Justices: Streaming service Aereo is illegal

Published On: Aug 06 2014 03:10:54 AM HST   Updated On: Jun 25 2014 05:13:24 AM HST

John Coughlin/CNNMoney

A huge win for the nation's biggest television broadcasters: in a 6-3 ruling, the Supreme Court said Wednesday that streaming television startup Aereo violates the Copyright Act.

"Today's decision is a victory for consumers," Paul Clement, the attorney representing the broadcasters, said in a statement. "The Court has sent a clear message that it will uphold the letter and spirit of the law just as Congress intended."

It wasn't immediately clear what Aereo would do next. Ever since Aereo was introduced in early 2012, its biggest financial backer, Barry Diller, has said that there is "no plan B" if the courts concluded that it was operating illegally.

Using thousands of miniature TV antennas, Aereo scoops up the freely available signals of local stations in cities like New York, Boston and Atlanta. It then delivers those signals to the smartphones, tablets or computers of paying subscribers.

Subscribers pick what to watch through a traditional on-screen guide. They can also record shows and stream them later.

A group of broadcasters sued Aereo in early 2012, before it had even launched in its first market, New York City. The broadcasters asserted that Aereo violated copyright laws by allowing "public performances" of their TV shows. Aereo said it was only enabling private screenings, just like off-the-shelf TV antennas do.

The issue reached the Supreme Court last fall and the case was heard in April.

The formal issue before the court was "whether a company 'publicly performs' a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers over the Internet."

The owners of ABC, CBS, Fox, NBC, Univision and other broadcasters put up a united front against Aereo. (Time Warner, the parent company of CNN and CNNMoney, was not a plaintiff in the case, but did support the broadcasters.)

Fueling the feeling that Aereo was David battling Goliath, the Justice Department and the United States Copyright Office took a public position against Aereo and called it "clearly infringing."

"What Aereo is doing is really the functional equivalent of what Congress in the 1976 [Copyright] Act wanted to define as a public performance," Malcolm Stewart, a deputy solicitor general at the Department of Justice, told the Supreme Court justices during oral arguments in April.

Aereo and its supporters strongly disagreed -- they said the service was expressly created to abide by the law.

"Aereo is, essentially, simply an antenna device that replaces technologically what you used to have to do — to go up to your rooftop and erect an antenna," Diller said.

Diller, in a CNN interview in April, said that a ruling against Aereo would "have profound effects on the development of technology."

Aereo had no immediate comment about Wednesday's ruling.

But one of the plaintiffs, The Walt Disney Company, weighed in right away: "We're gratified the Court upheld important Copyright principles that help ensure that the high-quality creative content consumers expect and demand is protected and incentivized."

Editor's Note:  Hearst-owned WCVB has a similar case pending against Aereo. That case is subject to further review based on Wednesday's ruling.


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