Aereo could be in trouble. For more than an hour today, the Supreme Court weighed arguments that could change the future of TV. If Aereo wins, it could threaten the billions of dollars in retransmission fees that broadcasters collect from cable and satellite companies. But no matter how many times Aereo attorney David Frederick tried to explain the antenna-based system to the Supreme Court, the justices just couldn't shake the conclusion that it was simply a legal loophole.
“Your technological model is based solely on circumventing legal prohibitions that you don’t want to comply with,” said chief justice John Roberts, addressing Frederick. “The only reason to have 10,000 dime-sized antennas is to circumvent the copyright act.”
Roberts was one of several on the bench that expressed skepticism that Aereo's system of antennas and cloud-based technology may be nothing more than a technological gimmick.
“You are the only one who doesn’t pay for copyright,” noted justice Ruth Bader Ginsburg, who, along with her colleagues on the bench, had a tough time figuring out how Aereo was much different from cable, satellite or other video services that pay for copyright.
At the same time, some of the justices, particularly justice Stephen Breyer, was "nervous" that a broad ruling for the broadcasters could set back cloud computing.
"Are we somehow catching other things that really will change life and shouldn't, such as the cloud? And you said, well, as the government says, don't worry, because that isn't a public performance. And then I read the definition and I don't see how to get out of it," Breyer said.
"The cloud industry is freaked out," Frederick said at one point.
That the justices seemed worried about cloud computing was probably why Barry Diller, who financed Aereo, was overhead saying “things went well,” which is a little more optimistic than his prediction last week that Aereo had a 50-50 chance of prevailing.
Frederick told reporters he was “cautiously optimistic" that the court understood that when a person watching over the air TV in his or her own home is engaging in a private performance that doesn't engage the copyright act.
When asked about his opponents’ predictions, Paul Clement, who argued for the broadcasters, said: “I’ve heard more than one argument and more than one person that heard the argument had a different interpretation of how it went. The justices were asking the right questions and I think we provided them with straightforward answers.”
A decision could come as soon as the end of June.