As Aereo threatens to alter TV landscape, major networks promise a fight [telecom]

By Cecilia Kang, Washington Post, April 8

For consumers who want to cut their cable cord and get all of their
television from the Internet, there's been a major obstacle: It's hard
to get live sports and local news.

Now a Web start-up, called Aereo, is offering to remove that last
barrier with a simple method. It is using antennas to pick up
programming from public airwaves and then deliver shows into homes
that have a Web connection -- for as little as $10 a month.

Rest at: http://tinyurl.com/cvzembb

Neal McLain

Re: As Aereo threatens to alter TV landscape, major networks promise a
fight [telecom]

Further to my previous post on this subject: the current decision is
far from final. The current decision was the result of a 2-1 vote by
a three-judge panel of the United States Court of Appeals for the
Second Circuit. The plaintiffs will surely request a rehearing en
banc, and the loser in that proceeding will surely appeal to the
Supreme Court.

This case bears a remarkable similarity to the battles that the cable
TV industry fought 50 years ago. At the time, a number of program
suppliers had sued various cable TV companies on grounds that the
systems had "performed" their copyrighted works. The then-current
copyright law -- the Copyright Act of 1909 -- clearly did not provide
much guidance for the courts.

One of these cases, Fortnightly Corp. v. United Artists (1968),
reached the Supreme Court. In this case, United Artists Television,
as owner of the copyright on several motion pictures, had sued
Fortnightly Corporation, a cable television operator, alleging that
Fortnightly had "performed" several of United Artists' motion pictures
without permission. United Artists won the first round in District
Court. Fortnightly appealed; United Artists won again in the Court of
Appeals. Finally, Fortnightly appealed to the United States Supreme
Court; in a divided opinion, the Supreme Court reversed the Court of
Appeals and ruled for Fortnightly.

But the Court made it clear that it was not ruling on the merits of
the case; instead, it was merely refusing to write new laws. Justice
Potter Stewart delivered the opinion of the Court as follows:

"We have been invited ... to render a compromise decision
in this case hat would, it is said, accommodate various
competing considerations of copyright, communications,
and antitrust policy. We decline the invitation. That
job is for Congress. We take the Copyright Act of 1909
as we find it. With due regard to changing technology,
we hold that the petitioner did not under that law
'perform' the respondent's copyrighted works. The
judgment of the Court of Appeals is reversed."

The Court's decision was far from unanimous: five Justices voted for
reversal, three abstained, and one dissented. The lone dissenter,
Justice Abe Fortas, noted that the Court was not only reversing two
lower courts; it was also reversing a precedent which it itself had
set 40 years earlier in the case of a hotel which distributed radio
signals by wire to its guests:

"... the Court, speaking unanimously through Mr.
Justice Brandeis, held that a hotel which received
a broadcast on a master radio set and piped the
broadcast to all public and private rooms of the
hotel had 'performed' the material that had been
broadcast. As I understand the case, the holding
was that the use of mechanical equipment to extend a
broadcast to a significantly wider public than the
broadcast would otherwise enjoy constitutes a
'performance' of the material originally broadcast.
I believe this decision stands squarely in the path
of the route which the majority today traverses. If
a CATV system performs a function 'little different
from that served by the equipment generally furnished
by a television viewer,' and if that is to be the
test, then it seems to me that a master radio set
attached by wire to numerous other sets in various
rooms of a hotel cannot be distinguished."

Congress eventually enacted a new copyright law, the Copyright Act of
1976. This act imposed copyright liability on cable television
systems that carry radio or television broadcast stations. Copyright
liability applies to any tier of programming which includes one or
more broadcast stations.

The Act created a legal construct known as the "compulsory license"
for cable television systems. The compulsory license did two things:

- It guaranteed that cable systems had the right to "secondarily
transmit" broadcast stations without having to obtain copyright
clearance from the individual stations or from any program supplier.

- It established a system for collecting royalties from cable
operators and disbursing them to "claimants". The Copyright Office
identified the following groups of claimants: Program Suppliers
(movies, reruns, and specials); Sports; Public Television (PBS,
affiliates, and programmers); Broadcast (commercial networks and
stations); Devotional; Canadian; Noncommercial Radio (NPR and
affiliates); and Music (ASCAP, BMI, and SESAC).

Two government agencies were charged with the responsibility for
collecting and disbursing royalties:

- The Copyright Office, a unit of the Library of Congress, was
assigned the job of collecting the royalty fees and depositing them
into a trust fund in the United States Treasury.

- An independent federal agency known as the Copyright Royalty
Tribunal (CRT) received two assignments: establishing the fee schedule
and allocating the proceeds among the claimants. In the years since
1976, the CRT has been reorganized twice; its functions are now
performed by the Copyright Royalty Board (CRB), another branch of the
Library of Congress.

The cable TV industry has operated pursuant to this law ever since.
Under the regulations established by the Copyright Office, every cable
television system is required to submit a Cable Statement of Account
Form, accompanied by the royalty payment, semiannually.

How the Supreme Court eventually rules in the Aereo case is anybody's
guess. But it seems to me that the Second Circuit's panel has
assigned another job to Congress. Congress could, of course, simply
extend the existing compulsory license procedure to Aereo.

But if the cable TV proceeding is any guide, it'll be a decade before
the Aereo case is final.

Further reading:
- Fortnightly Corp. b. United Artists, 392 U.S. 390 (1968)
http://laws.findlaw.com/us/392/390.html
- WNET v. Aereo Inc., 2d Cir., No. 12-2786, 04/01/13
http://tinyurl.com/cms5bho

Neal McLain

Per Neal McLain:
I don't get it.

If a station is OTA in the first place, isn't the size of the audience
they are selling to advertisers an important asset to them?

That being the case, it seems like Aereo is simply increasing the size
of the OTA station's audience - at no cost to the station.


Only two things I can think of are:

- Raw greed. They figure they can get a few extra bucks out of this.
Kind of like the banks introducing automatic teller machines because
they saved money for the banks... and then realizing that they could
charge people for using them.

- Fast forwarding commercials. This seems the most logical to me...
but it's predicated on the percentage of OTA customers who do not know
from DVR.


Lacking further knowledge, my money would have to be on raw greed,
seasoned with stupidity.
--
Pete Cresswell

In article <r69tm8hs0afkmbkit...@4ax.com>,
This is almost certainly it. It's just like the networks charging
carriage fees from the cable operators -- they want these fees IN
ADDITION to the ad revenue.

They view Aereo as being like a cable or satellite operator, and think
they should have to pay for the content similarly. It's not an
outrageous position.

--
Barry Margolin, bar...@alum.mit.edu
Arlington, MA
*** PLEASE post questions in newsgroups, not directly to me ***

Not as important as the size of the carriage fees they can extract
from every cable subscriber in their market.

-GAWollman

--
Garrett A. Wollman | What intellectual phenomenon can be older, or more oft
wol...@bimajority.org| repeated, than the story of a large research program
Opinions not shared by| that impaled itself upon a false central assumption
my employers. | accepted by all practitioners? - S.J. Gould, 1993