Here are a variety of comments and statements on the good news (6/25) from the Supreme Court ruling in favor of broadcasters in the ABC Inc. v. Aereo case, which was the appeal of a 2nd Circuit Court decision over Aereo’s business model that allows transmission of broadcast TV content over the Internet:
Said NAB President and CEO Gordon Smith: “NAB is pleased the Supreme Court has upheld the concept of copyright protection that is enshrined in the Constitution by standing with free and local television. Aereo characterized our lawsuit as an attack on innovation; that claim is demonstrably false. Broadcasters embrace innovation every day, as evidenced by our leadership in HDTV, social media, mobile apps, user-generated content, along with network TV backed ventures like Hulu.”Television broadcasters will always welcome partnerships with companies who respect copyright law. Today’s decision sends an unmistakable message that businesses built on the theft of copyrighted material will not be tolerated.”
Said Larry Patrick, Managing Partner, Patrick Communications: “I was pleased to see the Supreme Court uphold the copyright holders’ position. I look forward to reading the majority as well as the dissenting opinions. For now, local broadcasters and their networks are safe from this encroachment from Aereo. This is a narrow ruling that applies just to this service. Future technological advancements will likely make regulators and the justices revisit this collision of technology and copyright protection.”
Aereo CEO and Founder, Chet Kanojia: “Today’s decision by the United States Supreme Court is a massive setback for the American consumer. We’ve said all along that we worked diligently to create a technology that complies with the law, but today’s decision clearly states that how the technology works does not matter. This sends a chilling message to the technology industry. It is troubling that the Court states in its decision that, ‘to the extent commercial actors or other interested entities may be concerned with the relationship between the development and use of such technologies and the Copyright Act, they are of course free to seek action from Congress.’ (Majority, page 17) That begs the question: Are we moving towards a permission-based system for technology innovation?
Consumer access to free-to-air broadcast television is an essential part of our country’s fabric. Using an antenna to access free-to-air broadcast television is still meaningful for more than 60 million Americans across the United States. And when new technology enables consumers to use a smarter, easier to use antenna, consumers and the marketplace win. Free-to-air broadcast television should not be available only to those who can afford to pay for the cable or satellite bundle.”
Justice Scalia’s dissent gets its right. He calls out the majority’s opinion as ‘built on the shakiest of foundations.’ (Dissent, page 7) Justice Scalia goes on to say that ‘The Court vows that its ruling will not affect cloud-storage providers and cable television systems, see ante, at 16-17, but it cannot deliver on that promise given the imprecision of its results-driven rule.’ (Dissent, page 11)”
We are disappointed in the outcome, but our work is not done. We will continue to fight for our consumers and fight to create innovative technologies that have a meaningful and positive impact on our world.”
Noted Francisco Montero, Managing Partner, Fletcher, Heald & Hildreth, P.L.C.: “The victory by the broadcasters is not entirely a surprise (I have been predicting it, as have many Supreme Court odds-makers) but it is a relief nonetheless. The high court ruled that Aereo violated copyright law by retransmitting the over-the-air programming of broadcasters without their permission. By a 6-3 vote, the Supreme Court ruled that Aereo’s streaming service was a “public performance” of the networks’ copyrighted works and rejected Aereo’s claim that it was merely leasing antennas and equipment to subscribers for personal (non-public) use. The decision was written by Justice Stephen Breyer, reversing a Second Circuit ruling in favor of Aereo; a ruling which relied heavily on the Second Circuit’s earlier Cablevision decision which held that an off-site DVR service was a “private” performance — no different than if the DVR was in a private living room. In reversing the Second Circuit, the Supreme Court has effectively imposed a nationwide injunction on Aereo’s ability to conduct further business. Justice Antonin Scalia dissented, joined by Justices Clarence Thomas and Samuel Alito. At oral argument, the questioning by the justices reflected skepticism about Aereo’s claims and appeared to strike some justices as a bit too cute and taking advantage of a loophole. As Chief Justice Roberts questioned Aereo’s counsel during oral arguments “There’s no reason for you to have 10,000 dime-sized antennas except to get around copyright laws…” In the end, that viewpoint prevailed.”
“Said Disney/ABC: “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.”
Said SAG/AFTRA: “SAG-AFTRA applauds the U.S. Supreme Court’s decision in the Aereo case, which sends a clear and strong message that the Court will not permit companies like Aereo to use inconsequential technical workarounds to evade Congress’ intent to protect content creators and owners in the Copyright Act. By adopting a practical analysis that recognizes the extraordinary similarity between Aereo and the cable systems Congress expressly regulated in the Act, the Court rightly focuses on the use of copyrighted works and refused to be sidetracked by the inconsequential technical details with which Aereo attempted to cloak itself. But in doing so, the Court properly limited the scope of the decision so that cloud services and other technological innovations are neither inhibited nor limited. This decision gives the creative community greater confidence that copyright law cannot be so simply evaded and restores the proper balance to the system.”
Les Moonves, President & CEO of CBS, spoke with Bloomberg Television’s Trish Regan about the Supreme Court decision on Aereo. Moonves said, “We are very pleased. Justice was served. We expected to win, but it certainly feels good to win as decisively as we did…It’s a very good day for our future.”
He went on to say, “…what Aereo was doing, was not about technology, it was about theft. Yes, it was a new technology and there’ll be others, but right now because of the Supreme Court ruling, people will have to pay for our content.”
REGAN: Joining me right now on the phone is the president and CEO of CBS, Les Moonves. Les, good to talk to you. You got some good news this morning from the Supreme Court.
Moonves: Absolutely, Trish. Good to talk to you as well. We are very pleased. Justice was served. We expected to win, but it certainly feels good to win as decisively as we did.
REGAN: What does this mean for the company? I mean, investors certainly like it. Stocks trading higher. What does this mean for you as you move forward?
MOONVES: Now, all it means is that we continue to get paid for our content. We will continue to do that. As we look forward, we’ve already said, we’re going to get – we’ll receive $2 billion by 2020 in retransmission fees. And all that’s important here is that broadcasters and cable content companies and everyone who’s involved with the content producing business gets paid appropriately for their content. And that somebody can’t come and take that content, charge for it, and not pay us back for that content. So it’s a very good day for our future.
REGAN: What would you have done had the court not ruled in your favor? I mean, what was the other card you could have played here if things had not gone as you had anticipated?
MOONVES: Trish, there were a lot of things we said we had the possibility of doing. We weren’t going to die or roll over and play dead. But the good news is we don’t have to deal with that. We had other alternatives, but we don’t have to do any of them, we don’t have to deal with any of them.
The other alternatives were feasible and we wouldn’t have been hurt drastically, but this is a good victory for us and, as I said, for our future, so that the future Aereos don’t come along and say we can teal content from the networks.
REGAN: I mean, it’s good question — when you think about the future, Les, there’s so much technological change that’s happening right now. Do you think that laws need to be strengthened? Does more need to be done to anticipate future Aereos?
MOONVES: Now, you know what? The truth of the matter is Aereo tried to present a case that we were against cloud, our content being in the cloud. Nothing could be further from the truth. We have changed drastically how we’re delivering content to our public. It’s now going through satellite, it’s going through telephone companies, it’s going online through companies like Netflix.
So we are moving along. No company like CBS would be as successful as it is without being technologically advanced and technologically savvy.
What this was, what Aereo was doing, was not about technology, it was about theft. Yes, it was a new technology and there’ll be others, but right now because of the Supreme Court ruling, people will have to pay for our content. And you will be able to get it in a variety of different ways, and that’s what is exciting for us.
REGAN: You know, Les, let me read for you an excerpt from the Aereo comments. The company is saying that today’s decision by the United States Supreme Court is a massive setback for the American consumer. They said, “Today’s decision clearly states that how the technology works does not matter” and that “this sends a chilling message to the technology industry.”
What message do you think this decision is sending to consumers and the tech industry?
MOONVES: By the way, it’s a massive setback for Aereo and Aereo only. Once again, their argument in front of the Supreme Court was truly to mislead the court into thinking that we were going to be hurting consumers.
What the consumer now gets is the highest quality programming, which costs us a lot of money to produce. And they will continue to get that. They will continue to get that.
What Aereo was doing was basically taking our technology and selling it to the consumer. Is that appropriate? No. The people that produce the content are the people who should be able to deliver the content to the American public. It shouldn’t be done by an illegal third-party.
REGAN: Let’s talk briefly about transmission fees. How much money do you think you’re going to be able to make in some of these retransmission fees and being paid for your content as we move forward down the road?
MOONVES: Right now, the system is very simple. The cable companies pay us transmission fees and then they give the public our content, the same with telcos and satellite companies. And a variety of sources online will be coming to deliver our product to the American consumer.
Once again, they have to come to us to get a license for that to do that. So, as a result, we will continue to deliver to the American consumer the NFL, “NCIS”, “The Big Bang Theory”, “CBS Evening News”, “60 Minutes”, et cetera. That’s what this is about, having people license our content and us delivering the content to the consumer. So this is very pro-consumer.
REGAN: Well, my thanks to you. CBS CEO Les Moonves, I appreciate you joining me on this decision.
House Energy and Commerce Committee leaders issued the following statements:
“While the court ruled that Aereo had overstepped, invention and innovation are at the heart of America’s global leadership in communications and technology development,” said full committee Chairman Fred Upton (R-MI). “This case underscores the mounting need to modernize the 80-year-old Communications Act, which serves as an important, yet outdated, framework for the communications industry. We will continue laying the groundwork toward a #CommActUpdate to bring our laws into the innovation era so that the United States can continue leading the world in developing groundbreaking technologies that drive job creation and support consumer choice, economic growth, and social discourse.”
“The Court’s decision reminds us that the complex communications and technology marketplace is constantly innovating and rapidly changing, and that nuances in the law can have a profound effect on content providers and consumers,” added Communications and Technology Subcommittee Chairman Greg Walden (R-OR). “Providing consumers with a vibrant and innovative content delivery system in the 21st century is an important objective of our #CommActUpdate. In that effort, we will carefully balance the competing marketplace interests to make sure that this industry continues to innovate, localism is preserved, and consumers ultimately come out on top.”
“The ABC v. Aereo case highlights the regulatory uncertainty that exists in the rapidly evolving video marketplace as a result of our country’s outdated communications laws,” said Communications and Technology Subcommittee Chairman Bob Latta (R-OH). “I look forward to working with Chairman Walden in engaging in a comprehensive review of the Communications Act to ensure our policies foster robust investment and innovation in the 21st century digital economy.”
SNL Kagan’s Robin Flynn: “Today’s Aereo decision protects not only the tens of billions of dollars broadcast networks and TV station owners have invested in programming content, but also the transmission of that valuable sports and video content over the air for the foreseeable future. It does not stifle multichannel operators’ continued strategic imperative to deliver licensed video content to consumers over multiple devices at the time of consumers’ choosing, with the goal of responding to how their subscribers prefer to watch video today. Innovation will no doubt continue in the video space.”
The American Television Alliance: “Today’s Supreme Court ruling means that retransmission consent reform is needed now more than ever. The decision is a reminder that broadcasters are interested in only one thing – protecting their government-sanctioned monopolies. The broadcasters’ business model, which places blackouts ahead of consumers, is devoid of competition or incentive to innovate. We encourage Congress to take advantage of the opportunity that the Satellite Television Extension and Localism Act (STELA) provides to update our video rules to the 21st Century, starting with retransmission consent.”
Noted Seeking Alpha: “Local broadcasters soar following Aereo verdict. Sinclair Broadcast (SBGI +14.1%), Media General (MEG +10.4%), E.W. Scripps (SSP +7.9%), Gray Television (GTN +7.5%), Meredith (MDP +4.3%), Gannett (GCI +3.8%), and Nextar (NXST +15.6%) are taking off after the Supreme Court ruled (by a 6-3 vote) Aereo’s TV streaming service is illegal. National broadcast network owners are generally showing more moderate gains.”
