Cloud on Winning Side of Legal Victory

The cloud gained a legal victory recently in a case between a startup and several major broadcasting players.

The U.S. Court of Appeals in New York has refused to shut down Aereo, a service that allows users to record live broadcast content in the cloud for later consumption.

Broadcasters including Fox, ABC, CBS, NBC and others sued, saying Aereo copies and retransmits their programs as they are first aired without permission, according to TheRecord.com.

While the court decision was aimed specifically at Aereo, it would apply to any individual or service that was recording and storing broadcast content in the cloud.

Aereo provides a service that features individual Internet-accessible television receivers, each with its own “antenna” and each with access to cloud storage. Aereo lets subscribers view shows in real time, with a slight delay, or for replay at a later time. Subscribers use Aereo as a way to time shift television shows and as a way to skip commercials, just as they might do with a DVR (digital video recorder) at home.

Broadcasters believe that allowing Aereo to proceed without licenses could threaten the ability of broadcasters to produce banner sports or awards show events, including the Academy Awards. They also say cable and satellite operators may decide to adopt Aereo’s technology or cause revenues from those paying licensing fees to decline because the content is devalued when it is distributed by others for free. And they say Aereo’s success would hurt their ability to license content on an on-demand basis over the Internet.

The difference between Aereo and a DVR is that customers don’t have to buy the DVR equipment. The fact that the system uses individual receivers and antennas means that Aereo isn’t considered a cable television service, which also is covered by copyright rules. Instead, the only significant difference between Aereo and an over-the-air television receiver with a DVR attached is that Aereo uses the cloud for storage and has the receiver a distance away from the user rather than at the user’s home or office.

The major television networks said that Aereo was infringing on their copyrights because the cloud-based storage made it a public performance. The court disagreed and held that the use didn’t infringe.

The appeals court relied in part on an earlier court case in which judges found that Cablevision System’s digital video recorder did not violate copyright law by copying and storing programs for each customer’s use. A ruling against Aereo would conflict with its earlier decision in the Cablevision case, the majority said.

Patrick Burke is a writer and editor based in the greater New York area and occasionally blogs for Rackspace Hosting