Why the Aereo Decision Bites for Tech

SCOTUS handed down its long awaited decision in Aereo yesterday, and the result, in favor of the traditional broadcasters, didn’t surprise me.

Still, the logic the majority used to reach its decision was troubling, especially if you’re a young, upstart technology that’s building a new, innovative service. The Court’s opinion completely glossed over Aereo’s technology — which was pretty specifically designed to stay within existing copyright law.

Viewed in terms of Congress’ regulatory objectives, why should any of these technological differences matter?

This is a lazy line of reasoning, with unfortunate consequences. Especially in an era when the newest, most innovative technologies blur the lines between broacasting, phone calls, TV shows, computers, movies…and give consumers a multiplicity of new choices in the process. Contrary to the court’s opinion, technology matters a great deal. New technologies will always push the envelope of the law, and in some cases intentionally exploit its vagaries. Rather than hold the line in favor of the old and established, I think it’s incumbent on the law and those who make and interpret it to understand new technologies and craft new rules that keep pace. In the words of the dissent:

What we have before us must be considered a “loophole” in the law. It is not the role of this Court to identify and plug loop holes. It is the role of good lawyers to identify and exploit them, and the role of Congress to eliminate them if it wishes.

Some suggest that this ruling will have a chilling effect on all manner of new technologies, and discourage young start-ups from innovating. Having worked with many start-ups, I’m pretty sure that’s not going to happen. Start-ups and the investors that back them take many, many risks to get started, and are not often deterred by legal uncertainty (despite the best efforts of the legal community). This decision won’t stand in their way – just add it to the pile of risks that are stacked up against young companies.

The ruling, though, will be a weapon in the already large arsenal of the 20th century media companies, and one they will surely seek to expand and employ against new services that they view as threatening their traditional business models. While that’s not going to stop new innovation, the result here, and especially the court’s approach in reaching it, is definitely not a positive for start-ups, or for consumers who seek alternatives to traditional media and broadcasting.

6.30 update: Prof Mark McKenna makes some of the same points, far more eloquently than I do, in Slate.

[i]n glossing over technological details, the opinion potentially implicates a wide range of other services. What about Dropbox and other cloud computing services, for example, all of which use their own equipment to retransmit what they receive to their customers, often transmitting many user-specific copies of the same works? How do those avoid liability? Not to worry, says the court, those technologies might be different. Why? Because cable system.

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