American Broadcasting Cos., Inc. v. Aereo, Inc, 573 U.S. 431 (2014), was a United States Supreme Court case. The Court ruled that the service provided by Aereo, which allowed subscribers to view live and time-shifted streams of over-the-air television on Internet-connected devices, violated copyright laws.
Background
Cable companies are required by the 1992 Cable Television Consumer Protection and Competition Act to negotiate for retransmission consent, usually paying broadcasters for the right to carry their signals. Broadcasters argued that Aereo was a threat both to their business model by undermining the cable retransmission fees and the size of their audience. Because the fees that cable companies paid for broadcast content could comprise up to 10% of a broadcaster's revenue, broadcasters objected to Aereo's re-distribution of this content without paying any fees. Broadcasters have also identified Aereo as part of the cord-cutting trend among television audiences that poses a threat to broadcasters' advertising revenue.
In somewhat similar cases, the U.S. District Court for the Central District of California granted an injunction against Aereo's rival FilmOn, a similar service. However, the district court's injunction was legally binding only in its jurisdiction (including the West Coast of the continental United States, Alaska and Hawaii) and is currently being appealed to the Ninth Circuit Court of Appeals. Other competitors were blocked from providing service in Los Angeles and Seattle by similar injunctions.
Federal court
On March 1, 2012, two weeks before Aereo's initial launch in New York City, Aereo was sued for copyright infringement by a consortium of major broadcasters, including CBS Corporation's CBS, Comcast's NBC, Disney's ABC and 21st Century Fox's Fox. The broadcasters argued that Aereo infringed their copyrighted material because Aereo's streams constituted public performances. They sought a preliminary injunction against the company. On July 11, Federal Judge Alison Nathan denied this injunction, citing as precedent the 2008 Cablevision case, which established the legality of cloud-based streaming and DVR services. In response to the decision, the Aereo founder and CEO, Chet Kanojia, said, "Today's decision shows that when you are on the right side of the law, you can stand up, fight the Goliath and win." In a subsequent interview with CNET, Kanojia asserted, "With one step, we changed the entire TV industry. The television industry and its evolution are now starting towards the Internet and that was stopped until Aereo came along.... And I think as consumers start migrating to the Internet, new programming and new content are going to come in."
Second Circuit appeal
The plaintiffs appealed the decision to the U.S. Court of Appeals for the Second Circuit. Several other players in the industry, such as cable provider Cablevision, the Electronic Frontier Foundation, and the Consumer Electronics Association, filed amicus briefs. On April 1, 2013, the federal appeals court upheld the lower court's ruling by finding that Aereo's streams to subscribers were not "public performances" and thus did not constitute copyright infringement. The appeals court also affirmed the earlier district court decision that denied the broadcasters a preliminary injunction against Aereo. In response, News Corporation Chief Operating Officer Chase Carey stated that the company is contemplating taking Fox off the air and converting it to a cable-only channel: "We need to be able to be fairly compensated for our content... we can't sit idly by and let an entity steal our signal. We will move to a subscription model if that's our only recourse." Univision and CBS have also stated that they may also follow and convert to cable-only.