The Wrong Decision at the Right Time: How Aereo and its Aftermath Exposed the Need for Change in the Copyright Act

• Author: Alexis V. Preskar
• Position: J.D., summa cum laude, Capital University Law School; B.A. in Journalism, cum laude, May 2013, The Ohio State University. I owe endless gratitude to Professors Susan Gilles and Stephen Grant for their expertise and encouragement. Thank you to my parents for motivating me to always do my best and fostering all of my creative pursuits, and to ...
• Pages: 755-787

THE WRONG DECISION AT THE RIGHT TIME: HOW AEREO AND ITS AFTERMATH EXPOSED THE NEED FOR CHANGE IN THE COPYRIGHT ACT ALEXIS V. PRESKAR * I. I NTRODUCTION Television, for better or for worse, is America’s sweetheart. 1 Although traditional television has continually withstood the onslaught of new technologies and remains the top choice for media consumption, it has faced stiffer competition in recent years because of the prevalence of portable devices. 2 And even though there are only twenty-four hours in a day, companies and Americans alike are trying to figure out how to squeeze in as much time as possible with these new devices. 3 Yet despite our love for screen time, 4 many viewers may not understand the differences between the Copyright © 2016 Alexis V. Preskar. * J.D., summa cum laude, Capital University Law School; B.A. in Journalism, cum laude, May 2013, The Ohio State University. I owe endless gratitude to Professors Susan Gilles and Stephen Grant for their expertise and encouragement. Thank you to my parents for motivating me to always do my best and fostering all of my creative pursuits, and to Jacob for his patience always, but especially in this writing process. 1 See NIELSEN, The Total Audience Report (Dec. 3, 2014), http://www.nielsen.com /us/en/insights/reports/2014/the-total-audience-report.html [hereinafter NIELSEN, The Total Audience Report] (noting that because of the limited numbers of hours in a day, video consumption can increase only finitely, but content is still key for consumers and is being accessed by more online mediums). See also NIELSEN, Shifts in Viewing: The Cross-Platform Report Q2 2014 (Sept. 8, 2014), http://www.nielsen.com/us/en/insights/reports/2014/shifts-in-viewing-the-cross-platform-report-q2-2014.html [hereinafter NIELSEN, Shifts in Viewing]. Although younger viewers (ages 18–34) are increasing their screen time overall, the use of digital devices is increasing across all age groups (ranging from 18–64). Id. In fact, older generations took more to digital devices between the second quarter of 2013 to the second quarter of 2014, increasing their use from 60 to 80%. Id. Even though the time spent viewing media on television decreased over all demographics, television still dominates how Americans access media. See id. 2 See NIELSEN, The Total Audience Report, supra note 1. 3 See NIELSEN, Shifts in Viewing, supra note 1. 4 In 2013, the average American spent over five hours per day using digital media, while television use accounted for about four and a half hours per day. Digital Set to Surpass TV in Time Spent with US Media: Mobile Helps Propel Digital Time Spent, EMARKETER (Aug. (continued) 756 CAPITAL UNIVERSITY LAW REVIEW [44:755 forms of television they watch: broadcast and cable. 5 This distinction is becoming more significant in both intellectual property and communications law as new technologies emerge and test the limits of existing law. 6 Even more importantly, these legal battles reflect new ways typical media consumers receive content, and the combination of these cases with the potential changing front of media consumption could soon change the face of traditional television. 7 This Note looks at the relationship between broadcast and cable, the repercussions of ABC, Inc. v. Aereo, Inc. 8 and its effect on how Americans watch television, and what Congress should do about it. II. B ACKGROUND A. A Brief History of the Broadcast, Cable, and Copyright Relationship Although there are many rules and regulations covering cable providers, this section will focus on why cable providers are required to provide broadcast signals, and it will briefly look at the compulsory licensing system of the Copyright Act with respect to cable and broadcast. The Communications Act of 1934 requires cable providers to seek consent from broadcasters before retransmitting broadcast signals. 9 The broadcast station may require a fee for the retransmission. 10 However, the 1, 2013), http://www.emarketer.com/Article/Digital-Set-Surpass-TV-Time-Spent-with-USMedia/1010096#sthash.kMeLQKsT.dpuf. 5 See Paul Rodriquez, Broadcast, Cable . . . What’s the Difference? NCTA PLATFORM (Nov. 12, 2008), https://www.ncta.com/platform/cable-programming/broadcast-cable-whats-the-difference. 6 See, e.g., ABC, Inc. v. Aereo, Inc., 134 S. Ct. 2498, 2503 (2014). 7 See EMARKETER, supra note 4. 8 Aereo, 134 S. Ct. 2498. 9 Communications Act of 1934, 47 U.S.C. § 325(a) (2012). See also Cable Carriage of Broadcast Stations, FCC, http://www.fcc.gov/guides/cable-carriage-broadcast-stations (last updated Aug. 15, 2013). Since 1934, broadcast stations that use the programming of other broadcast stations have been required to obtain the prior consent of the originating station. This requirement was made applicable to cable systems because the absence of this requirement was distorting the video marketplace and threatening the future of over-the-air television broadcasting. Id. 10 FCC, supra note 9. (continued) 2016] AEREO AND ITS AFTERMATH 757 Communications Act also contains a “must-carry” provision. 11 This means that cable operators must carry “the signals of local commercial television stations,” 12 and, if a broadcaster enforces its must-carry rights, it cannot also demand payment. 13 In line with the must-carry provision, the 1976 Copyright Act provides a compulsory license to cable systems to transmit broadcast programming without imposing liability for copyright infringement. 14 Together, these statutory provisions create a system which allows cable providers to retransmit broadcasters’ signals without infringing on the broadcasters’ copyrights. 15 This complementary system makes sense because it would be contradictory to charge cable operators with infringement under the Copyright Act for what the Communications Act requires. B. Direct Liability for Content Providers Under the 1909 Copyright Act The United States Supreme Court has long had to deal with direct liability for service providers 16 in the face of new technology. 17 For example, in some areas such as West Virginia, it was difficult for individuals to catch over-the-air broadcast signals with their own equipment because of the mountainous terrain. 18 As a solution, companies erected one large antenna to collect the signals, which were then sent to individual homes. 19 This Community Access Television (CATV) system came under fire from 11 47 U.S.C. § 534(a); FCC, supra note 9. 12 § 534(a). 13 Id. § 534(b)(10); FCC, supra note 9. 14 See Copyright Act of 1976, 17 U.S.C. § 111(c) (2012). The retransmission of this programming is referred to as a “secondary transmission” in the Copyright Act. See id. The secondary transmissions are the broadcast signals (which cable operators are required to carry) and the primary transmission is the cable signal. See id. 15 See id.; 47 U.S.C. § 534(a). 16 For the purposes of this Note, a service provider is an entity that does not transmit original programming, but solely collects and retransmits signals from broadcasters to consumers. Part II discusses this “collection and retransmission,” which often constitutes a performance under the Copyright Act and can be infringing if done without the permission of the broadcaster. 17 See, e.g., Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390, 395–96 (1968). 18 Id. at 391; see Evolution of Cable Television, FCC, http://www.fcc.gov/encyclopedia /evolution-cable-television (last updated Mar. 13, 2012). 19 Fortnightly, 392 U.S. at 392; see Evolution of Cable Television, supra note 18 . (continued) 758 CAPITAL UNIVERSITY LAW REVIEW [44:755 broadcasters who argued that the transmissions constituted copyright infringement. 20 In Fortnightly Corp. v. United Artists Television, Inc., 21 the U.S. Supreme Court held that the CATV system did not infringe on any copyright because it did not “perform” under the 1909 Copyright Act. 22 The Court analogized the CATV system to a viewer, rather than a broadcaster, because it took a passive role in the transmission of the signals. 23 A few years later, in Teleprompter Corp. v. Columbia Broadcasting System, Inc., 24 the Court was faced with another CATV system. 25 One notable difference was that the system provided for not only local stations, but also those as far as 450 miles away. 26 The copyright owners argued the Fortnightly analysis was inapplicable because an individual could not capture these distant signals in his or her home; therefore, the CATV system provider was more analogous to a broadcaster as it provided a service the individual could not get on his or her own. 27 The Court rejected this argument and followed Fortnightly, holding that the CATV system did not infringe on the copyrights of the broadcasters. 28 It is important to note that both Fortnightly and Teleprompter were decided under the 1909 Copyright Act. 29 The 1909 Act granted a copyright owner the exclusive right to “perform” a work publicly, but it did not define the word “perform.” 30 Without clear guidance on the parameters of such an important word, the Court created two categories: broadcasters and viewers. 31 Broadcasters “performed” by exhibiting the works. 32 Viewers were audience members who took in the works and so did not “perform.” 33 Those who fell in the broadcaster category were subject to direct liability for 20 See Fortnightly, 392 U.S. at 393. 21 Id. at 390. 22 Id. at 401–02. 23 Id. 24 415 U.S. 394 (1974). 25 Id. at 399–401. 26 Id. at 400. 27 Id. at 406. 28 See id. at 412. 29 Id. at 396; Fortnightly, 392 U.S. at 390. 30 See Copyright Act of 1909, ch. 320, § 1(d), 35 Stat. 1075, 1075, repealed by Copyright Act of 1976, 17 U.S.C. §§ 101–810 (2012). 31 See Fortnightly, 392 U.S. at 398–99. 32 Id. at 398. 33 Id. (continued) 2016] AEREO AND ITS AFTERMATH 759 copyright infringement, while viewers were not. 34 In the Court’s opinion, the CATV systems were more akin to individuals who collaborated to receive the content more effectively, and by...