Television — or, at least, the experience of watching broadcast shows
on a television — is not the wave of the future. The television ratings
company Nielsen classifies
nearly 5 million households as “Zero-TV,”
meaning that they either have no television or that they use it only
for DVDs, games and other activities unlike traditional TV watching —
and this is a 150 percent increase in the number of Zero-TV households
since 2007. TV ownership is
steadily declining, while more and more Americans are seeking entertainment on the Internet.
Yet, because of a loophole in federal law, television programs
broadcast over the Internet can be treated very differently than
programs broadcast via cable or satellite. While cable and satellite
companies must pay a fee to broadcast copyrighted material that they
ultimately transfer to consumers, a company known as Aereo has found a
workaround to this fee. Under federal law, broadcast programs are free
as long as the consumer owns and controls the antenna used to catch the
broadcast signals. As Aereo CEO Chet Kanojia tells ThinkProgress, his
company uses an antenna array that it uses tap into the “over-the-air”
signals. Customers pay $8 a month to “rent” their own
mini antenna
that works like the rabbit-ear antenna you plop on top of your TV.
Customers also get their own DVR cloud space to save shows as part of
their rental package.
On Tuesday, however the Supreme Court will hear oral arguments in
American Broadcasting Companies, Inc. v. Aereo, Inc., a case that could potentially shut down Aereo’s ability to take advantage of this loophole. The case pits
Aereo against major
broadcast companies
such as ABC, CBS, NBC and Telemundo. If Aereo wins, it could expand TV
on the internet, opening up the market for online-only cable and
satellite TV alternatives. But if the broadcasters win — and even if
they don’t — consumers may have to pay for
content that was once free, regardless of whether they actually watch it on TV or online.
“Ultimately, this is a fight about how do we stop getting programming
delivered to us via [traditional] broadcast and move it onto the
Internet. This is the beginning of the initiation of how and when that’s
going to happen,” Michael Carroll, a law professor at American
University in Washington, D.C., tells ThinkProgress.
Broadcasters say
Aereo should be shut down
because it’s stealing copyrighted content and transmitting it through
their site. To avoid trampling on copyright laws, broadcasters say Aereo
should pay the same fee cable and satellite companies pay to transmit
network TV programming, such as live sporting events.
“Broadcasters are freaking out because Aereo represents the complete
disruption between the cable systems and the broadcasters,” Carroll
says. “Cable [companies] don’t want to pay the fee, but they also don’t
want to lose subscribers to Aereo, which pays nothing for the
broadcasts.”
Two lower courts ruled that Aereo’s unique brand of transmission was
legal. But with so much money on the line — broadcasters make billions
of dollars each year collecting the fee — the Supreme Court will now
weigh in.
It should be noted that a very similar fight occurred when cable TV
came around. Community access television redistributed content to rural
areas that couldn’t receive reliable broadcast signals because they were
far from the towers, Carroll says. The Supreme Court ruled in the
Cablevision case that cable companies weren’t infringing on the
broadcasters’ right to make content available to the public and,
therefore, not entitled to redistribution fees. In the 1970s, however,
Congress made it so that cable companies had to pay a licensing fee when
re-airing copyrighted content such as the Super Bowl. All cable
companies must pay the fee and transmit all broadcast channels, even
smaller ones with little funding.
This history could repeat itself if Aereo wins its case. Even if the
Supreme Court rules in Aereo’s favor, Congress could step in and make
them pay the fee anyway. “If Aereo wins, we will almost certainly see
Congress respond,” Carroll says. “There’s a huge influence from the
media industry in Congress. I can see it going the way that the cable
verdict went. Everyone who has come along with a new technology for
broadcast has gotten the right to do that if they pay the fee.” If that
happens, consumers may still have to share some of the costs for the new
fee.
Broadcasters and groups such as the NFL have also
threatened
to take their shows and programming off the networks — and make them
available only on cable — if the justices side with Aereo. That will
likely force consumers,
especially sports enthusiasts,
who primarily watch TV online to get a cable subscription to watch
programs such as the TV-drama Scandal or even the Olympics.
Nevertheless, going against Aereo would set a precedent against
technological development, according to Kanojia. “There are so many
creators out there; [keeping] the platform for them to create other
types of programming” for consumers is crucial, Kanojia says. A ruling
in the broadcasters’ favor could make it so that Google and other tech
companies wouldn’t be able to improve on older technology, he says. For
example, Google Drive brought a different means of storing and streaming
data. “If you don’t allow a consumer to take media wherever they want,
with taxes, levies and fees, you risk losing them,” he says.
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