WASHINGTON – The Supreme Court on Wednesday ruled against video startup Aereo in a sweeping decision that will maintain the status quo for television viewers even as they grow increasingly impatient with the slow movement of TV entertainment away from traditional services and onto the Internet.
Aereo, a small streaming-video service, provided the one piece of content that could prompt more consumers to cancel their cable subscriptions: live television. The company allowed users to view at their convenience football games, awards shows and other programs on the device of their choice for a monthly fee of $8 to $12.
Aereo, combined with Netflix or Hulu and a broadband Internet subscription, promised for some consumers a cheaper a la carte alternative to the big cable bundle.
But in a 6-3 decision, the justices ruled that Aereo violated copyright law because it did not pay the same licensing fees that cable television providers do for the right to retransmit the programs of broadcast networks.
Aereo performs petitioners’ works publicly, Justice Stephen Breyer wrote in the court’s opinion. Whether Aereo provided public performances of broadcasters’ programs was central to the case.
Aereo argued that it provided private performances and that its individually assigned tiny antennas and storage files for viewers put consumers in control of what programs they chose to watch.
The company equated its technology to an antenna and cloud storage rental service.
But the court disagreed, saying that Aereo looks similar to a cable television provider, which under copyright law must pay licensing fees to broadcast networks to carry their programs to subscribers.
It does not merely supply equipment that allows others to do so, Breyer wrote.
Aereo CEO Chet Kanojia called the decision a massive setback for the American consumer and warned that the high court sends a chilling message to the technology industry.
Broadcasters waged a two-year battle against Aereo in multiple lower courts as the specter of Aereo or copycats of the company’s methods and technology posed a major threat to their business.