Cloud Denialism Precedes Aereo Case

by Matt Schruers on March 29, 2014

Todd Spangler’s piece in Variety yesterday argues that the Supreme Court’s upcoming Aereo case has nothing to do with the cloud.  As Aereo’s day in court approaches, it is being preceded by a wave of “denialism” — grand assurances that a broad interpretation of the Copyright Act’s public performance right won’t affect the growing cloud computing industry.

The only unifying characteristic I’ve discerned among the deniers is that none of them are actually in the business of providing cloud services.

As my Aereo primer pointed out, the outcome of this case can have a grave impact on cloud computing.  Spangler tells us this isn’t the case, however, and waves off “the idea that Aereo is akin to Dropbox.”  As far as I can tell, however, no one except Spangler is saying Aereo is the same as Dropbox.  The point is — as my primer post explains — that when the broadcasters describe why Aereo is infringing, the broadcasters could just as easily be describing what happens when you stream your own files from your cloud account.  The broadcasters urge what is essentially a legal fiction: that multiple private transmissions of the same work over the same system, even at different times, should be aggregated into one single public performance.  Unfortunately, and probably entirely by accident, this argument seems to apply to cloud music lockers as much as it describes Aereo.  A service need not resemble Aereo (or Dropbox) to be endangered by a poorly-reasoned Aereo decision.

Notably, the “remote DVR” system in Cablevision, a 2008 case upon which much of the reasoning in Aereo has been based, and which provided legal certainty that ushered in a wave of extraordinary investment in cloud computing, didn’t look anything like Dropbox either.  Even though Cablevision’s remote DVR didn’t look like a cloud storage service, however, investors quickly concluded that the decision’s reasoning had legitimized storing users’ files in the cloud, and streaming them back.

Spangler argues in part from a misstatement of the facts in the case: “whereas cloud storage services act as repositories for personal files, Aereo itself supplies the content to users.”  He posits that “Aereo, not users, decides what content is available on the service.”  He bases this on the fact that users cannot stream to themselves broadcasts from outside their local broadcast area.  (Of course, Spangler would surely accuse Aereo of infringement if its technology didn’t do this, so it is odd to use that fact to make a case against it.)  Yet according to the decision presently before the Supreme Court, Aereo doesn’t “supply” the content.  As the lower court noted that Aereo doesn’t make copies until “the Aereo user selects what program he wishes a copy to be made of and then controls when and how that copy is played.”  In this manner, the Second Circuit said Aereo was similar to the system in the Cablevision — which in turn was viewed as similar to a conventional VCR.  The copy is made by the user.  Aereo facilitates that copying, just as the Sony Betamax cassette recorder facilitated users’ home taping.

It’s obvious that Spangler thinks that Aereo talking about cloud computing is just self-serving hand-waving.  But if this were merely self-serving, the Business Software Alliance — which represents numerous providers of cloud services — wouldn’t be submitting a brief in this case, arguing that

“adopting petitioners’ argument would impose substantial burdens on cloud computing… If transmissions of the same work could be aggregated to impose copyright liability, providers would have to hobble their systems in ways neither consumers nor businesses would expect, want, or understand — or risk copyright liability.  Either would impose significant new costs that would constrict the development of cloud computing.”

If this case didn’t have the potential to substantially impair cloud services, the U.S. Telecom Association, Wireless Association, Digital Media Association, and others involved in Internet-related services wouldn’t have joined together in a brief arguing that the broadcasters’

“overly broad approach to the public performance right would call into question a variety of established and mainstream services. It could impair technological progress by establishing an irrational legal preference for local technologies over networked ones. And it could threaten the great promise of cloud computing for individual users, businesses, and economic growth.”

Ultimately, when Spangler and others deniers dismiss the cloud-related issues and condemn Aereo’s complex technology as “a Rube Goldberg-like contrivance,” it strikes me as an implicit concession: ‘yes, Aereo’s technology is indeed designed to facilitate private performances, but since Aereo could also be engineered other ways, where the performance would be public, we’re just going to expand the definition of what’s public in order to sweep in Aereo too.’

This is a chillingly activist interpretation of copyright law.  The boundary between public performances and private performances determines what copyright does and does not regulate.  It’s why you don’t need a license to sing in the shower, but you do to sing on stage.  It’s why you don’t need a license to put your music collection in the cloud, but you do if you want to launch a commercial streaming service.  Redrawing that boundary in real time to ensure that Aereo doesn’t disrupt the way consumers now receive free over-the-air television is not a prescription for economic success.  Even if that were necessary, that sort of exercise is not for the courts, but Congress.

The Aereo case isn’t limited to Aereo, any more than the 2 Live Crew-Roy Orbison case, Campbell v. Acuff-Rose, was limited to “Pretty Woman.”  Supreme Court decisions establish principles broader than the facts of the case, and the principle at issue in Aereo boils down to “when does one publicly perform a work?”  If the petitioner broadcasters’ proposed answer to that question wins out, the economic benefits of cloud computing could be lost.

  • J. S. Greenfield

    You are, of course, correct, and it’s important to help people to accurately understand the legal issues in this case, though it seems a shame to give Spangler and Variety a plug here. Not because they put forward an ill-informed opinion. That hardly makes them unique. But rather because they put forward an opinion piece as if it were news, and they purport to be presenting legal analysis, when all they are presenting are Spangler’s personal opinions (which pretty clearly aren’t based on an even remotely serious effort to understand the legal issues or arguments in this case).

    Then also, they first published, and then subsequently edited, a comment from me — not for clarity (as they reserve the right to do), but to remove a link I provided for readers who actually wanted to better educate themselves regarding the issues and arguments in the case. Spangler then replied twice with comments of his own, but they never approved my critical comment in response, and they subsequently deleted Spangler’s comments.

    I would conclude that they don’t just lack an understanding of the legal issues in this case. They have a problem with their professionalism and ethics as journalists.

  • rbm411

    I must be dense as I really don’t get this article. What does rebroadcasting local TV have to do with cloud storage?

    • J. S. Greenfield

      The short story:

      Both Aereo and cloud storage services allow users to store media files and stream those files back to themselves. The broadcasters and their supporters argue that when a user streams a file from Aereo, it is a public performance. When users stream media files from cloud storage, however, it is technologically identical to Aereo.

      The broadcasters, and really more their supporters, have made some feeble attempts to distinguish Aereo from other cloud services. But those attempts to distinguish have been based on factually erroneous claims that those other cloud services differ from Aereo in some way that they don’t actually differ. (They also are essentially making up new proposed law each time — not actually drawn from the copyright statute — but that’s almost secondary to the factually erroneous claims they make about how the systems differ.)

      • David Hammond

        Isn’t the argument, though, that it’s the “capture” into storage via a public performance that’s at issue, as opposed to the storage itself, or the streaming to the consumer?

        I am not a supporter, just interested.

        When I place content into the “cloud”, or stream something from out of the “cloud”, it’s typically something I’ve paid for, i.e. music, movie, etc. When Aero places content into the “cloud”, it’s captured broadcast content. (I hesitate to use the word “free”.)

        Is there a distinction?

        • J. S. Greenfield

          This isn’t a forum suitable for a full discussion, but one of the proposals has been that whether the streaming is public or private turns on whether the content was legally acquired, couple with an argument that the content in Aereo’s system is not legally acquired. (Nevermind that the broadcasters chose not to accuse Aereo of violating their reproduction right in this case, apparently citing the Sony Betamax (i.e., consumer fair use precedent) case in choosing to skip that issue.)

          Another proposal has been that all the details of the system should be ignored, and Aereo should be deemed a public performance because, at a macro level, it produces a result that is similar to cable retransmission, and so it should just be classified as a new “device or process” for such.

          I don’t believe Matt Schruers has ever asserted, or even implied, that it is impossible for the case to be decided against Aereo without impacting the cloud. He has merely pointed out that impact to other cloud technologies is a serious concern. (On the other hand, those “in denial,” as he calls it, dismiss any such concern.)

          And I would expect that, underlying his concern, is the same observation I have made: that every proposal that has been put forward to distinguish Aereo from other cloud storage technologies has been a contrivance — so giving SCOTUS the benefit of presuming that they will issue a ruling that is not a contrivance, one would expect that the most likely outcomes should be either to find all are public performances, or all are private performances.

          If you’d like to dig deeper, I’ve put together a lot of information and commentary on the case, including the relevant judicial holdings and key briefs at:

          http://cimc-greenfield.com/aereo/

          (As you probably infer from my comments here, I have concluded that Aereo does not infringe, though I’ve only very recently gained confidence that the case is so stark that Aereo can be expected to prevail with reasonable confidence. So you know that going into my commentaries, but I’ve tried to be pretty clear about potential biases on my part, in my explanations of the case.)

          • David Hammond

            In the interest of full disclosure, I have a good friend working at Aereo.

    • Matt Schruers

      rbm411, my apologies if my post was too far “down in the weeds.” Although Aereo is not rebroadcasting local TV, the short answer to your question is that ABC’s legal rationale for why Aereo is “bad” seems to necessarily extend to cloud storage of media, because both involve “performances” as they are under the U.S. Copyright Act.

      As J.S.Greenfield explains quite well, the dispute before the Supreme Court isn’t an Aereo popularity contest; it calls on the Court to interpret technical definitions of the Copyright Act, and the broadcasters’ proposed interpretation casts legal uncertainty on cloud storage.

      My “primer” post is a bit more explicit on this: http://www.project-disco.org/intellectual-property/030414-why-aereo-matters-to-the-cloud-a-primer/

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