Supreme Court rules against Aereo -- but people want local TV online

The Supreme Court says Aereo is distributing copyrighted material, but there is demand for their service.

An Aereo antenna

The Supreme Court has ruled against Aereo, a company that stores local, over-the-air TV broadcasts then streams then on the Internet. The Court ruled that Aereo was retransmitting copyrighted material without permission.

Aereo deployed arrays of dime-sized antennae and claimed that they were merely leasing a speciic antenna to each customer and delivering content that was received by the customer's personal antenna.

An array of tiny antennae

The lower court case against Aereo challenged their technology claim -- questioning whether those dime-sized antennae were electronically independent. (If they were acting as a single, integrated antenna, Aereo would have been a clear copyright violator).

Expert witnesses on the technology were divided during the first case -- Aereo's expert said the antennae were independent and the TV station's expert disagreed.

The Supreme Court decision did not depend on a technology argument -- they held that Aereo was not in the antenna leasing business but were sellers of subscriptions to watch copyrighted television programs.

I am a cord cutter and was cheering for Aereo, even though I questioned their technology claim and regarded their system as a kludge designed to get around copyright law.

What about the future of local TV? If those tiny antennae really worked independently, Aereo could sell them to end-users and let them receive local broadcasts over the air, but I suspect they either do not work as claimed or only work if they are located very close to the transmitting antenna.

Regardless, the current Aereo business model is toast, but they have shown that there is a market for local content delivered over the Internet. If customers are willing to pay for streaming of local content (including ads), why don't the copyright holders offer the service themselves or hire Aereo to do it for them?

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Update 7/1/2014

I said that those dime-sized antennae seemed bogus to me -- that they could not truly be independent. Pete Putnam agrees and presents a detailed technical analysis supporting his conclusion that the antenna array would have to be within a couple hundred feet of the TV transmission tower for such small antennae to work independently.

That is technical support for the broadcaster's assertion that Aereo was essentially doing the same thing as a cable company -- capturing and retransmitting copyrighted material -- but without paying the retransmission fees charged to cable companies.

That raises the question -- how much are those retransmission fees? I went to the Dish Network Web site and found that "Local channels for non-qualifying packages are $6.00 per month." Dish evidently finds it profitable to pay the retransmission fees and charge customers $6 per month. They also offer "Superstaions" for $2 per month each.

So, why doesn't Aereo or someone else go into the legal business of paying the retransmission fees, keeping track of the number of viewers for the sake of advertising sales, and offer local channels over the Internet? Aereo showed there was a market demand for such service.

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Update
7/20/2014

I've expressed doubt over the technical feasibility of Aereo's claim that they were renting independent TV antennas to their customers, but the Supreme Court ruled that even if that technology did work, Aereo was essentially acting as a cable company. I suggested that they had demonstrated a demand for local TV over the Internet and suggested that they pay the retransmission fees and become a "cable" company. But, the Copyright Office does not agree that they are a cable company, and, even if they are, the broadcasters might be able to force them to carry arbitrary bundles of channels like they do "real" cable companies. I am not a lawyer, but it seems Aereo is finished. There is demand for local TV streamed online -- will the broadcasters allow that to happen at any price?

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Update 9/30/2014

The Supreme Court decided that Aereo was a reseller of copyrighted material, not an antenna leaser, so ruled that they could not rebroadcast local, over the air TV signals. That shot them down ... for the time being.

Aereo has demonstrated that there is demand for local TV over the Internet, and the FCC is now considering a proposal to treat online video services like cable and satellite TV providers. If that were the case, Aereo and others could pay the same sort of retransmission fee as Comcast, et al, and provide local scheduled programs over the Internet. Aereo and others could negotiate retransmission fees and be back in business. Aereo could also drop the technically questionable claim that they were leasing access to independent antennae.

The Aereo local TV case -- new patents and conflicting experts

I've been watching Aereo's effort to stream local TV online since they launched and were immediately sued. They've just won a legal round -- a temporary injunction against them was denied -- but the case may continue.

I'm rooting for Aereo because I want to see all local TV online one day.

I'm a cord cutter, but I'm happy to pay for selected video content. I subscribe to Netflix and Amazon Prime and just paid a one time charge to stream the Tour de France. Fortunately, I can watch local TV over the air with a rabbit ears antenna. All my local stations transmit from the same mountain top, Mount Wilson, so I don't even have to play around with the antenna.

If I lived a long way from Mount Wilson or was surrounded by tall buildings in a city like New York, I would be out of luck with my rabbit ears, but I would be willing to pay Aereo or anyone else a reasonable fee for local channels -- either all of them or ala carte.

The law suit against Aereo claims they are rebroadcasting copyrighted material. Aereo counters that they've developed technology enabling them to assign each user his or her own dime-sized antenna, either permanently or dynamically when they log in. It is as if the user had mounted their antenna at Aereo's location instead of on their own rooftop.

Yesterday, Judge Alison Nathan of the United States District Court in Manhattan denied a request for a temporary injunction stopping Aereo from offering their service.

Aereo won a battle, but not yet the war. Their case still hinges upon the claim that those dime-sized antennas are independent of each other and each is rented to a different user.

When I wrote about Aereo earlier, I expressed some skepticism about their technology. Take a look at your rabbit ears or rooftop antenna -- it's a lot bigger than a dime. That's because optimal antenna size is determined by signal wavelength, and the optimal length of a rabbit ears antenna would be roughly one to eight feet, depending on which channel you were watching. The antenna would also have to be oriented correctly for best reception.

I'm not qualified to say that a dime-sized TV antenna is not possible with enough design and signal processing smarts, but it would be quite an engineering feat.

I was also skeptical of Aereo PR. When Aereo was launched, they stated that CEO Chaitanya Kanojia held 12 patents, but a quick check showed that none were related to antenna design. When I asked Aereo about patents at the time, they would not comment.

What have we learned since then?

I am happy to say that Aereo has now filed for four patents:

• 20120127363 - Antenna system with individually addressable elements in dense array
  
• 20120127374 - System and method for providing network access to antenna feeds
  
• 20120129479 - Method and system for processing antenna feeds using separate processing pipelines
  
• 20120131621 - System and method for providing network access to individually recorded content

I skimmed over the applications and noted considerable overlap. For example, three of the four applications have identical abstracts and the fourth abstract only differs by the addition of four words. The diagram shown above is also included in each application. Still, they have filed patent applications, which hopefully disclose a successful design for a very small TV antenna. The court has also had roughly eleven weeks for expedited discovery and briefing on the preliminary injunction motion. The focus was on the antennas. As Judge Nathan states in her opinion:

The only significant factual dispute concerns the operation of Aereo's antennas. Aereo contends that each of its antennas functions separately to receive the incoming broadcast signals. Plaintiffs assert that Aereo's antennas function collectively as a single antenna, aided by a shared metallic substructure.

Each side presented expert testimony, and the experts disagreed. The plaintiff's expert was Dr. John Volakis. In her ruling the judge summarized Dr. Volakis' finding that

the antennas do not function independently. Instead, according to Dr. Volakis, the antennas are packed on the board so close together that the incoming signal "does not see the loops as separate elements, but rather as one continuous piece of metal," the function of which is further aided by a common metal substructure formed by the circuit boards and the metal rails.

It's no surprise that the defendents experts, Dr. Pozar and Dr. Horowitz, disagreed. The judge wrote that

Dr. Pozar and Dr. Horowitz maintain that the construction of the antenna system requires the antennas to function independently, and Dr. Horowitz has observed numerous (if small) differences in recordings of the same program created by two different antennas. ... Moreover, tests performed at the Aereo site demonstrate that the signal received by Aereo's antennas is 1,000 times stronger than that needed for reliable reception.

Is it an array of small antennas or one big antenna? The judge concluded the discussion of the antennas by stating:

Based on the evidence at this stage of the proceedings, the Court finds that Aereo's antennas function independently. That is to say, each antenna separately receives the incoming broadcast signal, rather than functioning collectively with the other antennas or with the assistance of the shared metal substructure.

That had to make Aereo fans smile, but it is only based on evidence "at this stage of the proceedings."

We will see whether the case continues and, if it does, how it turns out.

As I said at the start, I am pulling for Aereo or anyone else who can get local TV streamed online. Let's assume Aereo's technology claims are indeed true and they prevail in this case. What then?

As much as I hope Aereo wins, they have created a kludge to work around the copyright laws. It would be simpler for local stations to stream their content themselves, eliminating the need for Aereo.

What might Aereo do if the local stations were to do that? For a start they might give up their antennas and do the streaming for the local stations. Their patents cover transcoding and indexing content -- they could provide streaming service to local stations.

Furthermore, if those antennas can really pull in a signal 1,000 time stronger than that needed for reliable reception, I want one. In fact I want more than one. Again, it would be a lot less kludgy to just sell the antennas to end users who cannot get local stations with a rabbit ears antenna, but could with an Aereo antenna. If the antenna works well, it could take over the indoor antenna market.

If the technology works, Aereo can pivot and win even if they don't make it as a streaming company.