Last week, the Supreme Court heard oral arguments in the case of ABC vs Aereo. The plaintiffs in the case—major broadcasting companies including ABC, NBC and Fox— are asking the Court to rule against Aereo, a New York-based startup that streams broadcast television to consumers via a collection of tiny antennas. Though Aereo says its business model is comparable to renting out “rabbit ear” antennas to customers, the broadcasters insist that the start up is stealing and illegally transmitting copyrighted TV content.
The Court will attempt to determine whether Aereo’s business model—selling users a subscription to a single antenna which then sends a feed to an individual user across the internet—is in compliance with the Copyright Act of 1976, which forbids a person or company from distributing copyrighted material for public performance. Aereo’s defense rests on their technology; they argue that since each antenna broadcasts a feed to a single user, their service provides private performances.
Though the broadcasters might seem to have an easy win in this case (they even have the support of the Obama administration), the Supreme Court has shown some reluctance to rule against Aereo, citing concerns about what such a ruling would have on other cloud computing companies. The point has been debated back and forth among legal and technology experts over the last few weeks.
Whether or not the Court’s ruling impacts cloud computing companies, it will have an impact on the capacity for future innovation, which should concern us all.
As Justice Roberts pointed out (though not necessarily in a complimentary way), Aereo’s model is quite clever, which raises the question: why hasn’t anyone else tried it? Cable subscriptions are ridiculously expensive, and many subscribers only watch a few programs. With TV offerings made available through companies such as Netflix and Hulu, a growing demographic is switching to the Internet as their main source for program viewing. Given this information, you’d think a multitude of companies looking to dominate the market would be considering ideas like this.
However, other businesses don’t pursue models like Aereo’s for fear of facing the same sort of legal repercussions. Even if they complied with the law through “clever” means, as Aereo seems to have done, they’d still be at risk because broadcast companies aren’t shy about throwing around accusations of copyright infringement to combat any challenges to their supremacy. In fact, they made similar cases in the 70’s and 80’s against cable providers and VCR sellers.
Broadcasters claiming that their “property” is being violated when other companies find inventive ways to tap into public airwaves has nothing to do with protecting their rights; it’s about using a legal framework to circumvent legitimate market competition. This is why copyright laws—and all other manifestations of intellectual property rights laws—hinder innovation and what’s more, they interfere with actual property rights.
Though many in the liberty movement reject intellectual property rights, many liberals and conservatives (and even some libertarians) support them on utilitarian grounds. The argument for intellectual property rights usually involves the claim that without them, people would have no incentive to invent, create or discover. But evidence doesn’t really suggest this. With the advent of the Internet, there’s a plethora of writers, artists and musicians who share their work online for free—either to gain exposure or simply because they love to create.
And, as a few libertarians before me have pointed out, to accept intellectual property rights logically requires the denial of actual property rights. If I buy the DVD box set of a show, that box set becomes my property; my ownership is the result of a consensual financial agreement. If I own it, I have exclusive control over it and how it’s used. And if I’m not free to use it anyway I want—including broadcasting it to a few hundred of my closest friends for a nominal fee—then my ownership is incomplete. Likewise, if I buy a few thousand antenna, I own them and should be able to use them to access publicly available airwaves.
The outcome of the Aereo case will likely revolve around whether the Court decides that the startup violated existing copyright laws or (barely) complied them. If the broadcasters succeed, Aero will likely go under and broadcasters will have a precedent to discourage similar attempts. If Aereo succeeds, however, it could open a floodgate of comparable offerings from companies like Amazon and Netflix, the competition from which would encourage innovation and ultimately benefit the consumer. Of course, all of that is inhibited by adherence to intellectual property rights.