Aereo and the Spirit of Technology Neutrality

aereo_logoAereo is a broadcast re-transmitter. It leases to subscribers access to an antenna that captures over-the-air television, copies and digitizes the signal, and then sends it into the subscriber’s home, on a one-to-one basis, in real time or at the subscriber’s later desire. Aereo was poised to revolutionize the cable business—or hasten its collapse.

At least, it was.

Wednesday the Supreme Court unequivocally held that Aereo infringes copyright law, per Section 106(4) (the Transmit Clause). Aereo’s main backer, Barry Diller, quickly waved the white flag. Aereo is done—and it’s unclear what exactly Justice Breyer’s majority opinion portends for other technologies, despite the majority’s “believ[ing]” that the decision will not harm non-cable-like systems.

As James Grimmelmann succinctly noted amid a flurry of thoughtful tweets, “aereo resolves but it does not clarify.” And that might be an understatement. Eric Goldman notes four unanswered questions. (Amazingly, the majority opinion does not even engage Cablevision.) I’d add to that list the still incredibly vague line demarcating a public performance and the broader issue of technology neutrality in copyright law. (More on technology neutrality in a moment.)

The Court’s opinion relied heavily upon legislative history and, in particular, Congress’s abrogation of two earlier Supreme Court decisions on cable re-transmitters, Fortnightly Corp. v. United Artists Television and Teleprompter Corp. v. CBS. The Aereo Court limited discussion entirely to “cable-like” systems, punted on technologically similar non-cable-like systems, and left a big question about the dividing line.

Overall, the Court came off sounding blind to the technological realities of 2014—in stark contrast to its relatively technology-savvy decision in Riley v. California. (Dan’s take on Riley.)

Margot Kaminski has an excellent post for The New Republic addressing the varying treatment of cloud computing in Aereo and Riley, noting how cloud concerns were waved off in Aereo but factored into the Court ruling that the government normally must get a warrant to search an arrestee’s cell phone. The question, Margot asks, is why the different treatment?

The simplest answer would be that the Court was dealing with two different legal regimes: Constitutional privacy law versus statutory copyright. But at the heart of both decisions, the Court was asked to decide whether an old rule applied to a new technology. In one case, the Court was hesitant, tentative, and deferential to the past legal model. And in the other, the Court was unafraid to adjust the legal system for the disruptive technology of the future.

I’m a fan of simplicity, and I think it is particularly helpful in answering this question.

The Fourth Amendment is dynamic. As Orin Kerr has explained: “When new tools and new practices threaten to expand or contract police power in a significant way, courts adjust the level of Fourth Amendment protection to try to restore the prior equilibrium.” The 1976 Copyright Act is not. And by design.

With the 1976 Copyright Act, Congress adopted the principle of “technology neutrality” for copyrightable subject matter and exclusive rights—to “avoid the artificial and largely unjustifiable distinctions” that previously led to unlicensed exploitation of copyrighted works in an uncovered technological medium.  Rather, the 1976 Act was written to apply to known and unknown technologies.

For example, the owner of a photograph has the same exclusive control over reproduction, whether it occurs via photocopier or scanner or camera or computer program; what matters, under the 1976 Act, is that the photograph is reproduced at all. Or, regarding the Transmit Clause, whether a cable-like company uses one antenna or one thousand.

In essence: Congress evinced an intent for copyright law to be applied functionally, not formalistically. As the Aereo Court said, technology that is “substantially similar to those of the CATV companies that Congress amended the Act to reach” are within the spirit of Section 106(4), if not the letter, and therefore are infringing.

Ignoring conceptual failings that I exposit in Rethinking Technology-Neutral Laws (working paper; email me if you’re interested), and the resultant welfare costs, there is an intuitive logic to the principle of technology neutrality. It recognizes that technological advances outpace the law, and attempts to avoid statutory obsolescence and to promote equivalent treatment of technologies across time by drafting the law to apply to yet-unknown technologies too.

Reflecting this rationale, the 1976 Copyright Act makes the law’s application per se. Congress left little room for judges treating new technologies differently under copyright law than old technologies, save for a technology-specific carveout (like Section 512) or a use-specific exception (primarily fair use). It does not matter what else the technology does or how the law will hinder it. And the Supreme Court locked in on this in Aereo.

More broadly, the Court’s purposivist approach to Section 106(4) likely extends to other exclusive rights. The Court never clearly articulates that it is applying the Transmit Clause in such a “technology-neutral” manner, but that is what it is doing. And in this sense all of Section 106 is conceptually similar to Section 106(4): it proscribes impermissible ends, regardless of technological means.

The question now is not just what Aereo means for cloud computing, but what the Court’s function-over-form approach to the Transmit Clause means for how the law will be applied to new technologies that press upon other exclusive rights, such as distribution and reproduction.

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