Aereo is not simply an equipment provider. Aereo sells a service that allows subscribers to watch television programs, many of which are copyrighted, virtually as they are being broadcast. Aereo uses its own equipment, housed in a centralized warehouse, outside of its users’ homes. By means of its technology, Aereo’s system “receive[s] programs that have been released to the public and carr[ies] them by private channels to additional viewers.”
The Court agreed with broadcasters that Aereo's service violated the "transmit" clause of the amendments to the 1976 Copyright Law.
The Act now clarifies that to “perform” an audiovisual work means “to show its images in any sequence or to make the sounds accompanying it audible.”§101. Thus, both the broadcaster and the viewer “perform,” because they both show a television program’s images and make audible theprogram’s sounds.
...Congress further created a complex licensing scheme that setsout the conditions, including the payment of compulsory fees, under which cable systems may retransmit broadcasts to the public. §111.Congress made all three of these changes to bring cable system activities within the Copyright Act’s scope.
The Court rejected Aereo's arguments that the role of the individual user of its service distinguishes it from the CATV systems that Congress sought to regulate. The Supreme Court didn't buy it.
Aereo claims that because it transmits from user-specific copies, using individually-assigned antennas, and because each transmission is available to only one subscriber, itdoes not transmit a performance “to the public.” Viewed in terms of Congress’ regulatory objectives, these behind-the-scenes technological differences do not distinguish Aereo’s system from cable systems, which do perform publicly. Congress would as much have intended to protect a copyright holder from the unlicensed activities of Aereo as from those of cable companies.
...[T]he subscribers to whom Aereo transmits constitute “the public” under the Act.... In addition, neither the record nor Aereo suggests that Aereo’s subscribers receive performances in their capacities as owners or possessors of the underlying works.... Finally, the statute makes clear that the fact that Aereo’s subscribers may receive the same programs at different times and locations is of no consequence. Aereo transmits a performance of petitioners’ works “to the public.”
Aereo told the Court during oral arguments:
You know you have a right to put an antenna on your roof and put a DVR in your living room. We can provide exactly the same antenna and DVR for a fraction of cost by putting it over the cloud.
The Court said it doesn't think it's ruling will be of significant impact.
We agree that Congress, while intending the Transmit Clause to apply broadly to cable companies and their equivalents, did not intend to discourage or to control the emergence or use of different kinds of technologies. But we do not believe that our limited holding today will have that effect.
