect cloud services. If Aereo violates copyright law by providing a public performance without paying royalties, then "1,000 people who have the same content" in the same cloud locker may also be considered a public performance, said Justice Stephen Breyer.

Several justices seemed unconvinced by Aereo's arguments, however. Aereo gives subscribers access to potentially millions of TV programs and is "essentially selling them to the public," said Justice Sonia Sotomayor.

Chief Justice John Roberts also questioned if Aereo supplied each subscriber with her own small antenna "solely to circumvent" the public performance provision in U.S. copyright law. Aereo's service looks in many ways like a cable service, which has to pay royalties to networks, he and other justices said.

"You're saying your copy [of a TV show] is different than my copy," Roberts said. "There's a reason they're called copies. They're all the same."

Aereo, like cable providers, is serving "legions of subscribers," added Justice Ruth Bader Ginsburg.

But the Supreme Court wouldn't be having this debate if Aereo rented subscribers a DVR service and TV antennas that were located at subscribers' homes, Frederick countered. The Supreme Court has ruled that DVRs do not violate copyright, and no one would argue that TV antenna makers are responsible for paying royalties for free, over-the-air TV programs, he said.

Aereo is essentially providing the same service, only the antennas and DVRs are located in the company's facilities, he said. The geographical location of the equipment Aereo is renting "can't change the copyright analysis," he said.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.

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