Aereo is a recent technology service that offered online access to local TV broadcasts in selected markets in the U.S. For a fee, they grabbed programs that a subscriber requested, from "free" over-the-air local broadcasters, digitally converted the broadcast into a IP stream that was sent directly to the subscriber's connected device.
And when TV networks and cable systems heard about it, they sought to pre-emptively ban it. Cable because it was a much cheaper alternative to a service they sought to provide. The networks' objection was pithily stated by one network CEO: "If anyone makes money from local broadcasts, we demand a share of it." A consortium of networks and MSOs filed suit claiming that Aereo violated copyright law and seeking an immediate injunction against deploying the system; however, the judge in that case ruled against an injunction as Aereo offered a reasonable argument that its service was not a violation of copyright - but did not initially rule on the viability of that argument. Both parties wanted to expedite matters, so they sought to bring the case to the Supreme Court to get a final ruling on the basic copyright issues.
Copyright law is fairly simple, yet complex. The law gives the owner of the copyright the legal authority to determine the conditions under which the copyrighted material is made available to others. It also, however, permits a "fair use" exemption under certain general conditions - allowing others to access and use the content under restricted conditions. The rise of broadcasting created an issue, however - what counts as a "copy"? This came to a head with the rise of cable systems, and their retransmission of over-the-air broadcast signals from local (and eventually distant) stations. As a result, Congress amended copyright law to include "public performance" of audiovisual signals, and specifically applied that term to carriage ("retransmission") of over-the-air television broadcasts.
Around the same time, the Supreme Court issued a ruling on what behaviors were considered "fair use" of audio and video content. Specifically, they ruled that - for legally acquired content - individuals could record content for their later use (time-shifting), transfer and translate content for use in different locals or on different devices (place-shifting), and make a back-up (archive) copy, but only for their own use.
Aereo's service was designed to fit those "fair use" guidelines and the "free" nature of over-the-air broadcasting (stations are prohibited from charging viewers for access to public broadcasts). Each Aereo subscriber was assigned their own antenna for receiving the free broadcasts, and unlike cable, content was not retransmitted unless specifically requested by that subscriber, and was made available only to the device the subscriber sent the request from. Aereo argued that they were not engaging in a public performance, but a private one that essentially amounted to the time-shifting and place-shifting aspects of fair use.
The big media consortium (ABC et al.) argued that the Aereo service was simply a retransmission service, and was engaged in "public performance" because it offered its service to the public at large. Therefore, Aereo was in violation of U.S. copyright law.
The recent Supreme Court ruling (6-3) was that Aereo's service was "substantially similar" to cable, because it offers a service that allows subscribers to watch TV programs, and that it is a "public performance" because several subscribers may be watching the same program, thus constituting a "public."
It's not terribly surprising, although it is disappointing, that the majority decision is technologically ignorant and focuses on outcomes rather than processes and behaviors. To the majority, any technology that delivers TV programs to members of the public is essentially no different than a cable system and thus any retransmission right for that content must be granted by the copyright owner (presumably, but not necessarily, for a fee). In addition, the majority nonsensically assumes that since the copyright act does not explicitly define "public", it is any group of individuals beyond what may be watching on a single device. The majority also finds that it makes no difference who is initiating and controlling the retransmission - an individual subscriber or a cable system; rather, they shift the focus to Aereo because it offers a "service."
There is a weird yet nonsensical example given, where the majority suggests that Aereo's problem is that it doesn't provide a service to the copyright owners, but to the public. The majority repeatedly focuses on copyright owner's right to set the terms of "performance" or consumption. This ignores the fact that, under law and the terms of their licenses, local broadcasters must provide their copyrighted content freely and without restriction to the public. Not only to those watching live at home on a TV set, or through a cable system paying retransmission fees; the viewer, or Aereo subscriber, already has the legal right to view or listen to broadcast content. The copyright owners have already been paid for that performance by the broadcaster - the majority seems to think that viewers need to pay a second time to engage in time-, place- or device-shifting.
The majority decision argues that this ruling does not prejudge future technologies, saying that it is not their intent. It's hard, though, to see how this is possible, when the decision sets down three extremely broad definitions - 1) that any system for delivering TV content to consumers is "substantially similar" to cable and thus subject to cable's rules; 2) that any group of individuals is considered to be "the public"; and 3) that the driving purpose is not protection of a copyright owner's rights, but the networks "right" to offer a "public performance" of copyrighted material. Combine that with the majority decision's total disregard for the specific elements of technology and service offered by Aereo - and thus not providing any hook for a narrow argument - and you set a precedence for overreach.
Further, this case offered the opportunity to re-examine which activities are covered by "fair use." In light of the wretched quality of the decision, I'm relieved that this Court didn't take up that opportunity.
The dissent shreds the majority decision, arguing that the service provided by Aereo was not even a "performance" as defined by copyright law, much less a "public performance." Rather than looking at the end stage of the service (providing TV programs to viewers) and making an indefensible leap to equate it with cable, the dissent treats Aereo as an Internet content delivery system. And supports their argument by actually looking at what the service does, then examining the actual case law relevant to those actions (rather than relying on problematic anecdotes). The dissent eviscerates the majority's "looks like" argument, noting how it conflicts with other recent decisions (including some authored by the same Justice who wrote the majority decision), and ignores both the question of the type of copyright violation being considered (primary, secondary violation, and whether Aereo is acting as an ISP and thus exempt), as well as the issue of "fair use" and the role of the subscriber (not the system) in selecting content for viewing.
The majority decision has turned a copyright case into a "performance" result, achieved only with mystical inference of Congressional intent, over-broad definitions of "public" & "performance", and a "looks like a duck" equivalence of two video delivery systems that could hardly be more polar opposites in technology and operation. And by doing so, making the application of copyright to new technologies and content delivery systems even more problematic for the future.
And of course, the TV & cable industry hailed the decision, seeing a potential source of revenues (or a protection of current retransmission rights fees). However, that's likely to be a short-term and low-value source for broadcasters and networks for two reasons - first, that while they think they're soaking the service operator for these revenues, eventually viewers will figure out that stations and broadcast networks are asking them to pay for "free TV"; second, that it's the content that generates the value for viewers, not their "public performance" of that content. In fact, to the extent that the broadcast "performance" has any value for the station or network, it comes from the broadcast's ability to reach an audience; as such, any mechanism that will extend or expand their reach should be welcomed, rather than challenged.
Sources - Supremes Rule Against Aereo, Broadcasting & Cable
ABC et al. v. Aereo, Supreme Court decision No. 13-461