When is a cable company not a cable company? Or, rather, when is an over-the-air, Internet-connected provider of television content actually a cable company?
These were some of the questions the Supreme Court faced as it decided the case American Broadcasting Companies v. Aereo, Inc. The case revolved around a company that, according to Chief Justice John Roberts is “based solely on circumventing legal prohibitions that you don’t want to comply with.” It’s no wonder the Court decided, by a 6-3 margin, that Aereo’s business model violated copyright law.
So, what does the ruling mean for Aereo? That, of course, is “up to them, in terms of their business model,” says Whitney. “If they do go forward, they would need to pay license fees, which would put them in a situation similar to cable companies…. The Court did not say the technology was illegal, but the way it operates the service violates the Copyright Act. If they decide it’s not worth it, that is up to them. This ruling does not preclude that from happening.”
Goldstein, though, sees a far darker picture for Aereo. “It seems like they have waved the white flag, saying ‘we gave it a try and we lost…’ I can’t see them continuing. Their business model was undercutting other providers. Now they’d have to negotiate with broadcasters and they would have to factor those costs in.”