Cross-posted on the Law Theories blog.

With Aereo’s upcoming oral argument before the Supreme Court, I’ve got tens of thousands of tiny antennae on the mind. The novelty—and, of course, the absurdity—of Aereo’s service makes it one of the more interesting copyright puzzles. Most of the issues with Aereo are repetitive of the issues with Cablevision, and debate abounds over whether the number of source copies matters and whether multiple transmissions should be aggregated. I’ve come to view these issues as red herrings. But there’s another red herring that I’d rather discuss here, and that’s whether a decision against Aereo would be the death knell to the cloud. After all, performances are transmitted from Aereo’s service to members of the public just like they are from some cloud computing services. So why shouldn’t we worry?

In my last post about Aereo, I unconcernedly claimed: “This case isn’t about the future of cloud computing companies—those services are protected by the DMCA.” Why we shouldn’t worry about the cloud is certainly in large part answered by the DMCA, but I want to take it a step deeper and show that, even without the DMCA, some cloud computing companies would not incur liability when content is transmitted from their services to members of the public. The key to understanding why such cloud computing companies are not infringers is the key to understanding why Aereo is an infringer, and this turns on application of the volitional conduct test—a test codified in DMCA, but which is applicable in any context where the Transmit Clause is implicated. The volitional conduct test provides us with a way to separate the Aereo-like goats from the cloud computing sheep.

Under the Transmit Clause, it is a public performance to (1) transmit a performance of a work (2) to the public.1 There is no doubt that a performance of a work is being transmitted with Aereo’s service, so (1) is not at issue. The issue is whether this transmission is “to the public,” which is a term of art. Whether a transmission is “to the public” does not depend on the place to which it is sent, and a transmission to a private place can be “to the public” nonetheless. What makes it “to the public” is the relationship between the sender and the receiver, and this relationship, naturally, depends on the identity of each party. When the relationship between the sender and the receiver is a public one, the transmission is a public performance. And when the relationship between the sender and the receiver is a private one, the transmission is a private performance.

In Aereo,2 the Second Circuit focused on the receiver for each transmission, concluding that when there is a one-to-one relationship between the source copy and the receiver, the performance is private—even if we presume that Aereo is the sender. I think this makes no sense. If Aereo is the sender and the subscriber is the receiver, then that relationship is a public one and the transmission is a public performance. The Second Circuit’s reliance on there being a unique source copy for each receiver was misplaced, for the Transmit Clause cares only about who is transmitting to whom. It says nothing about a source copy—and in fact no source copy is even needed to publicly perform via transmission.3 The issue is simply who is directly causing the transmission to occur. Until we know who is transmitting to the receiver, that is, until we identify the sender, we can’t know whether the relationship between the sender and the receiver is a public one such that it’s “to the public.”

Without fair use or the DMCA to fall back on, the Aereo appeal squarely presents the issue of who is directly causing the transmission when a performance of a work is transmitted from Aereo’s service to the subscriber. In other words, the case boils down to who is the direct performer in this scenario. If the subscriber is the direct performer, then the performance is private since the sender and the receiver are the same party and the transmission therefore is not “to the public.” If Aereo is the direct performer, then the performance is public since the relationship between the sender and the receiver is a public one and the transmission therefore is “to the public.” And whether Aereo is the direct performer turns on the volitional conduct test: Is Aereo’s volitional conduct sufficient such that it directly causes the transmission? I think the answer is clearly “yes,” and how I get there is by utilizing the only bright-line rule under the volitional conduct test.

The genesis of the volitional conduct test is the famous Netcom decision,4 penned in 1995 by District Judge Ronald M. Whyte of the Northern District of California. Pre-DMCA, Judge Whyte was faced with deciding the liability of Netcom, an internet service provider, for infringement taking place utilizing its system. Critically, “Netcom was not itself the source of any of the infringing materials on its system,”5 and the issue was whether it could be a direct infringer of the reproduction right nonetheless. Judge Whyte held that it could not: “Although copyright is a strict liability statute, there should still be some element of volition or causation which is lacking where a defendant’s system is merely used to create a copy by a third party.”6 Since “such copies are uploaded by an infringing user,” Judge Whyte continued, Netcom’s actions were not a direct infringement of the reproduction right.7

Judge Whyte acknowledged that copyright infringement is a strict liability tort, meaning that neither knowledge nor intent to infringe need be shown. However, strictly applying that strict liability to reproductions occurring in cyberspace “would hold the entire Internet liable for activities that cannot reasonably be deterred.”8 Grounded in the policy argument that “it does not make sense to adopt a rule that could lead to the liability of countless parties whose role in the infringement is nothing more than setting up and operating a system that is necessary for the functioning of the Internet,” Judge Whyte proposed a dichotomy between a passive conduit, which provides only dumb pipes used by others to copy, and an active participant, which takes affirmative steps to bring about the copying.9 And central to Judge Whyte’s holding that Netcom was a passive conduit was the fact that it was the users who uploaded the content to Netcom’s service in the first place.

The key to understanding Netcom and its progeny is to recognize that the volitional conduct test is not used to determine whether a service provider should be held directly liable in the first place. Instead, a service provider seeks Netcom immunity because, without it, it would otherwise be a direct infringer. The volitional conduct test is perhaps best understood in terms of causation: Even though, because of strict liability, every service provider that is the cause-in-fact of the copying is thereby a direct infringer, certain service providers are nevertheless not directly liable for the copying because their actions are sufficiently remote. Perhaps the leading iteration of the volitional conduct test comes from the Fourth Circuit in CoStar:

[T]o establish direct liability under §§ 501 and 106 of the Act, something more must be shown than mere ownership of a machine used by others to make illegal copies. There must be actual infringing conduct with a nexus sufficiently close and causal to the illegal copying that one could conclude that the machine owner himself trespassed on the exclusive domain of the copyright owner.10

The volitional conduct test has also been adopted by the Second and Ninth Circuits,11 as well as by several district courts.12 In fact, Congress baked Netcom immunity under the volitional conduct test right into the DMCA.13 For example, Section 512(c) grants a qualifying service provider immunity “for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider.”14 The Second Circuit in YouTube and the Ninth Circuit in Shelter Capital read this language very broadly, finding that even transcoding and indexing user-submitted content to facilitate its public playback was protected by the safe harbor.15 While Section 512(c) protects a service provider for many automated acts that occur after a user uploads content to the service, the one thing it doesn’t provide immunity for is content supplied by the service provider itself.

How the volitional conduct test operates in the cloud is demonstrated in the Hotfile case, where the district court stated:

Thus, the law is clear that Hotfile and [the owner] are not liable for direct copyright infringement because they own and manage internet facilities that allow others to upload and download copyrighted material. . . . [T]he website hotfile.com merely allows users to upload and download copyrighted material without volitional conduct from Hotfile or [the owner]. . . . [N]othing in the complaint alleges that Hotfile or [the owner] took direct, volitional steps to violate the plaintiffs’ infringement. There are no allegations, say, that Hotfile uploaded copyrighted material. Therefore, under the great weight of authority, the plaintiffs have failed to allege direct copyright infringement.16

Because neither Hotfile nor the owner had engaged in sufficient volitional conduct, by, for example, uploading the infringing content at issue, the district court found that they could not be held directly liable for the infringement that occurred. Contrasted with Hotfile is Tasini,17 where the Supreme Court held that a database provider was directly liable for violating the public distribution right for content that it had supplied and made available as part of its publicly-accessible database. Because the database provider had supplied the infringing content at issue, this was a sufficient condition for finding that it was a direct infringer.

The import of all this is that where the service provider itself supplies the infringing content that is publicly distributed, displayed, or performed, that service provider can claim neither Netcom immunity nor DMCA immunity. Supplying the infringing content is sufficient for finding that the service provider has directly caused the infringement to occur—but it’s not necessary for such a finding. In other words, if the service provider itself supplies the infringing content, then it is a direct infringer. But sometimes the service provider can also be a direct infringer even if it did not supply the infringing content. This happens when the service provider engages in other volitional conduct “with a nexus sufficiently close and causal to the illegal copying,” to borrow the Fourth Circuit’s phrase, such that it is not only the factual cause of the copying, but the legal cause as well.

For example, in Megaupload, the district court found that the plaintiff had alleged that Kim Dotcom’s infamous website “serves as more than a passive conduit, and more than a mere ‘file storage’ company.”18 Several facts, including Megaupload’s reward program where it paid users to upload content, meant that Megaupload had possibly crossed the line from being a passive conduit to being an active participant in the infringement. Similarly, in Usenet, the district court found that the bulletin board service was “not merely a ‘passive conduit’ that facilitates the exchange of content between users who upload infringing content and users who download such content.”19 The “active measures” and “active steps” engaged in by the defendants “transformed [them] from passive providers of a space in which infringing activities happened to occur to active participants in the process of copyright infringement.”20

Like all proximate causation analysis, the volitional conduct test involves both art and science, and courts engaging in it typically juggle somewhat-vague concepts of foreseeability and temporality with normative decisions about social justice.21 As Dean William Prosser, author of Prosser on Torts and Reporter for the Restatement (Second) of Torts, put it, proximate causation is “our more or less inadequately expressed ideas of what justice demands.”22 Exactly how much volitional conduct it takes for a service provider to cross the line from passive conduit to active participant, no one can say. The analysis is, necessarily, somewhat arbitrary. The only bright-line criteria that exists under the volitional conduct test is that of who supplies the infringing content. When it’s the service provider itself, the volitional conduct on the part of the service provider is sufficient to find it directly liable.

This past week, District Judge Dale A. Kimball of the District of Utah found that the plaintiffs were likely to succeed on the merits against Aereo because it “provid[es] paying customers with retransmission of copyrighted works.” And this gets to the heart of why Aereo should lose before the Supreme Court. Aereo has crossed the line from being a passive conduit to being an active participant because it supplies the very content that is available using its service. Presumably, this is at least part of the reason why Aereo does not argue that Section 512(c) gives it DMCA immunity. Aereo cannot maintain that the content residing on its service is “by reason of the storage at the direction of a user” because the content comes from Aereo itself. The subscriber doesn’t go to Aereo to upload the content he already has to the cloud; the subscriber goes to Aereo to get the content he wants but doesn’t yet have—content which Aereo itself supplies.

The reason why Aereo, and not the subscriber, is the direct performer is simple. Because of copyright’s strict liability nature, every party that is the cause-in-fact of the copying is a direct infringer unless some other doctrine absolves that party from direct liability. The volitional conduct test uses a proximate causation analysis to determine whether a party’s actions are sufficiently remote such that it should not be held directly liable for the infringement. While the metes and bounds of the volitional conduct test are imprecise, to say the least, there is one bright-line rule: When the service provider itself supplies the very content at issue, that service provider’s actions can never be sufficiently remote to absolve it of direct liability. Because Aereo itself supplies the very content at issue—by implementing and making available its system of tens of thousands of tiny antennae that receive and retransmit performances—Aereo is the identity of the sender. And since the relationship between the sender (Aereo) and the receiver (the subscriber) is a public one, the transmission is a public performance.

The argument that it is Aereo’s subscriber, and not Aereo itself, who is the sender is untenable. The Transmit Clause was enacted to capture any service doing exactly what Aereo does, namely, retransmitting a broadcast to the public by any means possible. The petitioners in Aereo do a great job of traversing the history of the Transmit Clause in their opening brief before the Supreme Court, but the short version is this: The Supreme Court had held in a pair of cases that a community antenna television system or a cable system that captured an over-the-air broadcast and retransmitted it to the public was not engaged in a public performance.23 Congress enacted the Transmit Clause to legislatively overrule these two cases, and the words Congress chose, namely, “any device or process” used to transmit a performance, leave no doubt that its concern was with the function of the device or process utilized to make the transmission—not the underlying technical details of the device or process itself.24

Aereo’s argument boils down to it claiming that, even though the Transmit Clause on its face applies to “any device or process” that transmits a performance to the public, its particular device or process is somehow so special under-the-hood that the Transmit Clause doesn’t reach it. The problem with this argument is that the Transmit Clause means what it says, and it’s no answer to say that Aereo is simply doing for a subscriber what he could do for himself. This was the Supreme Court’s reasoning in the two cases the Transmit Clause was enacted to overrule. And even if we accept the argument that Aereo’s subscribers are really lessees of its equipment, the outcome is the same. The test is volitional conduct, and the conduct that matters is the conduct that Aereo itself has actually engaged in. If Aereo’s own actions are sufficient to find it directly liable absent any lease relationship, then its own actions are necessarily sufficient to find it directly liable even with the lease relationship. Because unless there is also some agency relationship between Aereo and its subscriber—for example, if Aereo were the subscriber’s employee—then Aereo’s own actions are only attributable to itself.

Cloud computing companies need not be worried about the outcome of the Aereo appeal because these service providers will continue to be protected by Netcom immunity under the volitional conduct test or by DMCA immunity. Assuming such service providers are protected by the DMCA, there’s an expansive amount of volitional conduct they can engage in without losing their safe harbor. How much volitional conduct they can engage in without losing Netcom immunity is less clear, but what is clear is that when a service provider itself supplies the very content at issue, there is no immunity under either the volitional conduct test or the DMCA. If Aereo loses before the Supreme Court, as I believe they should, it won’t negatively affect cloud computing companies because there is no reason for the Court to look any further than the fact that Aereo supplies the very content at issue. If anything, the Court’s decision will further cement into place the one bright-line rule that there is with the volitional conduct test, and this clarity in the law will redound to the cloud.

Special thanks to Terry Hart and Jonathan Greenfield for their valuable feedback in drafting this post.

Follow me on Twitter: @devlinhartline

Footnotes

  1. See 17 U.S.C.A. § 101 (West 2014) (“To perform or display a work ‘publicly’ means– (1) to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or (2) to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times. *** To ‘transmit’ a performance or display is to communicate it by any device or process whereby images or sounds are received beyond the place from which they are sent.”). []
  2. See WNET, Thirteen v. Aereo, Inc., 712 F.3d 676 (2d Cir. 2013). []
  3. For example, live performances and television broadcasts can be captured and transmitted to the public even though the sender possesses no source copy. []
  4. See Religious Tech. Ctr. v. Netcom On-Line Commc’n Servs., Inc., 907 F.Supp. 1361 (N.D. Cal. 1995). []
  5. Id. at 1367. []
  6. Id. at 1370. []
  7. Id. at 1371. []
  8. Id. at 1372. []
  9. Id. []
  10. CoStar Grp., Inc. v. LoopNet, Inc., 373 F.3d 544, 550 (4th Cir. 2004). []
  11. See Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008); Fox Broad. Co., Inc. v. Dish Network L.L.C., Case No. 12-cv-57048, 2014 WL 260572 (9th Cir. Jan. 24, 2014). []
  12. See, e.g., Field v. Google Inc., 412 F.Supp.2d 1106 (D. Nev. 2006); Playboy Enterprises, Inc. v. Webbworld, Inc., 991 F.Supp. 543 (N.D. Tex. 1997); Playboy Enterprises, Inc. v. Russ Hardenburgh, Inc., 982 F.Supp. 503 (N.D. Ohio 1997); Disney Enterprises, Inc. v. Hotfile Corp., 798 F.Supp.2d 1303 (S.D. Fla. 2011). []
  13. See, e.g., H.R. Rep. 105-551(I), at *11 (“As to direct infringement, liability is ruled out for passive, automatic acts engaged in through a technological process initiated by another. Thus, the bill essentially codifies the result in the leading and most thoughtful judicial decision to date: Religious Technology Center v. Netcom On-line Communications Services, Inc., 907 F. Supp. 1361 (N.D. Cal. 1995).”); ALS Scan, Inc. v. RemarQ Communities, Inc., 239 F.3d 619, 622 (4th Cir. 2001) (“[T]he ultimate conclusion on this point is controlled by Congress’ codification of the Netcom principles in Title II of the DMCA.”). []
  14. 17 U.S.C.A. § 512(c) (West 2014). []
  15. See Viacom Int’l, Inc. v. YouTube, Inc., 676 F.3d 19, 39 (2d Cir. 2012); UMG Recordings, Inc. v. Shelter Capital Partners LLC, 718 F.3d 1006, 1016 (9th Cir. 2013). []
  16. Disney Enterprises, Inc. v. Hotfile Corp., 798 F.Supp.2d 1303, 1308 (S.D. Fla. 2011) (internal citations and paragraph break omitted). []
  17. New York Times Co., Inc. v. Tasini, 533 U.S. 483 (2001). []
  18. Perfect 10, Inc. v. Megaupload Ltd., Case No. 11-cv-0191, 2011 WL 3203117, at *4 (S.D. Cal. July 27, 2011). vacated pursuant to settlement, 2011 WL 10618723 (S.D. Cal. Oct. 11, 2011). []
  19. Arista Records LLC v. Usenet.com, Inc., 633 F.Supp.2d 124, 149 (S.D.N.Y. 2009). []
  20. Id. (internal quotations, citations, and brackets omitted). []
  21. See Mark Bartholomew & Patrick F. McArdle, Causing Infringement, 64 Vand. L. Rev. 675, 703 (2011). []
  22. Id. (internal quotations and footnote omitted). []
  23. See Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390 (1968); Teleprompter Corp. v. Columbia Broad. Sys., Inc., 415 U.S. 394 (1974). []
  24. See, e.g., H.R. Rep. No. 94-1476, at *63 (1976) (A performance occurs “either directly or by means of any device or process, including . . . any sort of transmitting apparatus, any type of electronic retrieval system, and any other techniques and systems not yet in use or even invented.”); id. at *64 (“The definition of ‘transmit’ . . . is broad enough to include all conceivable forms and combinations of wires and wireless communications media, including but by no means limited to radio and television broadcasting as we know them. Each and every method by which the images or sounds comprising a performance . . . are picked up and conveyed is a ‘transmission,’ and if the transmission reaches the public in [an]y form, the case comes within the scope of clause[] (4) . . . of section 106.”). []

About the author: Devlin Hartline

Devlin is a husband, father, and law geek (JD & LLM). He is currently an SJD candidate at Tulane Law in New Orleans, Louisiana, where he is writing his dissertation on copyright law. He is also a Mark Twain Copyright Fellow at the Center for the Protection of Intellectual Property at George Mason Law in Arlington, Virginia.

38 Comments

  1. I want Aereo to win because I think it’s completely silly that they can not offer a service to simplify access to something that’s already available for free on the airwaves.

    To discourage services like Aereo is to encourage solutions where all the signal processing happens in every user’s premieres (to avoid being called a “public performance”). This is redundant, requires far more equipment and bandwidth and is arguably very harmful to the environment (in terms of electrical costs of doing the same processing in millions of different houses can easily add up to hundreds of megawatts of overhead).

    • I’m not sure I follow your argument since, with or without Aereo, people still need to fire up their computers or televisions to watch. Nor does it explain why Aereo needs to be able to do things without a license. I’m all for avoiding redundancy–in fact, I see no legal reason why file lockers can’t use deduplication–but the issue here isn’t really about that. Nor is it about what somebody could do themselves. It’s about a service that provides copyrighted content to the public for a fee but without a license. Aereo is appropriating for itself a portion of the economic value of the copyrighted content. Other companies that retransmit such content, like my cable company, buy a license for the privilege. To my mind, it’s just straightforward free riding on Aereo’s part.

      • Aereo is not providing anything someone can’t do with their own hardware. Is someone free riding if they buy an antenna and digital encoder and stream TV that way? Why not? They are getting a service for free other people pay for.

        • I got a free movie rental from M-GO a couple of weeks ago, and I watched “Dallas Buyers Club” for free. While I got something of value for free, I wouldn’t call it free riding on my part since it was given to me as a perk to get me to use the service more (which is a fantastic service, by the way). And it wasn’t free riding on M-GO’s part since surely they have a license to publicly perform the film. But I think you’re looking at the wrong thing. My cable company retransmits broadcasts to me, and I pay them for the service. My cable company, in turn, pays for the privilege of rebroadcasting retransmission to me. My cable company sells me something of value–the content–and it reimburses the broadcaster for the valuable content that it retransmits to me. Aereo, on the other hand, sells people access to valuable content, but, unlike my cable company, it pays nothing for that content. That’s free riding.

          • I don’t think whether or not it is free riding has any bearing on legality…but a company that rents or sells antennas (or DVRs, or TVs, or slingboxes, for that matter) for consumers to install at home is just as a much a free-rider by this definition. They commercially exploit the broadcasters’ signals for profit, without paying anything to those broadcasters.

      • Basically, if Aereo becomes illegal, there are still other ways to get around paying a broadcast license, including the old fashioned way – antennas. Making Aereo illegal is going to encourage Aereo-In-A-Box devices (such already exist – like Slingbox, but they will become more mainstream). Companies that manufacture a box for $100-200 that sets up a streaming source in your own home. Here will be something that provides the same service Aereo provides but is plugged into a person’s outlet instead of in a data center.

        The problem is taking an analog AV siginal and encoding to a compressed digital form is compute intensive and takes a non-trivial amount of electricity. Just touch a Slingbox while it’s running – it is noticeably warm. If there are millions of such boxes running 24/7 in people’s homes, that’s consuming a ton of electricity doing the same exact computation in millions of different locations.

        Lets say they are at the coffeeshop and they want to watch some TV. So they log into their Aereo-In-A-Box device in their home to initiate streaming. This is easily possible. Bu streaming data from a last mile location is far more expensive in terms of bandwidth and infrastructure costs (more electricity!) then streaming from a data center.

        Basically, you can still avoid paying this licensing fee. Aereo already does some stupid shit to avoid blatantly violating copyright law. But making Aereo illegal encourages even more architectures that makes look Aereo look brilliant in comparison. And regardless, the end result in any case and broadcasters will not be getting their license fees anyway.

    • If it is free, then Aereo has to give what they intercept for free, right? Instead they charge a fee, monthly, with Bloomberg Television as a bonus (i.e.: Bloomberg Television is part of the Aereo package; hence, newstories about Aereo from the Bloomberg Newsroom are slanted and doctored). They (Aereo) are intercepting signals that are only deemed free inside the decoding device of one’s private dwelling. What is ironic is Aereo licenses Bloomberg Television, but not the others. If it is free, then [clients] don’t need Aereo, they can just use their own television set’s antenna.

      I find Aereo will not survive the SJC.

  2. Devlin, I think there are several problems with your analysis.

    First, by hinging your argument to whether or not the service provider supplies the content, in the case of Aereo, you open your argument up to concluding that Aereo does not infringe, if Aereo does not, in fact, supply the content. And as we’ve discussed elsewhere, there’s a very strong argument that Aereo does not supply the content.

    After all, if Aereo is, indeed, renting antennas to users, then those users are obtaining the content (that those users then store, and which those users subsequently retransmit) directly from the broadcasters’ primary transmission. Aereo is not a supplier of content, but rather, merely a supplier of equipment/systems.

    If you conclude that Aereo is a supplier in this case, then I think you also must conclude that if I rent an antenna on my rooftop (exclusively) to my neighbor, then I am supplying him with content, rather than him obtaining the content himself, directly from broadcasters. And I think that is a truly untenable conclusion.

    Second, by hinging your argument on whether or not a service provider supplies the content, you actually do implicate any cloud storage provider who actually sells (legally) content to users. For example, what you are saying is that if Amazon sells me an mp3, and copies it directly to my Amazon cloud drive for me, then Amazon requires a performance license, in addition to the license to sell copies, since I cna stream the content from their cloud drive. On the other hand, if Amazon sells me the file, but makes me upload it to my Amazon cloud drive, myself, then they don’t need a performance license, by your theory. (I’m not sure where you’d come out if Amazon provided me with a downloader that automatically uploaded the mp3 to my Amazon cloud drive, immediately upon download, after say I set an option to have it do such.) If not untenable, I think this is at least a pretty strange dichotomy, that is difficult to justify by the statute, and which also, at least, calls into question the legitimacy of your theory.

    (And this would be a general problem, in other contexts, such as cable RS-DVRs. In general, it strikes me as fundamentally problematic for you to focus to who supplies the content, without even considering the question of whether the supplier has a license/right to supply that content to the user.)

    Finally, I think your argument that Aereo’s user cannot tenably be the sender is fatally flawed, because your characterization of what the transmit clause was enacted to do is factually incorrect. The cases that the transmit clause was enacted to address were, as you note, about community antenna systems: systems in which a shared antenna was used to serve many different users.

    If you had asked Congress, at the time, whether the statute they drafted was either intended to, or in fact did, make it illegal for me to rent an antenna on my rooftop, exclusively, to one of my neighbors, I think the answer would have been a resounding and unambiguous “No.” That answer would not change if I rented 50 different antennas to 50 different neighbors. Such would have been viewed as fundamentally different from the shared antennas of cable systems. And that distinction is embodied in the Copyright Act’s distinction between public and private performances.

    (While I think it’s probably correct that, had Congress anticipated the development of technologies that allowed such individualized antenna approaches to be massively scaled and centralized so as to become substitutable for cable system, then Congress presumably would have adjusted the Copyright Act to bring such scaled systems within its purview, as if they were a cable system (while still protecting unscaled systems as non-infringing). The fact is, however, that they didn’t anticipate such, and I expect couldn’t have anticipated such 4 decades ago, and their attempt to frame the statute in technology-neutral terms was not sufficient to cover such a completely different paradigm.)

    We cannot simply ignore the technological details, as you suggest, because to do so would result in concluding that it is an infringement for me to rent an antenna on my rooftop — something that clearly cannot be reconciled with either the plain text of the statute (or Congress’s clear intent). That would be a truly untenable conclusion.

    • Great post sir!

      The idea that businesses that develop around the idea of making the free utilization of public broadcasts by will end at Aereo is absurd. That’s the fundamental thing. If free riding is what’s wrong here, why is it tolerated in many cases? Why is it okay to put use an antenna and bypass the license fee that pays significantly for the programming that the antenna receives? This is completely legal, and it is certainly free riding! Is it because it is a private individual doing the free riding? What about the company selling antennas and Slingbox-like devices? Are they not profiting from people perusing a free broadcast? Yet this is unquestionably legal, but Aereo’s service is not?

      I think the fundamental issue is there just something completely degenerate and unstable about a business where on one hand, you want to license a broadcast and on the other hand you broadcast this signal out to the public so that presumably they can acquire the signal without explicitly licensing it. It seems like the business model can only work if acquiring this signal is somehow impractical or inefficient, but there will always be entrepreneurs with new technology that reduce the impracticality. So what are we to do? Mandate a degree of technological inefficiency as a fact of the law? Force people to use 1970s style antennas so that broadcast licenses can continue to be sold? What?

    • Second, by hinging your argument on whether or not a service provider supplies the content, you actually do implicate any cloud storage provider who actually sells (legally) content to users.

      If the service is LEGALLY supplying the content because it has a license to publicly distribute/display/perform the content in the first place, then the service is not likely infringing for other acts. So, in your example, if Amazon sells you an mp3, then Amazon is exercising its licensed privilege to make a public distribution. Whether Amazon sends that mp3 directly to you, or whether it places it in the cloud for you to access later doesn’t likely matter. The initial transfer of the content from Amazon to you, a member of the public, was licensed. And this is the point I was trying to bring home in the other thread. Aereo has no license to publicly distribute or perform the content in the first place. Comparing it to services like Amazon, which has a license to publicly distribute or perform the content in the first place, doesn’t make much sense.

      Finally, I think your argument that Aereo’s user cannot tenably be the sender is fatally flawed, because your characterization of what the transmit clause was enacted to do is factually incorrect. The cases that the transmit clause was enacted to address were, as you note, about community antenna systems: systems in which a shared antenna was used to serve many different users.

      No, as I noted, the two Supreme Court cases were about CATV and cable systems, respectively, not just CATV. And, as I also noted, Congress wrote the Transmit Clause to be as broad as possible, encompassing ANY device or process that retransmits broadcasts to the public, not just CATV. In the last footnote, I quoted the House Report which shows that Congress wanted the Transmit Clause to be interpreted as broadly as possible: A performance occurs “either directly or by means of any device or process, including . . . any sort of transmitting apparatus, any type of electronic retrieval system, and any other techniques and systems not yet in use or even invented.” H.R. Rep. No. 94-1476, at *63. How do you read “any sort of transmitting apparatus” to mean only CATV? How do you read “any type of electronic retrieval system” to mean only CATV? How do you read “any other techniques and systems not yet is use or even invented” to mean only CATV? I think your view that the Transmit Clause was intended ONLY to cover CATV systems is completely untenable.

      • Simply speaking, Aereo is legal because there they simply a company that rents out antenna and Slingbox-like equipment to users as well as the service to maintain such equipment. That’s all they are doing.

        Obviously it’s legal to sell antenna and Slingbox-like devices, so it shouldn’t be illegal to rent them either.

        • Aereo is illegal because they are intercepting a transmission without paying any licensing fees for the copyrighted content and the syndicated copyrighted content that is licensed by the originating transmitting company (i.e. Fox (for example)). Aereo charges for the public display on a monthly basis (with Bloomberg Television as a licensed bonus) so that inside private homes and elsewhere assume it is a great innovation. Well, it’s not. If that is what Aereo wants to do with Barry Diller’s money pile, then they too have to abide by the rules of cable TV (i.e.: Comcast) and satellite companies (i.e. EchoStar) and pay for the licensing rights. That’s why it’s in the SJC so quickly.

      • If the service is LEGALLY supplying the content because it has a license to publicly distribute/display/perform the content in the first place, then the service is not likely infringing for other acts. So, in your example, if Amazon sells you an mp3, then Amazon is exercising its licensed privilege to make a public distribution. Whether Amazon sends that mp3 directly to you, or whether it places it in the cloud for you to access later doesn’t likely matter. The initial transfer of the content from Amazon to you, a member of the public, was licensed. And this is the point I was trying to bring home in the other thread. Aereo has no license to publicly distribute or perform the content in the first place. Comparing it to services like Amazon, which has a license to publicly distribute or perform the content in the first place, doesn’t make much sense.

        Devlin, we’ve been through the discussion respecting Amazon and a license to perform. Amazon launched their cloud drive service without a performance license, and based on the timing and the differentiated offers they make (of cloud drive free vs. premium), it is apparent that they later took a limited performance license (covering a subset of situations) specifically in order to get the benefit of using shared copies of music files to gain efficiencies and to compete with features Apple was offering, not because of any belief that they needed such in order to offer individualized storage lockers.

        For the point I am making, you need to consider Amazon (or an Amazon-like entity), having a license to sell copies, but no license to perform. The theory you describe in the post above, and what you have argued at length elsewhere, doesn’t distinguish between cases where the service provider has a right to transfer content to the subscriber, or not. Rather, it has expressed a strict rule: if the service provider “supplies” the content, then the service provider is the subsequent performer of transmissions. This implies that the service provider requires not just a copy license, but also a performance license.

        Are you now saying, by this comment, that if the service provider has a copy license, then the fact that the service provider “supplied” the content no longer counts, and any subsequent performance is a performance by the user, rather than the service provider?

        No, as I noted, the two Supreme Court cases were about CATV and cable systems, respectively, not just CATV.

        There is no distinction between CATV and cable. They both refer to the same thing. CATV is simply an older term, which was eventually supplanted by cable, as a newer term.

        And, as I also noted, Congress wrote the Transmit Clause to be as broad as possible, encompassing ANY device or process that retransmits broadcasts to the public, not just CATV. In the last footnote, I quoted the House Report which shows that Congress wanted the Transmit Clause to be interpreted as broadly as possible: A performance occurs “either directly or by means of any device or process, including . . . any sort of transmitting apparatus, any type of electronic retrieval system, and any other techniques and systems not yet in use or even invented.” H.R. Rep. No. 94-1476, at *63. How do you read “any sort of transmitting apparatus” to mean only CATV? How do you read “any type of electronic retrieval system” to mean only CATV? How do you read “any other techniques and systems not yet is use or even invented” to mean only CATV? I think your view that the Transmit Clause was intended ONLY to cover CATV systems is completely untenable.

        I don’t read it to mean only CATV/cable, and nothing I have said even remotely implies that.

        I think the language was intentionally broad, and is sufficient to cover many newer technologies, such as, over-ther-air rebroadcasting, satellite rebroadcasting, twisted pair rebroadcasting, fiber rebroadcasting — pretty much any technology that follows a broadcasting paradigm — as well as on conventional on-demand delivery systems (which they also were already anticipating).

        But that they intended to broadly cover new technologies doesn’t mean that they succeeded in covering every new technological development possible. In particular, if covering a new technology requires reading “any device or process” so broadly that it would read on an individual user, using an individual antenna to receive broadcasts, then there can be no question that reading is too broad.

        And you still haven’t dealt with this basic problem with your interpretation.

        Is it legal for me to offer to rent an antenna on my rooftop to any of my neighbors?

        If the answer is “Yes” then your argument falls apart, because there’s no way to distinguish that from Aereo’s rental of antennas. And of course, if the answer is “No” then your interpretation is obviously irreconcilable with what the transmit clause has been interpreted to mean for four decades now.

        You are effectively trying to interpret the language as if it reads “This covers anything new in the future which observers might reasonably guess that, if Congress had been aware of, Congress would have considered to be sufficiently similar to cable to write language to prohibit.”

        This is way too vague an interpretation of the statute. If Congress had written something that broad explicitly into the language, it would have long ago been ruled unconstitutionally vague. You can’t avoid that vagueness problem by interpreting what they actually did write to implicitly mean such.

        In other words, if the transmit clause means what you claim, then the whole thing is void for vagueness.

        Of course, precedent says that if a valid narrower interpretation is possible, then the courts should adopt the narrower interpretation, in order to save the statute. And that’s precisely what the courts should do: they should recognize that while “any device or process” can be read to include many technological changes, it can’t be presumed to be so broad as to automatically include every possible technological change and obviate the need for any detailed analysis, whatsoever. And in particular, it can’t be read to be so broad as to include the particular technological approach that Aereo is using, because to do so would render individual reception and retransmission infringing.

        The details do matter.

        • Devlin, we’ve been through the discussion respecting Amazon and a license to perform. Amazon launched their cloud drive service without a performance license, and based on the timing and the differentiated offers they make (of cloud drive free vs. premium), it is apparent that they later took a limited performance license (covering a subset of situations) specifically in order to get the benefit of using shared copies of music files to gain efficiencies and to compete with features Apple was offering, not because of any belief that they needed such in order to offer individualized storage lockers.

          For the point I am making, you need to consider Amazon (or an Amazon-like entity), having a license to sell copies, but no license to perform. The theory you describe in the post above, and what you have argued at length elsewhere, doesn’t distinguish between cases where the service provider has a right to transfer content to the subscriber, or not. Rather, it has expressed a strict rule: if the service provider “supplies” the content, then the service provider is the subsequent performer of transmissions. This implies that the service provider requires not just a copy license, but also a performance license.

          Are you now saying, by this comment, that if the service provider has a copy license, then the fact that the service provider “supplied” the content no longer counts, and any subsequent performance is a performance by the user, rather than the service provider?

          I don’t really understand why you want to talk about Amazon and not Aereo, but I’ll try and address your point. Let’s assume that Amazon has a license to publicly distribute the content, but not a license to publicly perform the content. Amazon sells me an mp3 (it’s probably a license, and not a sale, but I don’t think that distinction matters here). I think that Amazon can publicly distribute that copy to me by either (1) letting me download it, or (2) placing it in the cloud for me. Both of these are public distributions, and not public performances, because a public performance has a contemporaneous perceptibility requirement. Now, after Amazon has legally transferred the content to me, I can (1) play it back from the download, or (2) play it back from the cloud. I don’t think either one of these is a public performance. Why? Because it’s content that I have already legally acquired when Amazon made its public distribution to me. When I play it back from the cloud, I am streaming it to myself, so it’s a private performance. Why isn’t it Amazon? Because Amazon already publicly distributed the content to me in a legal manner. It’s not a “strict rule” that if the service ever provides me with any content then it’s always publicly performing should I stream that content. If the service LEGALLY provides me with the content in the first place, then it’s not the service that is the identity of the sender should I play that content back later by streaming it from the cloud. Aereo, of course, has no such license, so this doesn’t apply to Aereo.

          There is no distinction between CATV and cable. They both refer to the same thing. CATV is simply an older term, which was eventually supplanted by cable, as a newer term.

          And there’s no distinction in the Transmit Clause about whether the service uses one antenna for 500 subscribers, 500 antennae for 500 subscribers, or 500 antennae for one subscriber. You seem to think that the antenna being shared makes a difference, but I thought you mentioned earlier that you agree that the one-antenna-to-one-subscriber argument is a red herring. Or was it that you think the number of source copies doesn’t matter, but the number of antennae does? I’m confused about what your point is. Is the Transmit Clause written to be interpreted as broadly as possible, encompassing “any device or process” which retransmits broadcasts to the public? Yes. Does it say anything about whether one copy or 500 copies or one antenna or 500 antennae matters? No.

          I don’t read it to mean only CATV/cable, and nothing I have said even remotely implies that.

          I think the language was intentionally broad, and is sufficient to cover many newer technologies, such as, over-ther-air rebroadcasting, satellite rebroadcasting, twisted pair rebroadcasting, fiber rebroadcasting — pretty much any technology that follows a broadcasting paradigm — as well as on conventional on-demand delivery systems (which they also were already anticipating).

          But that they intended to broadly cover new technologies doesn’t mean that they succeeded in covering every new technological development possible. In particular, if covering a new technology requires reading “any device or process” so broadly that it would read on an individual user, using an individual antenna to receive broadcasts, then there can be no question that reading is too broad.

          Where in the Transmit Clause does it say that one-antenna-to-one-subscriber changes everything? It doesn’t. It speaks of transmissions made to the public. It says absolutely nothing about the source of those transmissions. There could be 500 antennae, one antenna, or no antenna, and the result is the same. The same goes for number of source copies.

          And you still haven’t dealt with this basic problem with your interpretation.

          Is it legal for me to offer to rent an antenna on my rooftop to any of my neighbors?

          If the answer is “Yes” then your argument falls apart, because there’s no way to distinguish that from Aereo’s rental of antennas. And of course, if the answer is “No” then your interpretation is obviously irreconcilable with what the transmit clause has been interpreted to mean for four decades now.

          Is your neighbor your friend or acquaintance? Then it’s not “to the pubic.” I distinguish the situation quite easily, using the actual text of the Transmit Clause. You can transmit content to your friends and acquaintances.

          You are effectively trying to interpret the language as if it reads “This covers anything new in the future which observers might reasonably guess that, if Congress had been aware of, Congress would have considered to be sufficiently similar to cable to write language to prohibit.”

          This is way too vague an interpretation of the statute. If Congress had written something that broad explicitly into the language, it would have long ago been ruled unconstitutionally vague. You can’t avoid that vagueness problem by interpreting what they actually did write to implicitly mean such.

          It’s not vague at all. Is the defendant using any device or process to transmit performances to the public? If yes, then it’s a public performance.

          Of course, precedent says that if a valid narrower interpretation is possible, then the courts should adopt the narrower interpretation, in order to save the statute. And that’s precisely what the courts should do: they should recognize that while “any device or process” can be read to include many technological changes, it can’t be presumed to be so broad as to automatically include every possible technological change and obviate the need for any detailed analysis, whatsoever. And in particular, it can’t be read to be so broad as to include the particular technological approach that Aereo is using, because to do so would render individual reception and retransmission infringing.

          It was meant to capture any device or process that transmits broadcasts to the public. Aereo is not an individual retransmitting to himself. It’s a service that receives and then retransmits broadcasts to the public—exactly the type of service the Transmit Clause was enacted for. I know you think the “rented” argument is a winner, but I think it’s meritless. It didn’t work for On Command or Zediva, and it won’t work here. Can I go to a movie theater, point 500 cameras at the screen, and then allow 500 paying strangers to watch the movie at home as it streams to their computers from their individualized camera? Of course not. Now change it so that I rent the cameras to the 500 strangers, but I still set them up and make them available. Does the outcome change? Of course not. Copyright infringement is a strict liability tort, and whether I’m a direct infringer turns on my actual conduct. In both scenarios, my conduct is exactly the same. The fact that in the second scenario the cameras are rented doesn’t change anything about the actual conduct that I actually engage in. If I’m an infringer for the first scenario, then I’m an infringer for the second one.

          • I don’t really understand why you want to talk about Amazon and not Aereo, but I’ll try and address your point.

            Seriously?

            My comments have talked, and continue to talk, extensively about Aereo. But you’re also making claims that your view has no implications for cloud providers. Heck, you even put “Why it doesn’t matter for the Cloud” in the title of your post. What’s more, in your prior response, you skipped over my first point relating to Aereo, to address my second point, about cloud providers.

            But then you question why I “want to talk about Amazon and not Aereo?”

            Give me a break.

            Now, after Amazon has legally transferred the content to me, I can (1) play it back from the download, or (2) play it back from the cloud. I don’t think either one of these is a public performance. Why? Because it’s content that I have already legally acquired when Amazon made its public distribution to me. When I play it back from the cloud, I am streaming it to myself, so it’s a private performance.

            Ok. I presume, then, that you must agree that if a cable provider were deemed to have legally distributed content to a consumer’s RS-DVR, then playback from the RS-DVR is a private performance by the consumer, rather than a public performance by the cable provider. Right?

            Why isn’t it Amazon? Because Amazon already publicly distributed the content to me in a legal manner. It’s not a “strict rule” that if the service ever provides me with any content then it’s always publicly performing should I stream that content. If the service LEGALLY provides me with the content in the first place, then it’s not the service that is the identity of the sender should I play that content back later by streaming it from the cloud. Aereo, of course, has no such license, so this doesn’t apply to Aereo.

            Frankly, I don’t understand why the identity of the sender would turn on whether the transfer/copy were legal. It seems to me that the identity of the sender should be immutable. That’s a different question vs. liability.

            For example, it seems to me that if A legally distributes content to B, and then B does something illegal with that content, then B is clearly the illegal actor, and A has completely clean hands, and has no liability.

            On the other hand, if A illegally distributed content to B, then A is the actor in, and has direct liability for, that illegal distribution. But once that distribution has actually occurred, B now possesses the content. And if B does something illegal with content B possesses, then B is still clearly the illegal actor. A might well have secondary liability under a theory of contributory or induced infringement, for having engaged in an illegal act that precipitated and enabled B’s subsequent illegal act, but that doesn’t make A the actor in the subsequent act.

            Why should the legal status of a prior act change the determination as to who the actor is, in a subsequent act?

            And there’s no distinction in the Transmit Clause about whether the service uses one antenna for 500 subscribers, 500 antennae for 500 subscribers, or 500 antennae for one subscriber. You seem to think that the antenna being shared makes a difference, but I thought you mentioned earlier that you agree that the one-antenna-to-one-subscriber argument is a red herring. Or was it that you think the number of source copies doesn’t matter, but the number of antennae does?

            I never agreed that either was irrelevant. Quite the opposite.

            In the various discussions we have had, there’s only one thing that’s been asserted to be a red herring: that was the issue of aggregation. And I didn’t argue with the assertion that aggregation might be a red herring, in the sense that I agree that we should be able to determine from a single instance whether the performance is public or private.

            That cuts both ways. It doesn’t matter whether we’re dealing with a single antenna delivering signals to a single user, or a million antennas delivering signals to a million users. If it’s illegal in the case of a million antennas offered to a million users, then it’s illegal in the case of a single antenna offered to a single user. Hence my point that your interpretation would hold it illegal to rent an antenna on a neighbor’s roof.

            Is the Transmit Clause written to be interpreted as broadly as possible, encompassing “any device or process” which retransmits broadcasts to the public? Yes. Does it say anything about whether one copy or 500 copies or one antenna or 500 antennae matters? No.

            Of course it doesn’t say that. But it says lots of other things, which you want to ignore in order to focus solely on the “any device or process” language as being the only language of any import.

            The transmit clause is not written to prohibit the rental of equipment/systems, so the interpretation of an act absolutely turns on whether or not the situation is an equipment rental. And whether there is a one-to-one relationship between equipment and users is critical to determining whether the situation is one of equipment rental.

            So it absolutely is relevant to consider the number of antennas being used, and it is absolutely incorrect to ignore such details on the basis that the “any device or process” language obviates the need for any further analysis, whatsoever.

            [jsg] And you still haven’t dealt with this basic problem with your interpretation. Is it legal for me to offer to rent an antenna on my rooftop to any of my neighbors? If the answer is “Yes” then your argument falls apart, because there’s no way to distinguish that from Aereo’s rental of antennas. And of course, if the answer is “No” then your interpretation is obviously irreconcilable with what the transmit clause has been interpreted to mean for four decades now.

            [dh] Is your neighbor your friend or acquaintance? Then it’s not “to the pubic.” I distinguish the situation quite easily, using the actual text of the Transmit Clause. You can transmit content to your friends and acquaintances.

            No. I said “any of my neighbors.” The limitation to neighbors was merely to make a simple example where it’s easy for them to connect their homes to my antenna. They’re not my not my normal circle of friends or social acquaintances, and you can’t depend on that to distinguish. I’m offering to rent an antenna to the public. It will ultimately be rented to exactly one person, but the offer is to (a public subset of) the public.

            It was meant to capture any device or process that transmits broadcasts to the public. Aereo is not an individual retransmitting to himself. It’s a service that receives and then retransmits broadcasts to the public—exactly the type of service the Transmit Clause was enacted for. I know you think the “rented” argument is a winner, but I think it’s meritless. It didn’t work for On Command or Zediva, and it won’t work here.

            You think it meritless, but citing two district court cases (one of which was considered and criticized in Cablevision) hardly makes for a compelling argument — and certainly not one sufficiently compelling that it justifies dismissing the rental view, out of hand.

            Can I go to a movie theater, point 500 cameras at the screen, and then allow 500 paying strangers to watch the movie at home as it streams to their computers from their individualized camera? Of course not. Now change it so that I rent the cameras to the 500 strangers, but I still set them up and make them available. Does the outcome change? Of course not.

            The trouble with this analogy is that it wouldn’t be legal for any of those 500 strangers to set up such a camera, themselves. But here we have a situation where it is absolutely legal for each of the users to set up the antenna for themselves. And if it is legal for them to set up the antenna themselves, then it would have to be a pretty strange theory for it to suddenly become illegal simply because a third party rents them the antenna, and sets it up for them.

          • Ok. I presume, then, that you must agree that if a cable provider were deemed to have legally distributed content to a consumer’s RS-DVR, then playback from the RS-DVR is a private performance by the consumer, rather than a public performance by the cable provider. Right?

            Right, because the subscriber is playing back content that he legally received when the cable company, whether by license or some other defense, publicly distributed it to him.

            Frankly, I don’t understand why the identity of the sender would turn on whether the transfer/copy were legal. It seems to me that the identity of the sender should be immutable. That’s a different question vs. liability.

            I uploaded a Word document to my OneDrive account this morning, and then I displayed it on my computer an hour later. Even though that document was displayed from the OneDrive servers, it was a document that I supplied to myself in the first place. I am the party that displays the content. It’s not a public display because I’m displaying my own content, which I legally acquired in the first place, to myself. If instead Microsoft places a copyrighted work in my OneDrive folder, then it’s not a document that I supplied to myself in the first place. It’s a document that Microsoft is supplying to me. Microsoft is the party that displays the content. It’s a public display because Microsoft is displaying content that it illegally supplied me with in the first place. The issue with the distribution, display, and performance right is whether they occur to the public. Whether something is to the public depends on who the sender is. Who the sender is depends, in part, on what’s being sent. When it’s content that the sender is illegally supplying to the receiver, then it’s to the public.

            That cuts both ways. It doesn’t matter whether we’re dealing with a single antenna delivering signals to a single user, or a million antennas delivering signals to a million users. If it’s illegal in the case of a million antennas offered to a million users, then it’s illegal in the case of a single antenna offered to a single user. Hence my point that your interpretation would hold it illegal to rent an antenna on a neighbor’s roof.

            Absolutely. If Aereo only has one antenna and one subscriber, and that subscriber is a stranger as to Aereo, then it is a public performance. That’s why the number of antennae doesn’t matter, and that’s why aggregating is unnecessary. Even one transmission from one antenna to one member of the public is a public performance.

            No. I said “any of my neighbors.” The limitation to neighbors was merely to make a simple example where it’s easy for them to connect their homes to my antenna. They’re not my not my normal circle of friends or social acquaintances, and you can’t depend on that to distinguish. I’m offering to rent an antenna to the public. It will ultimately be rented to exactly one person, but the offer is to (a public subset of) the public.

            If your neighbor is not a friend or acquaintance, then your transmission to him is to the public, and it’s a public performance. There are exemptions, I think, for apartment owners and such, but I don’t see how that wouldn’t be a public performance, rental or not. I just don’t buy the rental argument. I know you strongly disagree.

            The trouble with this analogy is that it wouldn’t be legal for any of those 500 strangers to set up such a camera, themselves. But here we have a situation where it is absolutely legal for each of the users to set up the antenna for themselves. And if it is legal for them to set up the antenna themselves, then it would have to be a pretty strange theory for it to suddenly become illegal simply because a third party rents them the antenna, and sets it up for them.

            Nothing strange about it when the Transmit Clause makes it an infringement of the public performance right to receive and then retransmit broadcasts to the public. People can erect antennae and receive broadcasts themselves. Services can’t middleman that for them without violating the Transmit Clause. The Clause was literally enacted to capture any such middlemen. Regardless, you did not address the substance of my argument, which is that even if we consider Aereo’s subscribers to be lessees of its equipment, that doesn’t change any of the actual conduct that Aereo engages in. And given strict liability, if Aereo is an infringer without the rental, then it is an infringer even with the rental. Unless the rental somehow erases Aereo’s actual conduct in bringing about the transmission, then the rental contract doesn’t matter.

          • If instead Microsoft places a copyrighted work in my OneDrive folder, then it’s not a document that I supplied to myself in the first place. It’s a document that Microsoft is supplying to me. Microsoft is the party that displays the content. It’s a public display because Microsoft is displaying content that it illegally supplied me with in the first place.

            How about Microsoft emails you a copyrighted work, that they do not have a license to distribute. You receive it at your Gmail address, so that it is stored in your Google personal email storage.

            By your theory, Microsoft is publicly performing the work when you log into Gmail and access your mail, on a Google server, through a web browser.

            That’s a pretty strange theory, and I don’t think you would find many (in fact, I doubt you would find any) courts that would agree that you accessing your personal email could possibly constitute a public performance, let alone a public performance by Microsoft. Sending the email to you, in the first place, could certainly be an illegal act attributed to Microsoft. And Microsoft might be secondarily liable for any subsequent act by you that infringes. But to say that Microsoft is the actor when you access your email, is very strange, indeed.

            And it’s no different if your email account happens to be at Hotmail (operated by Microsoft), rather than Gmail. The fact that they sent you an illegal file doesn’t change the fundamental nature of the email system or the fact that your email is yours, and accessing it is fundamentally a private act by you.

            Absolutely. If Aereo only has one antenna and one subscriber, and that subscriber is a stranger as to Aereo, then it is a public performance. That’s why the number of antennae doesn’t matter, and that’s why aggregating is unnecessary. Even one transmission from one antenna to one member of the public is a public performance.

            [...]

            If your neighbor is not a friend or acquaintance, then your transmission to him is to the public, and it’s a public performance. There are exemptions, I think, for apartment owners and such, but I don’t see how that wouldn’t be a public performance, rental or not. I just don’t buy the rental argument. I know you strongly disagree.

            (Yes, there’s an exemption for what are called master antenna (MATV) systems used to serve units within an apartment or hotel, where no direct fee is charged. This is an exception for a shared antenna, btw. Regardless, that is not the situation here.)

            Well, I’m glad that you’ve now at least established a consistent position: that you believe that rentals are illegal, across the board.

            That said, I don’t believe any court would agree with you that rental vs. ownership is a relevant distinction under the law — i.e., that it is legal to receive OTA broadcasts with an antenna you own, but not with an antenna you rent.

            Honestly, Devlin, I think you have fallen off a cliff in your analysis. Rather than acknowledge any problem with your theory — or even to merely acknowledge that, if Aereo were deemed to be an equipment rental, then it could be legal — you are arguing to conclusions that are completely implausible.

            I’ve made it clear before that I lack confidence that the courts will reach a correct conclusion in any given matter. But even I have sufficient confidence in the Supreme Court to be certain that, even if they do rule against Aereo, they certainly won’t outlaw the rental of equipment to receive and view television, in the process. Nor will they designate obviously private activities by individuals, such as an individual accessing his own email, to actually be public activities by third parties.

            The Supreme Court might fundamentally misunderstand the underlying technology (as Denny Chin did), or they might use a legal fiction (as they have certainly done before), or conceivably they might even come up with some compelling theory that even I could accept (stranger things have happened), to conclude that Aereo is not an equipment rental, and deem Aereo an infringer. But I would put the probability at zero that they are going to conclude that Aereo is merely an equipment rental, and then also conclude that Aereo infringes.

          • Regardless, you did not address the substance of my argument, which is that even if we consider Aereo’s subscribers to be lessees of its equipment, that doesn’t change any of the actual conduct that Aereo engages in. And given strict liability, if Aereo is an infringer without the rental, then it is an infringer even with the rental. Unless the rental somehow erases Aereo’s actual conduct in bringing about the transmission, then the rental contract doesn’t matter.

            Sorry, I neglected to address this.

            If Aereo is indeed a rental, then the user is the transmitter, and the performance is a private performance. Even if you were correct that Aereo is subject to strict liability for their involvement merely as a party renting equipment, there’s no underlying illegal act for them to be liable for, because private performances are not infringing.

          • How about Microsoft emails you a copyrighted work, that they do not have a license to distribute. You receive it at your Gmail address, so that it is stored in your Google personal email storage.

            By your theory, Microsoft is publicly performing the work when you log into Gmail and access your mail, on a Google server, through a web browser.

            That’s a pretty strange theory, and I don’t think you would find many (in fact, I doubt you would find any) courts that would agree that you accessing your personal email could possibly constitute a public performance, let alone a public performance by Microsoft. Sending the email to you, in the first place, could certainly be an illegal act attributed to Microsoft. And Microsoft might be secondarily liable for any subsequent act by you that infringes. But to say that Microsoft is the actor when you access your email, is very strange, indeed.

            And it’s no different if your email account happens to be at Hotmail (operated by Microsoft), rather than Gmail. The fact that they sent you an illegal file doesn’t change the fundamental nature of the email system or the fact that your email is yours, and accessing it is fundamentally a private act by you.

            If Microsoft sends it to my Gmail, then Microsoft distributes it by sending the email and I make a reproduction when I download that file from Gmail. If you subscribe to the making available theory of distribution, as I do, then Microsoft has publicly distributed the moment it sent me the email. If you believe that distribution requires actual dissemination, as some do, then Microsoft’s distribution is complete only when I download the file. I know you can keep cooking up hypos, but I’m trying to understand what it has to do with Aereo. Yes, I mentioned the cloud in the post, but that doesn’t mean I have all the answers to every hypo you throw out. I can try and answer them, but the truth is that there are some complicated hypos that don’t have clear answers. You can always find cases close to the line that are hard to analyze. I just don’t think Aereo is one of them, though.

            Well, I’m glad that you’ve now at least established a consistent position: that you believe that rentals are illegal, across the board.

            That said, I don’t believe any court would agree with you that rental vs. ownership is a relevant distinction under the law — i.e., that it is legal to receive OTA broadcasts with an antenna you own, but not with an antenna you rent.

            You can rent an antenna from Radio Shack, bring it home, install it on your roof, and receive broadcasts, and that’s not a public performance on Radio Shack’s part. I’m not saying that antennae can never be rented.

            Honestly, Devlin, I think you have fallen off a cliff in your analysis. Rather than acknowledge any problem with your theory — or even to merely acknowledge that, if Aereo were deemed to be an equipment rental, then it could be legal — you are arguing to conclusions that are completely implausible.

            I think you keep assuming my theory reaches conclusions that it does not, like with your new Gmail hypo. I would find your criticisms of my theory more persuasive if I felt like you understood my theory in the first. You keep saying that I must then believe X, Y, and Z, when I don’t. But, honestly, it’s only a theory. I’ve been working on it for a while, and I have much work left to do on it. I appreciate your feedback, though.

            I’ve made it clear before that I lack confidence that the courts will reach a correct conclusion in any given matter. But even I have sufficient confidence in the Supreme Court to be certain that, even if they do rule against Aereo, they certainly won’t outlaw the rental of equipment to receive and view television, in the process. Nor will they designate obviously private activities by individuals, such as an individual accessing his own email, to actually be public activities by third parties.

            What I think the Court will and should do is recognize that a service which captures and retransmits broadcasts is engaging in public performances. Aereo is in the content delivery business. Just like my cable company is when it captures and retransmits broadcasts to me through my cable line. My cable company can’t just say that I’m renting whatever parts of their system are supplying me with the retransmissions and then escape liability.

            The Supreme Court might fundamentally misunderstand the underlying technology (as Denny Chin did), or they might use a legal fiction (as they have certainly done before), or conceivably they might even come up with some compelling theory that even I could accept (stranger things have happened), to conclude that Aereo is not an equipment rental, and deem Aereo an infringer. But I would put the probability at zero that they are going to conclude that Aereo is merely an equipment rental, and then also conclude that Aereo infringes.

            If your rental theory even gets mentioned by the Court, I’ll be surprised. You seem to think this argument is the clincher, but the petitioners don’t even mention the argument in their opening brief. If the argument were so important, you’d think they would bother to at least mention it so that they could then rebut it. But they don’t. Regardless, let me ask you this: Do you think that, absent this supposed rental contract, Aereo is publicly performing?

          • Yes, I mentioned the cloud in the post, but that doesn’t mean I have all the answers to every hypo you throw out.

            Devlin, I said it before, and I’ll repeat it again: when you put forward a theory that you purport properly characterizes situations, I immediately look to see if I can find a simple scenario where it breaks. This is basic scientific method.

            And you have done the same thing through the course of this discussion, attempting to challenge my theories by raising examples of conventional VOD, Youtube, etc. I don’t complain when you do such. Rather, I show how my theory actually does classify those situations appropriately.

            I really don’t understand why you keep complaining, rather than either likewise demonstrating how your theory actually does classify these scenarios correctly, or acknowledging that there’s a problem with your theory.

            I’m not looking for “cases close to the line that are hard to analyze.” I’m looking for simple cases, where your theory produces absurd results. (It’s hard enough just to get you to acknowledge any problem with your theories even with simple scenarios that produce absurd results. I could hardly expect to make any progress whatsoever if I were focusing on constructing really subtle scenarios.)

            If your theory is valid, I shouldn’t be able to find simple scenarios that produce absurd results. But I consistently have no trouble doing such.

            If you think the simple cases I’m presenting to produce absurd results are hard to analyze because they’re close to some line, then I think that’s really just an indication of how flawed your theory is. These should not be hard cases. It should not be hard, for example, to recognize that you, and not Microsoft, are the actor when you access email in your gmail account, regardless of who sent you or what may be in that email.

            (Btw, I chose the example of email because, frankly, I think you are so stuck in a particular view of the systems that have been discussed to this point that you have difficulty appreciating what it means to have a system that actually dedicates resources to the user, for their exclusive personal use. I thought email might be an example that could get past that. Email also makes it very easy to separate the initial act from the subsequent act, where I also think you suffer from a very blurred view.)

            You can rent an antenna from Radio Shack, bring it home, install it on your roof, and receive broadcasts, and that’s not a public performance on Radio Shack’s part. I’m not saying that antennae can never be rented.

            Ok, I can rent an antenna from Radio Shack and install it on my roof.

            Can I rent an antenna from Radio Shack and install it on my neighbor’s roof? If my neighbor allows me to use his roof (either for a rental fee, or for free), does that render him the transmitter?

            If so, how can he be the transmitter, if all he did is to rent me space on his roof? And why does renting the roof render him the transmitter, but renting the antenna doesn’t render Radio Shack the transmitter?

            If not, then why does he suddenly become the transmitter if he happens to also rent the antenna to me, rather than Radio Shack?

            I would find your criticisms of my theory more persuasive if I felt like you understood my theory in the first. You keep saying that I must then believe X, Y, and Z, when I don’t.

            I’m not sure why you doubt my understanding, given that so far you have generally been confirming that you do see the various scenarios as I infer.

            In any case, all I can do is apply what you say. The most recent things you’ve said about your theory is, effectively, that if party A illegally distributes content to party B, then party A is not merely liable for any further actions taken with that content by party B, but party A is actually the actor in any further actions taken by party B. Based on examples we’ve gone through to date, it doesn’t matter, under your theory, whether party A has any ongoing relationship with either the copy of the content that was distributed or party B. (On the other hand, if party A legally distributed content to party B, then the identical further actions by party B are actions only by party B.)

            Then also, you don’t believe that a party who has any ongoing operational relationship with a system can be considered to be renting the system (unless, of course, it’s a DVR rented to a cable customer and located within their home — then it does qualify as a rental). And if such a party is deemed to rent their system, you still believe that any actions taken with that system is an act by them, rather than an act by the party renting the system. (Here I’ll confess that I don’t understand the theory behind your rental views. Frankly, I don’t think there is any theory behind it. I think it’s just what you believe, without any theory developed to support it. At a minimum, you haven’t shared with us any theory around such.)

            Have I got something wrong?

            My cable company can’t just say that I’m renting whatever parts of their system are supplying me with the retransmissions and then escape liability.

            You’re right, they can’t just say it. Those parts of the system also have to actually be consistent with a rental — i.e., something that can be allocated to you, for your exclusive use. The vast majority of the parts of cable systems can’t be validly characterized this way, because they are used as shared resources serving multiple users.

            But some parts can be validly characterized as rentals, like set-top boxes, for example. And that which can be validly characterized as such is not limited to parts of the system deployed inside your home, because there’s nothing about being deployed inside your home that is intrinsic to what it means to be rented. And when the cable company happens to locate equipment in its facilities, that gets allocated to your exclusive use just like a set-top box (and, btw, performs identical functions to a set-top box), it’s just as validly a rental as the set-top box.

            You seem to think this argument is the clincher, but the petitioners don’t even mention the argument in their opening brief. If the argument were so important, you’d think they would bother to at least mention it so that they could then rebut it.

            I would hardly draw any inference at all from petitioners’ lack of mention. That could be anything from an explicit choice not to mention it because they don’t have a good counter-argument, and don’t want to give voice to a strong argument against them, to simple incompetence. Based on petitioners performance to date (in both Aereo and Cablevision), I don’t give them much credit for the quality of either their analysis or their strategy.

            However, given that the Second Circuit likened Aereo to a customer’s own reception via a rooftop antenna (concluding that the private nature of the performance was no different where Aereo rented that rooftop antenna to the user), and given that Aereo already raised that argument, even in just their cert brief, it would certainly surprise me if SCOTUS does not consider either whether Aereo is a rental, or whether it is otherwise comparable to a rental, before reaching their decision.

            Regardless, let me ask you this: Do you think that, absent this supposed rental contract, Aereo is publicly performing?

            I really can’t answer the question definitively at this point, in part because there’s been nobody to argue the point at anywhere near the length you have (such that I would have a chance to evaluate opposing views on an equal footing). However, my expectation is probably not.

            The one thing I could say from the extensive discussions we’ve had is that I can appreciate your view that the public/private determination should be tied to the relationship between transmitter and the recipient (and your frustration that Second Circuit declined to determine who the transmitter was before characterizing the transmission as private). However, I’m not prepared to go so far as to definitively agree with that view (for lack of hearing any competing view), and I certainly can’t say that I can agree with most of your other arguments or conclusions.

            In particular, your argument that the volitional-conduct test classifies Aereo as the performer strikes me as most likely misguided, and certainly far from compelling. At a lay/common sense level, the volition that Aereo has exercised in their system is no different from that exercised by any manufacturer of comparable equipment a user might purchase and install at home. And while you argue that Aereo’s volition renders them the supplier of content, none of the volition they do exercise goes to selection of content. The broadcasters exercise volition in selecting which content to broadcast, and the users exercise volition in selecting which content to watch and record, but Aereo is completely passive when it comes to any selection of content.

            Your argument that Aereo exercises volition strikes me as predicated primarily on just your fundamental belief that it is so, rather than any cogent theory or argument that an objective observer would agree classifies them as such.

            In fact, the only thing I can find to distinguish Aereo’s volition in designing the system from manufacturers of comparable home systems is not in content selection, but rather in their decision to geo-fence the regions in which users can receive content. (For anybody who is not aware, Aereo limits reception to the DMA (Designated Market Area) of the TV stations in any given region.) So, for example, you can only view NYC stations in the NYC DMA.

            Presumably, they did this in an attempt to simplify their case, and perhaps even to be a bit more broadcaster-friendly. (One of plaintiffs’ arguments in attacking them has been that, if their system is legal, there’s nothing to stop them from delivering content across DMAs, thereby undermining the current commercial segmentation of certain OTA broadcast content among DMAs.) Wouldn’t it be ironic if that one piece of volition became the basis for concluding that they were actually the responsible actor in these transmissions. ;) (If that were the case, of course, it would be an easy defect for Aereo to cure.)

            So if volition is indeed the critical factor, as you seem to argue, I’m inclined to think it far more likely that Aereo lacks the requisite volition, than that it exercises such.

            In essence, I have primarily argued my position from the standpoint that Aereo constitutes an equipment rental (perhaps because that’s particularly simple for me to understand as a lay person), but it appears to me that there is probably a corresponding argument that doesn’t depend on explicitly classifying them as a rental, but rather, depends merely on concluding that system is equivalent to the case where it were a rental, or where the user actually owned the equipment (in a way that a cable system equivalent, merely using a newer technology, could not be), and represents a technological advancement in private reception of television, rather than a technological advancement in public distribution of television.

          • Your argument that Aereo exercises volition strikes me as predicated primarily on just your fundamental belief that it is so, rather than any cogent theory or argument that an objective observer would agree classifies them as such.

            Let’s try this…

            Scenario I: No Rental

            1. Aereo designs system of tens of thousands of tiny antennae which exists for no purpose other than to receive and retransmit broadcasts
            2. Aereo spends millions of dollars and implements system
            3. Aereo permits members of the public to sign in and use the system to retransmit broadcasts

            Scenario II: Rental

            1. Aereo designs system of tens of thousands of tiny antennae which exists for no purpose other than to receive and retransmit broadcasts
            2. Aereo spends millions of dollars and implements system
            3. Aereo permits members of the public to sign in and use the system to retransmit broadcasts
            4. Aereo calls these members of the public lessees instead of subscribers

            In both scenarios, Aereo’s own actions are precisely the same. Its actual conduct doesn’t change. You agree that in Scenario I, Aereo is probably an infringer. My point is that if Aereo is an infringer in Scenario I, then it must be in Scenario II as well. Why? Because of the volitional conduct test, which looks at a party’s actual conduct in bringing about the infringement. Since Aereo’s conduct hasn’t changed from Scenario I to Scenario II, its liability hasn’t changed either.

            And this was the point I was trying to make above about my hypo with the 500 cameras pointed at the movie screen. You got hung up on the fact that it’s not legal in the first place, but that missed the point. My question was whether I am a direct infringer when I go to a movie theater, point 500 cameras at the screen, and allow 500 strangers to stream the movie from their individualized camera. I think we both agree that clearly I am a direct infringer of the public performance right in this hypo. But what if I then have a contract with the strangers that says the equipment is merely rented? Am I a direct infringer in that scenario? I think the answer is “yes,” and it’s because my own actual conduct has not changed. I still brought 500 cameras to the theater, pointed them at the screen, and made them available to 500 paying strangers. The claim of a rental doesn’t erase any of my actions.

            So, no, it’s not “predicated primarily on just [my] fundamental belief that it is so.” It’s based on many arguments that I’ve provided you with, including this one. I’ve provided lists of criteria, answers to hypo after hypo, theory, statute, congressional history, case law, etc. I’ve tried to address your concerns as best I can, and you keep pretending like I haven’t said anything. Thanks for the chat, Jonathan, but I think we’re past the point of diminishing returns here so I’m bowing out.

          • You agree that in Scenario I, Aereo is probably an infringer.

            I have never agreed to any such thing. In fact, in my last post I responded to a direct question as to whether I agreed to such by saying:

            I really can’t answer the question definitively at this point…However, my expectation is probably not.

            and then proceeding to lay out the basic problems I see with your theory of volitional-conduct.

            How you extract from this the notion that I agree with you on scenario I is as baffling to me as how you extract, or reconcile, most of your other conclusions about these cases.

            …I think we’re past the point of diminishing returns here…

            On this much, I do agree.

            It will certainly be interesting to see how SCOTUS illuminates the issues involved.

          • I have never agreed to any such thing.

            Mea culpa. When you said “probably not,” I thought you meant “probably not legal.”

            I’ve enjoyed the back and forth here and in the other threads, so thank you for that. I’m excited to see which way it goes… Should be interesting either way.

          • At least one mystery solved. :)

            Fyi, Time published an interview with Aereo CEO Chet Kanojia today, in which he carefully states twice that they “lease the antenna” and “lease the technology” to the consumer. I would expect that such foreshadows that at least part of Aereo’s argument in their brief will be a direct assertion that what they are offering is an equipment rental. Accordingly, I’d guess there’s a good chance we’ll see SCOTUS end up addressing that issue dead on (along with some of the other issues we’ve discussed).

          • The SG amicus brief is out today. I expect we’ll both agree that their view is implausible, inasmuch as they argue that Aereo infringes, but Cablevision does not. They pretty much adopted Cablevision’s (the company) viewpoint, wholesale.

            Interestingly, their argument effectively turns on concluding that Aereo doesn’t qualify as equipment rental. The trouble is, the rationale they give for why Aereo isn’t an equipment rental applies equally to Cablevision and cloud computing services, which they proceed to implicitly argue are, indeed, tantamount to equipment rental.

            A more detailed review, and link to the brief, can be found here:

            http://cimc-greenfield.com/2014/03/03/us-government-sides-with-broadcasters-on-aereo-contradicting-itself-in-the-process/

        • Interesting conversation.

          IANAL, but it seems to me that copyright law is far too complicated and ambiguous. It seems written in a way that makes it far too easy to draw out bizarre conclusions when you factor in how computers and the Internet operate. It shouldn’t be this hard to interpret a law that applies to pretty everyone’s computer usage. It’s good that Congress is apparently considering what seems to be a ground-up rethinking of the entire system. It seems sorely needed. I hope Aereo brings some more clarification, but I feel it’s really a pretty minor case in the grand scheme of things.

  3. It’s also interesting to perhaps compare this case with Kirtsaeng.
    - In both cases we have a petition by major conglomerations of copyright holders.
    - Both cases, the petitioners have a legitimate case that the responder’s actions can or have harmed their business. With Kirtsaeng, it’s easy to see that if you saturate the US market with far lower margin books from India or China, that the textbook markers will make much less money. With Aereo, it enables people to bypass paying a broadcast fee which entirely amounts to a non-trivial amount of a broadcaster’s revenue stream. The Supreme Court mocked the book publishers’ argument of lost business as an attempt to build a “parade of horribles”.

    • I might ask: if it (Areo’s model) were legal…why then do cable companies pay licenses for essentially the exact same thing?
      The only difference is the “tiny antennas”… that seems to me a very thin workaround/loophole to the spirit of the law, if not the word. If they didn’t have individual ‘antennas’ (which in essence is primarily a server with a “special” component) would it still be legal in your eyes? And if in fact the court deems this sort of thong fair play, you can bet your arse that ‘free’ TV will become a thing of the past…essentially making Aereo illegal once more…(and in the process screwing over everyone who relies on over the air broadcast) .. so, basically, no matter the outcome of the trial, Aereo will need a license to operate… If you enjoy over-the-air broadcast.. i would think carefully on which horse to back!

      • That cable companies don’t do it says nothing either way of legality, for a variety of reasons. And posturing for negotiating purposes aside, even if ruled legal, cable companies won’t adopt Aereo-style delivery anytime soon, because it’s still too inefficient to scale the technology to the kind of masses that cable companies serve. (In fact, even Aereo has issues serving its existing, relatively small, base representing roughly 0.25% of TV households.)

        Whether what Aereo does violates the spirit of the law is irrelevant. It’s the word of the law that’s enforced, not the spirit. (We could find all kinds of examples of things that arguably do violate the spirit which are legal, or which don’t violate the spirit, but nonetheless are illegal — and for lots of different laws.)

        There’s a good chance that if Aereo prevails, Congress will intervene to change the law. I expect there’s a much smaller chance than broadcasters suggest that an Aereo win would result in channels/content migrating away from over-the-air broadcasts much faster than they otherwise would. But the fact is, content has been migrating away from OTA broadcast for years, and that process is likely to continue, either way.

        So far as OTA broadcasts going away altogether, from a policy perspective, there’s a strong argument that such would be a good thing. Latest figures I’ve seen say just 12% of population use OTA broadcasts at all, and just 8% use only OTA broadcasts. This represents a tremendous subsidy by the vast majority who don’t use OTA broadcasts, both in that the remaining 92% actually pay to support content that the remaining 8% don’t, and more importantly, that an enormous amount of bandwidth, which could be put to much better use, is tied up supporting an aged, highly inefficient technology that only a tiny fraction of people still use.

        We’d be much better off as a society if broadcast TV channels did indeed migrate to cable, freeing up a huge swath of bandwidth for better and higher uses.

        • Agreed. They might as well make a law that forces you to use an antenna like this. The whole business model revolves around the idea that OTA broadcasts are inconvenient to receive. But antennas get smaller and more sensitive. Wouldn’t be surprising within the next five years a combination high sensitivity antenna and Slingbox could fit into the size of a USB flash drive (see Google’s Chromecast today), something overall cheaper then Aereo while still providing a similar service. So even if the broadcaster’s win, it would be a Pyrrhic victory.

          It makes far more sense to get rid of the OTA broadcasts and give that bandwidth to wireless companies who are seriously hitting up against some physical laws while increasing capacity. They facing a real bandwidth shortage, and there is far too little of it left.

      • I didn’t mention the difference as I see it between Kirtsaeng and Aereo. They are both cases of “loopholes”, which the petitioners thought both exploited.

        - Kirtsaeng was utilizing a rather novel business model in which he would buy books from South Asia and resell them in the USA for a profit. Assuming the SC put a stop to this (which they didn’t, they sided with Kirtsaeng), that would be the end of this kind of business.
        - Aereo’s business model is in a long line of businesses such as antenna manufactures and Slingbox which make money enabling people to avoid paying for a broadcast license. That’s important: making money by enabling people to bypass the broadcast license is NOT novel. If SC makes a decision for or against Aereo, it would not put an end to people avoiding the payment of a broadcast license or companies that make money enabling this. It would an entirely technical decision actually.

        The issue here is that broadcasters are putting this stuff into the airwaves with the implicit idea that people can access it for free. There are companies who make loads of money manufacturing things to receive and process these broadcasts for decades.

        If the SC rules against Aereo, which I think is unlikely considering Kirtsaeng, it would not end their business either. They could simply ship those tiny antennas to people’s homes and continue business as usual. The end result is equivalent (sans increased electrical usage) – broadcasters don’t get their license fee. Here is an idea: if you want to charge for access to a signal, don’t broadcast it in plain view over the airwaves. That’s just the fundamental thing here.

        • The issue here is that broadcasters are putting this stuff into the airwaves with the implicit idea that people can access it for free.

          No. The broadcasters have an FCC License to utilize a specific hertz location of the spectrum to transmit licensed content with the knowledge that people have to purchase a regulated device that decodes the signal for private use. Aereo has no FCC License, and is charging a monthly fee for the interception of the signal simply to bypass the regulation through this Silicon Valley BS concept of “disruption” to lag time in their favor. Well, as you will see after the SJC, Aereo is finished. The case-law, statutes and FCC regulations are clear.

          • Will you eat your hat if the SJC rules in favor of Aereo?

          • It’s not like the broadcasters wouldn’t have any recourse either. They can simply shut off the OTA broadcasts and sell the bandwidths for billions of dollars to wireless companies. Which I don’t understand why did haven’t already. Just stop broadcasting!

            It would be better for the industry if these broadcasts went away. Personally I don’t like the idea of people “free riding” off of these signals to begin with, contributing nothing and potentially making broadcast licenses more expensive for people with cable services. I could care less if they are doing it “privately”. It’s a pointless distinction. They are still free riding.

          • I think the concern over free-riding is misplaced. Let’s remember that the broadcasters were granted their broadcast licenses at no charge, in exchange for agreeing to provide free (advertising-supported) broadcasts to the public. And let’s also remember that while retransmission fees are a fast-growing revenue source for broadcasters, the vast majority of their revenue still comes from advertising. On average, those who use OTA reception (or Aereo, for that matter) almost certainly have many fewer non-broadcast channels/sources of television, and therefore, spend a higher percentage of their time viewing broadcast channels, compared to non-OTA viewers. And those receiving OTA broadcasts directly are probably much less likely than average to use DVRs, so much less likely to skip ads. Accordingly, these viewers are probably, in reality, significantly higher-than-average value viewers for the broadcast networks.

            My view regarding such “free-riding” would actually be the opposite: that the retransmission consent regime is wrong-headed (in addition to having ended up being a broken policy that has dramatically harmed consumers). If broadcast channels want to collect subscription fees in addition to advertising, they should be required to give up the extremely valuable broadcast spectrum that they were given for free, because collecting such fees violates the social contract they made to get that spectrum, in the first place.

          • Thanks, I didn’t realize they got the spectrum for free (with conditions). Now it all makes a lot more sense.

  4. The SG brief JS Greenfield links to makes the same kind of argument you seem to make here, that the question of whether a communication from person A to person B is a transmission to the public depends somehow on whether person B has some pre-existing external right to “gain access to” (in the SG’s words) the content of the communication. As you say, “When it’s content that the sender is illegally supplying to the receiver, then it’s to the public”.

    I can see why rights-holders find the idea attractive, but I don’t see any legal or policy justification for bringing the question of authorisation/consent to “access” content into the test for infringement for this particular right when in all other cases it’s dealt with as a defence of licence/implied licence. In particular, this doesn’t fit with the traditional concept of copyright as a bundle of exclusive rights. What’s the right being argued for here – an author’s exclusive right to engage in or authorise the unauthorised transmission of his or her works to people who aren’t authorised to access it? That doesn’t make sense.

    This approach, of broadening the performance right so that it covers basically anything done online then trying to avoid some of the more obviously absurd results through a novel quasi-licence doctrine, brings to mind the recent EU decision on the Swedish Svensson case. In Svensson the CJEU decided that merely publishing a hyperlink to online material constituted communication of the linked material to the public, but then pulled back a bit by deciding that if the linked material was online legitimately the communication was not to a “new public”, which meant that it fell outside the EU making available right. The CJEU’s reasoning in Svensson is techologically illiterate and much sillier that anything likely to come out of Aereo (hopefully), but at least the “new public” test comes from the wording of the copyright directive. What I don’t see in either your article or the SG’s brief is any authority for reading a corresponding “new public” test into the transmit clause, or any explanation of why an extremely broad performance right with a vague quasi-licence figleaf is good policy.

    This is a problem because, if the Court decides to broaden the performance right without also coming up with some kind of “new public” test, then the arguments that you and the SG make about other cloud providers being safe falls down. Netcom and the DMCA safe harbour will still be there, but everything a cloud provider does will be much closer to direct infringement and much closer to losing their immunity.

    That’s not to say I think Aereo should get away with their absurd multi-antenna contrivance. I just hope that the court doesn’t let a bad case make bad law.