Broadcast TV and Cloud Computing Clash Before US Supreme Court

Last Tuesday, April 22, Internet start-up Aereo faced scrutiny before the Supreme Court in a case against broadcast TV networks, who claim Aereo is pilfering their copyrighted material, USA Today reported.

The TV networks — including Comcast’s NBC, Disney’s ABC, CBS and 21st Century Fox — have been suing to stop Aereo, which charges consumers $8 to $12 a month in return for a dime-sized antenna and cloud storage on Aereo’s servers. The antenna picks up broadcast signals from free-to-air TV channels. This allows consumers to watch and record any TV show from any device, according to the Wall Street Journal.

The catch? Aereo hasn’t been paying retransmission fees to the networks in exchange for broadcasting their shows. Aereo defends its model by saying it isn’t doing anything different than an individual putting an antenna on the roof, which is still legal.

While the Supreme Court won’t deliver a verdict on the Aereo case until the summer, the implications of the case’s outcome are significant for both cloud computing companies and for the major broadcast networks.

If Aereo, which has earned about $100 million in investments so far, loses, it will likely shut down — and investments in the cloud computing industry are sure to decline as well, according to the Minneapolis Star Tribune.

But if Aereo wins the case, less and less people will pay for their TV, drastically cutting broadcasters’ revenue, which amounted to about $3.3 billion in 2013, according to the Star Tribune. Broadcasters may also move their programming off public airwaves.

While the majority of the Supreme Court justices seemed to side with the broadcasters in the debate, Justice Stephen Breyer remarked that, Aereo’s service to consumers is in some ways similar to storing copies of songs in the cloud and retrieving them on demand, or even to a record store that sells copies of the same CD to different customers, USA Today reported.