Innovation, Progress and Consumer Choice

A few year-end thoughts from Aereo’s Founder and CEO, Chet Kanojia

Major broadcast companies are trying very hard to put Aereo out of business.  But, the dispute goes far beyond the fate of one company.  What is at stake is whether a consumer’s right to access broadcast television for free, via an antenna and to record that content for private use, is still meaningful.  If consumers cannot take advantage of current and innovative technology, that right becomes hollow.

There are certain things we take for granted as Americans. One of those things is free access to over-the-air broadcast television and the ability to record and watch our programs.   If you are of a certain age, you used to rely on a TV antenna propped on your roof or TV.  Then along came the VCR, which transformed the consumer television experience.  We could now record a show for our private viewing. Then, the DVR enabled us not only to make recordings, but also to pause, rewind and fast-forward live television. And, in recent years, a DVR in the cloud became available.

But continued innovation to preserve television access for consumers is in jeopardy.

Consumers have the right to access broadcast television for free via an antenna because the public owns the airwaves.  Use of that valuable spectrum is licensed by the public to the broadcasters with the obligation that broadcasters must operate in the “public interest, convenience, and necessity.”

In exchange for the license we grant to broadcasters, we’re entitled to free access to broadcast television. In fact, Congress believed so strongly in maintaining free access that in 2007, they granted substantial subsidies for converter boxes for millions of homes to continue to receive over-the-air broadcasts after the change from analog to digital.  The crucial question is: Will the requirement that the broadcasters use the spectrum licensed to them by the public for the “public interest, convenience, and necessity” be enforced? Or will they be permitted to use the publicly owned airwaves to enhance their business interests, while frustrating consumer choice and access.

Unfortunately, every time new technology emerges, so do attempts to block those innovations. Our right to record television for private home viewing was the result of an epic copyright battle between certain television production studios and broadcasters and Sony Corporation of America, then maker of the “Betamax” VCR.    Studios and broadcasters vigorously opposed the right of individual consumers to record and watch television programming. In 1984, the Supreme Court resolved that battle and held that a consumer had a “fair use” right under the Copyright Act to make and view those private copies.  But for that case, today every consumer would be paying broadcasters each and every time they made a copy of Modern Family or the Super Bowl on their home DVR.   More than 20 years later, major broadcasters again tried to stop consumers from having access to remote DVR storage, but again failed in that effort.

If consumers have a right to access over-the-air broadcasts and to record and view those broadcasts for their own use, what’s the problem?  Unfortunately, several obstacles stand in the way.

First, in view of cable and satellite dominance of the market, many consumers have simply forgotten that they have the right and ability to access broadcast television for free using conventional home equipment.  This is especially true when what would otherwise be free broadcast television is often offered only in a high-cost “bundle” with non-broadcast channels. Consumers should be entitled to buy whatever they want, and for those who can’t afford it, or don’t want to subsidize other programming, they should have an alternative. Today, consumers have no real choice or voice in this equation.

Second, the television technology available to consumers has not kept pace with other technology advances.  Consumers today expect to access media from the “cloud” using Internet-connected devices such as smartphones, tablets and computers, and they expect ease and convenience.  If consumers are confined to outdated technology, the right to access broadcast television that is the quid pro quo for the spectrum license granted to the broadcasters is utterly meaningless.

At Aereo, we had a simple idea: to modernize access to broadcast television. We set out to make it easy for consumers to use that same combination of home equipment – an antenna, a DVR and a media streamer – but do it remotely, in the cloud with no boxes or wires.   Each consumer using Aereo can use their own Internet-enabled device – such as a tablet, smartphone, laptop, or Internet connected television – to access a remotely located individual antenna, DVR and media streamer, to record and watch broadcast television. It is simple and efficient and allows consumers to pick the device of their choice to access television.

Unfortunately, as with the Betamax in the 1980s and the Cablevision remote DVR earlier in this decade, the broadcasters have mounted a frontal attack on Aereo alleging copyright infringement.  All of the major broadcasters sued Aereo in the federal district court in New York.  They sought an injunction, but the trial judge denied it.  Now, the broadcasters have appealed that decision to the federal appellate court in the Second Circuit and Aereo awaits that decision.   It is telling that one of the major arguments that the broadcasters have advanced against Aereo is that it has somehow done something improper by intentionally designing its system to precisely follow existing copyright law.   It is a sad and troubling state of affairs if a company could be penalized for simply following the law.

An Aereo win is a consumer win. The broadcasters should be held to their obligation to use the spectrum licensed to them by the public, to operate in the “public interest, convenience, and necessity.”

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