No. 13-461
`In The Supreme Court of the United States
`_______________
`
`AMERICAN BROADCASTING COMPANIES, INC., ET AL.,
`PETITIONERS,
`v.
`
`AEREO, INC. F/K/A BAMBOOM LABS, INC.,
` RESPONDENT.
`_______________
`
`ON WRIT OF CERTIORARI TO THE
`UNITED STATES COURT OF APPEALS
`FOR THE SECOND CIRCUIT
`_______________
`
`
`BRIEF OF COMPETITION LAW PROFESSORS,
`SOUTHWESTERN LAW STUDENT ANDREW
`PLETCHER, AND PROFESSOR MICHAEL M.
`EPSTEIN, IN ASSOCIATION WITH THE
`AMICUS PROJECT AT SOUTHWESTERN LAW
`SCHOOL, AS AMICI CURIAE IN SUPPORT OF
`THE RESPONDENT
`_______________
`WARREN GRIMES
`MICHAEL M. EPSTEIN
`Counsel of Record
`AMICUS PROJECT AT SOUTHWESTERN LAW SCHOOL
`3050 WILSHIRE BLVD.
`LOS ANGELES, CA 90010
`(213) 738-6774
`amicusproject@swlaw.edu
`
`
`In The Supreme Court of the United States
`_______________
`
`AMERICAN BROADCASTING COMPANIES, INC., ET AL.,
`PETITIONERS,
`v.
`
`AEREO, INC. F/K/A BAMBOOM LABS, INC.,
` RESPONDENT.
`_______________
`
`ON WRIT OF CERTIORARI TO THE
`UNITED STATES COURT OF APPEALS
`FOR THE SECOND CIRCUIT
`_______________
`
`
`BRIEF OF COMPETITION LAW PROFESSORS,
`SOUTHWESTERN LAW STUDENT ANDREW
`PLETCHER, AND PROFESSOR MICHAEL M.
`EPSTEIN, IN ASSOCIATION WITH THE
`AMICUS PROJECT AT SOUTHWESTERN LAW
`SCHOOL, AS AMICI CURIAE IN SUPPORT OF
`THE RESPONDENT
`_______________
`WARREN GRIMES
`MICHAEL M. EPSTEIN
`Counsel of Record
`AMICUS PROJECT AT SOUTHWESTERN LAW SCHOOL
`3050 WILSHIRE BLVD.
`LOS ANGELES, CA 90010
`(213) 738-6774
`amicusproject@swlaw.edu
`
`
`
`
`
`
`
`i
`
`TABLE OF CONTENTS
`
`
`TABLE OF AUTHORITIES ......................................iii
`
`INTEREST OF THE AMICI CURIAE ....................... 1
`
`SUMMARY OF THE ARGUMENT ............................ 3
`
`ARGUMENT................................................................ 4
`
`
`I. TECHNOLOGY SUCH AS AEREO’S EXPANDS THE
`WIDE DISSEMINATION OF CREATIVE AND
`ESSENTIAL
`LOCAL
`BROADCASTING
`IN
`FURTHERANCE OF THE GOALS OF THE FIRST
`AMENDMENT AND COMMUNICATIONS LAW ....... 4
`
`in
`interest
`substantial public
`A. The
`broadcasting .............................................. 4
`
`promotes First Amendment
`B. Aereo
`values by simplifying public access to free
`broadcast television .................................. 8
`
`
`
`1. The technical limitations of digital
`over-the-air spectrum ........................... 9
`
`2. Aereo provides access to broadcast
`television during blackout disputes
`between
`broadcasters
`and
`distributors ......................................... 11
`
`
`
`
`
`
`
`
`
`ii
`
`II. TECHNOLOGY SUCH AS AEREO’S PROVIDES
`CONSUMERS A MEANINGFUL ALTERNATIVE TO
`A BLOATED ANTICOMPETITIVE TELEVISION
`DISTRIBUTION MODEL WITHOUT DENYING
`COPYRIGHT OWNERS A FAIR RETURN ............. 13
`
`
`
`A. The Aereo system furthers Petitioners’
`economic incentive to create by increasing
`overall advertising revenue ..................... 13
`
`a healthy,
`is
`system
`B. The Aereo
`free-market response to the expensive,
`unwieldy and anticompetitive bundles
`that are forced on MVPD subscribers ..... 17
`
`
`CONCLUSION .......................................................... 21
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`iii
`
`TABLE OF AUTHORITIES
`
`
`
`
`
`
`
`
`
`
`CASES
`
`American Broadcasting Companies, Inc. v. Aereo,
`Inc., 874 F. Supp. 2d 373 (S.D.N.Y. 2012) ............ 16
`
`
`Associated Press v. United States,
` 326 U.S. 1 (1945) ...................................................... 8
`
`Capital Cities Cable, Inc. v. Crisp,
` 467 U.S. 691 (1984) .................................................. 7
`
`Carter Mountain Transmission Corp. v. FCC,
` 321 F.2d 359 (D.C. Cir. 1963), cert. denied, 375
`U.S. 951 (1963) ......................................................... 6
`
`
`Clarksburg Pub. Co. v. FCC,
` 225 F.2d 511 (D.C. Cir. 1955) .................................. 6
`
`Eldred v. Ashcroft,
` 537 U.S. 186 (2003) ................................................ 14
`
`Golan v. Holder,
` 132 S.Ct. 873 (2012) ............................................... 14
`
`Harper & Row Publishers, Inc. v. Nation Enterprises,
` 471 U.S. 539 (1985) ................................................ 14
`
`National Broadcasting Co. v. United States,
` 319 U.S. 190 (1943) .................................................. 5
`
`New York Times Co. v. Sullivan,
` 376 U.S. 254 (1964) .................................................. 8
`
`
`
`
`
`
`
`
`iv
`
`Red Lion Broadcasting Co. v. FCC,
` 395 U.S. 367 (1969) .................................................. 4
`
`Sony Corp. of Am. v. Universal City Studios, Inc.,
` 464 U.S. 417 (1984) .......................................... 13, 14
`
`Stewart v. Abend,
` 495 U.S. 207 (1990) ................................................ 14
`
`Turner Broadcasting System, Inc. v. FCC,
` 512 U.S. 622 (1994) ........................................ passim
`
` 520 U.S. 180 (1997) .................................................. 8
`
`Twentieth Century Music Corp. v. Aiken,
` 422 U.S. 151 (1975) .......................................... 13, 14
`
`United States v. Midwest Video Corp.,
` 406 U.S. 649 (1972) ............................................ 8, 12
`
`United States v. Southwestern Cable Co.,
` 392 U.S. 157 (1968) .................................................. 5
`
`STATUTES
`
`17 U.S.C. § 122 .......................................................... 12
`
`47 U.S.C. § 307(a) ........................................................ 5
`
`47 U.S.C. § 325(b) ...................................................... 12
`
`47 U.S.C. § 325(b)(1)(A)............................................. 12
`
`47 U.S.C. § 534(a) ...................................................... 12
`
`
`
`
`
`
`
`v
`
`
`Cable Television Consumer Protection and
`Competition Act of 1992, Pub. L. No. 102-385, 106
`Stat. 1460 ................................................................. 6
`
`
` §2(a)(5), 106 Stat. 1460-61 .................................... 11
`
` §2(a)(11), 106 Stat. 1461 .......................................... 7
`
` §2(a)(12), 106 Stat. 1461 .......................................... 7
`
`Deficit Reduction Act of 2005, Pub. L. No. 109-171,
`120 Stat. 23, §§ 3005(a)-3005(b) .............................. 9
`
`
`LEGISLATIVE MATERIALS
`
`U.S. Gov’t Accountability Office, GAO-13-576, Report
`to the Acting Chairwoman of the Federal
`Communications Commission, Video Marketplace:
`Competition Is Evolving, and Government
`Reporting Should Be Reevaluated 9-10 (2013) ..... 19
`
`
`ADMINISTRATIVE MATERIALS
`
`In the Matter of Amendment of the Commission's
`Rules Related to Retransmission Consent, 26 FCC
`Rcd. 2718 (2011) ..................................................... 13
`
`
`In the Matter of Annual Assessment of the Status of
`Competition in the Market for the Delivery of Video
`Programming, 27 FCC Rcd 8610 (2012) ......... 17, 18
`
`
`
`
`
`
`
`
`
`vi
`
`In the Matter of Annual Assessment of the Status of
`Competition in the Market for the Delivery of Video
`Programming, 28 FCC Rcd 10496 (2013) ....... 15, 21
`
`
`Study of Digital Television Field Strength Standards
`and Testing Procedures,
`20 FCC Rcd. 19504 (2005) ..................................... 10
`
`
`TREATISES
`
`James C. Goodale & Rob Frieden, All About Cable
`(2006) .................................................................... 5, 6
`
`
`OTHER AUTHORITIES
`
`American Television Alliance, Broadcaster
`Retransmission Blackouts 2010-2013 (2014) ........ 12
`
`
`American Television Alliance, How Long Before
`We're All In the Dark? (2013), available at
` http://tinyurl.com/howlongindark ......................... 12
`
`Tim Arango & Brian Stelter, Comcast Receives
`Approval for NBC Universal Merger, N.Y. Times,
`Jan. 19, 2011, at B9 ............................................... 17
`
`
`Br. for Pet'r, American Broadcasting Companies, Inc.
`v. Aereo, Inc. F/K/A Bamboom Labs, Inc., No. 13-
`461 (Feb. 24, 2014) ................................................. 15
`
`
`David Carr, More Cracks Undermine the Citadel of
`TV Profits, N.Y. Times, April 13, 2013, at B1. ..... 16
`
`
`
`
`
`
`
`
`
`vii
`
`Walter Ciciora et.al., Modern Cable Television
`Technology (2d ed. 2004) ................................. 18, 19
`
`
`Convergence Consulting Group Ltd., The Battle for
`the North American (US/Canada) Couch Potato:
`Online & Traditional TV and Movie Distribution
`(2013) ...................................................................... 16
`
`
`Robert W. Crandall & Harold Furchtogott-Roth,
`Cable TV: Regulation or Competition? (1996) ........ 6
`
`
`The Digital TV Transition: Reception Maps, Federal
`Communications Commission,
`http://tinyurl.com/digitaltvmap (last visited Mar.
`31, 2014) ................................................................. 11
`
`
`Editorial Board, If a Cable Giant Becomes Bigger,
`N.Y. Times, Feb. 14, 2014 at A30 .......................... 18
`
`
`Glenn Doel, ITU/ASBU Workshop on Frequency
`Planning and Digital Transmission, International
`Telecommunication Union (Nov. 23rd, 2004),
`http://tinyurl.com/analogdigital ............................ 10
`
`
`Joe Flint & Meg James, Rising Sports Programming
`Costs Could Have Consumers Crying Foul, L.A.
`Times (Dec. 1, 2012),
`http://tinyurl.com/flintjames2 ............................... 21
`
`
`Joe Flint & Meg James, Sports Cost, Even If You
`Don’t Watch, L.A. Times, Dec. 2, 2012, at A1 ....... 20
`
`
`Roy Furchgott, The Downside to Digital TV, N.Y.
`Times, April 24, 2008, at C6 .................................. 10
`
`
`
`
`
`
`
`
`
`viii
`
`Warren Grimes, The Distribution of Pay Television in
`the United States: Let an Unshackled Marketplace
`Decide, 5 J. Int’l Media & Entertainment Law 1,
`17-18 (2014) ............................................................ 19
`
`
`Thomas W. Hazlett, Private Monopoly and the Public
`Interest: An Economic Analysis of the Cable
`Television Franchise, 134 U. Pa. L. Rev. 1335
`(1986) ...................................................................... 18
`
`
`Michael L. Katz et. al., An Economic Analysis of
`Consumer Harm from the Current Retransmission
`Consent Regime 42-44 (2009) ................................ 13
`
`
`Ian King, How ‘Cord Never’ Generation Poses Sales
`Drag for Pay TV, Bloomberg (Sept. 17, 2013, 9:01
`PM), http://tinyurl.com/cordnever ......................... 17
`
`
`Leadership Conference on Civil Rights, Transition in
`Trouble: Action Needed to Ensure A Successful
`Digital Television Transition 25 (2008) ................ 11
`
`
`Mark A. Lemley, Property, Intellectual Property, and
`Free Riding, 83 Tex. L. Rev. 1031 (2005) ........ 14, 15
`
`
`James Miller & James E. Prieger, The Broadcasters’
`Transition Date Roulette: Strategic Aspects of the
`DTV Transition, 9 J. Telecomm. & High Tech. L.
`437 (2011) ............................................................... 10
`
`
`Michael O’Connell, Nielsen Formalizes Plans to
`Incorporate Mobile Views Under TV Ratings
`Purview, Hollywood Reporter (October, 27, 2013,
`10:28 AM), http://tinyurl.com/HRNielsen ............. 16
`
`
`
`
`
`
`
`
`
`ix
`
`Maria A. Pallante, The Next Great Copyright Act, 36
`Colum. J.L. & Arts 315 (2013) .............................. 15
`
`
`Richard Sandomir, James Andrew Miller & Steve
`Eder, To Protect Its Empire, ESPN Stays on
`Offense, N.Y. Times, Aug. 27, 2013, at A1 ............ 20
`
`
`Frederic M. Scherer & David Ross, Industrial Market
`Structure and Economic Performance, 667-68 (3d
`ed. 1990) ................................................................. 20
`
`
`
`
`
`1
`
`INTEREST OF THE AMICI CURIAE1
`
`
`
`
`
`this brief
` Amici curiae respectfully submit
`pursuant to Supreme Court Rule 37 in support of
`Respondent. Warren Grimes is a professor of law at
`Southwestern Law School where he teaches and
`writes about antitrust law and communications law
`issues. He is the co-author (with Professor Lawrence
`A. Sullivan) of a noted treatise: The Law of
`Antitrust: An Integrated Handbook (2d ed. 2006).
`
`
`
` Shubha Ghosh is a professor of law at the
`University of Wisconsin Law School who has written
`extensively on intellectual property policy as it
`relates to competition and innovation. Robert H.
`Lande is the Venable Professor of Law at the
`University of Baltimore School of Law. He is the co-
`founder and director of the American Antitrust
`Institute, and twice the recipient of the Cohen Award
`for
`the best antitrust and
`trade regulation
`scholarship.
`
`
`
`
`1 All parties have consented in writing to the filing of this brief.
`No counsel for a party authored this brief in whole or in part,
`and no counsel or party made a monetary contribution intended
`to
`fund the preparation or submission of this brief.
`Southwestern Law School provides financial support for
`activities related to faculty members’ research and scholarship,
`which helped defray the costs of preparing this brief. (The
`School is not a signatory to the brief, and the views expressed
`here are those of the amici curiae.) Otherwise, no person or
`entity other than the amici curiae or its counsel has made a
`monetary contribution intended to fund the preparation or
`submission of this brief. This brief was researched and
`prepared in the Amicus Project Practicum at Southwestern Law
`School.
`
`
`
`
`
`
`
`2
`
` Joshua P. Davis is Associate Dean for Academic
`Affairs, Professor and Director, Center for Law and
`Ethics at the University of San Francisco School of
`Law and an Advisory Board member and Senior
`Fellow at the American Antitrust Institute. He
`writes, among other topics, about antitrust law.
`Christopher L. Sagers is the James A. Thomas
`Distinguished Professor of Law at Cleveland State
`University,
`where
`he
`teaches
`Antitrust,
`Administrative Law, and other courses. He has
`written about antitrust and economic regulatory
`issues throughout his career and has testified about
`them before the U.S. Congress and the Antitrust
`Modernization Commission.
`
`
`
` Amicus Andrew Pletcher is an upper-division J.D.
`candidate at Southwestern Law School with
`extensive academic
`interest and professional
`experience in the entertainment industry. Michael
`M. Epstein is a professor of law and the Director of
`the pro bono Amicus Project at Southwestern Law
`School. He is the Supervising Editor of the Journal
`of International Media and Entertainment Law,
`published by the American Bar Association and the
`Donald E. Biederman Entertainment and Media Law
`Institute.
`
`
`
` Amici have no interest in any party to this
`litigation, nor do they have a stake in the outcome of
`this case other than their interest in correct,
`consistent interpretation of copyright law that allows
`for the emergence of new technologies that benefit
`both copyright holders and the general public.
`
`
`
`
`
`
`
`
`
`3
`
`SUMMARY OF THE ARGUMENT
`
`free-market
`is a healthy
` The Aereo system
`response to a dysfunctional and anticompetitive
`television distribution system that raises prices,
`reduces output, and denies consumers meaningful
`choice. Petitioners predictably oppose any new
`technology that could change the status quo that is
`highly beneficial to them.
`
`
`
` Petitioners come before this Court as beneficiaries
`of
`two
`limited government monopolies: Each
`Petitioner has been granted free access to the public
`spectrum in return for a commitment to serve the
`public interest by providing local news and public
`affairs programming. In addition, Petitioners and
`their business partners have been granted certain
`exclusive rights under copyright law that assures a
`fair return in the free market for creative investment
`in broadcast television.
`
`
`
` Petitioners seek to undermine their public interest
`obligation to free, over-the-air local television by
`invoking
`copyright
`law.
` However,
`their
`interpretation
`is at odds with
`the venerable
`telecommunications policies established by Congress,
`implemented by
`the Federal Communications
`Commission, and repeatedly recognized by this
`Court. If accepted, Petitioner’s interpretation will
`undermine essential First Amendment values of
`assuring the public has access to a multiplicity of
`information and opinion.
`
`
`
` The relief Petitioners seek is at odds with both
`copyright and antitrust law. Copyright law supplies
`the economic incentive to create by granting the
`
`
`
`
`
`
`
`4
`
`author limited exclusive rights of exploitation to
`ensure a fair return in the free-market. The Aereo
`system simplifies access to over-the-air broadcast
`television that ensures a fair return for Petitioners
`through
`increased advertising revenue.
` The
`Sherman Antitrust Act protects competition and is
`designed to ensure consumer welfare, a concept that
`includes maximizing output, quality, and consumer
`choice. Granting Petitioners’ relief would decrease
`the output of local television broadcasting and leave
`consumers with very
`limited,
`technologically
`deficient and expensive choices for obtaining local
`programming.
`
`
`ARGUMENT
`
`Interest
`
`In
`
`
`I. TECHNOLOGY SUCH AS AEREO’S EXPANDS
`THE WIDE DISSEMINATION OF CREATIVE AND
`ESSENTIAL BROADCASTING IN FURTHERANCE OF
`THE GOALS OF THE FIRST AMENDMENT AND
`COMMUNICATIONS LAW.
`
`
`A. The Substantial Public
`Broadcasting.
`
`in the
` Broadcasting plays an essential role
`marketplace of ideas. Local television broadcasting
`is a vital local service that provides the public with
`access to “social, political, esthetic, moral and other
`ideas and experiences.” Red Lion Broadcasting Co.
`v. FCC, 395 U.S. 367, 390 (1969). The importance of
`local broadcasting “‘can scarcely be exaggerated, for
`broadcasting is demonstrably a principal source of
`information and entertainment for a great part of the
`Nation’s population.’” Turner Broadcasting System,
`Inc. v. FCC, 512 U.S. 622, 663 (1994) (“Turner I”)
`
`
`
`
`
`
`
`5
`
`(quoting United States v. Southwestern Cable Co.,
`392 U.S. 157, 177 (1968)).
`
`
`
` Congress granted the Federal Communications
`Commission (“Commission”) “comprehensive powers”
`over the broadcast spectrum. Southwestern Cable
`Co., 392 U.S. at 173 (citing National Broadcasting
`Co. v. United States, 319 U.S. 190, 219 (1943)).
`Because of spectrum scarcity, the drafters of the
`Communications Act of 1934 gave the Commission
`power
`to grant broadcast
`licenses based on
`consideration of “public convenience, interest, or
`necessity.” 47 U.S.C. § 307(a). This has been
`commonly called the “public interest” standard.
`
`
`
` The overall goal of Congress was to maximize the
`benefits of the spectrum for the people of the United
`States. Section 303(g) of the Communications Act of
`1934 provides for “the larger and more effective use
`of the radio in the public interest.” National
`Broadcasting Co., 319 U.S. at 217. To ensure this
`goal, Congress determined the spectrum should be
`allocated to give each community an over-the-air
`source of information in exchange for broadcasting
`matters of local concern. Turner I, 512 U.S. at 663
`(citing Southwestern Cable Co., 392 U.S. at 173-74
`(1968)).
`
`
`
` As sales of televisions increased in the 1940’s, the
`demand grew for broadcast over-the-air television in
`areas beyond local signal coverage. See James C.
`Goodale & Rob Frieden, All About Cable § 1.02
`(2006). The earliest cable systems (called local
`community antenna systems or “CATV”) were
`created to extend broadcasting signals to areas
`where reception was “non-existent or difficult.”
`
`
`
`
`
`
`
`6
`
`Clarksburg Pub. Co. v. FCC, 225 F.2d 511, 516-17
`n.16 (D.C. Cir. 1955) (describing the early CATV
`systems).
` These systems were limited to the
`retransmission of broadcast stations and posed no
`threat to over-the-air broadcasting. The systems
`“could carry only a few channels, reflecting the state
`of transmission technology and the scarcity of nearby
`channels to retransmit.” Robert W. Crandall &
`Harold Furchtogott-Roth, Cable TV: Regulation or
`Competition? 1-2 (1996).
`
`
`
` Over the next thirty years, local community
`antenna systems quickly grew.
` In 1962, the
`Commission began limiting CATV systems in an
`effort to protect local broadcasters. There was
`increasing fear that the unregulated importation of
`CATV systems could cause the demise of local
`television broadcasting. “We think the record amply
`supports the Commission’s conclusion that the
`unconditional grant of appellant’s application would
`probably
`result
`in
`the
`demise
`of
`[local
`broadcasting.]”.
` Carter Mountain Transmission
`Corp. v. FCC, 321 F.2d 359, 365 (D.C. Cir. 1963),
`cert. denied, 375 U.S. 951 (1963).
`
`
`
` In the 1980’s, television entered a long period of
`deregulation. See James C. Goodale & Rob Frieden,
`All About Cable §1.14 (2006) (discussing the 1984
`Cable Act). Although there was substantial growth
`for the cable industry, consumers complained about
`rising prices and dismal customer service. In 1992,
`Congress responded by enacting the Cable Television
`Consumer Protection and Competition Act of 1992,
`Pub. L. No. 102-385, 106 Stat. 1460 (“1992 Cable
`Act”). See Turner I, 512 U.S. at 630-32 (describing
`the Act’s provisions). In the Act, Congress affirmed
`
`
`
`
`
`
`
`7
`
`the “substantial governmental interest in promoting
`the continued availability of such free television
`programming, especially for viewers who are unable
`to afford other means of receiving programming.”
`§2(a)(12), 106 Stat. 1461. Congress found “broadcast
`television stations continue to be an important
`source of local news and public affairs programming
`and other local broadcast services critical to an
`informed electorate.” 1992 Cable Act §2(a)(11). 106
`Stat. 1461.
`
`
`
` In 1994, this Court affirmed the “important and
`substantial federal interest” in the preservation of
`broadcast programming. Turner I, 512 U.S. at 647
`(citing Capital Cities Cable, Inc. v. Crisp, 467 U.S.
`691, 714 (1984)). Broadcasters make a “valuable
`contribution to the Nation’s communications system”
`and the 1992 Cable Act was designed to “ensure that
`all Americans, especially those unable to subscribe to
`cable, have access to free television programming –
`whatever its content.” Turner I, 512 U.S. at 649.
`“The interest in maintaining the local broadcasting
`structure does not evaporate simply because cable
`has come upon the scene.” Id. at 663.
`
`
`
` Petitioners enjoy the benefits of two government-
`granted limited monopolies: A free license to obtain
`the public spectrum, worth millions of dollars, in
`exchange for providing valued local news and
`informational programming; and a limited copyright
`monopoly on in-house programming, ensuring a fair
`return as an incentive to produce creative content.2
`They seek from this Court relief that undermines the
`
`
`2 Petitioners also enjoy limited rights as exclusive licensees of
`other copyright holders that create television programming.
`
`
`
`
`
`
`
`8
`
`availability of over-the-air broadcasting to increase
`profits from their individual copyright interests.
`
`
`
` Petitioners are free to relinquish their valuable
`broadcast
`license
`to explore exploiting
`their
`copyright
`interest on channels without public
`interest requirements such as subscription-only
`channels or paid-download applications. Instead,
`Petitioners have opted to continue benefiting from
`the distribution of their programming via spectrum
`broadcasting because it remains the most widely
`accessible method of television viewing. As long as
`they do so, they must uphold their end of the bargain
`by supporting the wide accessibility of broadcast
`television.
`
`
`B. Aereo Promotes First Amendment Values
`By Simplifying Public Access To Free
`Broadcast Television.
`
` “Assuring the public has access to a multiplicity of
`information sources is a governmental purpose of the
`highest order, for it promotes values central to the
`First Amendment.” Turner I, 512 U.S. at 663; see
`also Turner Broadcasting System, Inc. v. FCC, 520
`U.S. 180, 226-27 (1997) (Breyer, J., concurring)
`(discussing the First Amendment rights of the over-
`the-air broadcast viewer).
` This
`interest
`is a
`cornerstone of our democratic government and a
`“basic tenet of our national communications policy.”
`United States v. Midwest Video Corp., 406 U.S. 649,
`668 n.27 (1972) (citing Associated Press v. United
`States, 326 U.S. 1, 20 (1945)). Broadcast television
`furthers public access to the “uninhibited, robust,
`and wide-open” debate on public issues. New York
`Times Co. v. Sullivan, 376 U.S. 254, 270 (1964).
`
`
`
`
`
`
`
`9
`
`
`
` Aereo strengthens central First Amendment values
`by expanding public access to essential local news,
`educational, and public affairs programming. The
`Aereo system is designed to mirror the operation of a
`traditional, rooftop antenna that allows the user to
`control every aspect of a broadcast program from
`their laptop, tablet, or smartphone. When a user
`logs onto the system, an individual antenna is
`automatically assigned to that user and turns to the
`broadcast channel they select. Because a user
`watches programming via a remote antenna housed
`on Aereo’s premises, the broadcast signal
`is
`potentially free of many of the technical limitations
`of the digital spectrum and cannot be “blacked out”
`because of broadcaster disputes beyond the television
`viewer’s control.
`
`
`1. The technical limitations of digital over-
`the-air
`spectrum
`broadcasting.
`
`to digital over-the-air
`transition
` The 2009
`broadcasting resulted in some Americans being
`unable to access over-the-air broadcast television
`because of increased limitations of the broadcast
`spectrum. While digital signals offer many added
`benefits
`including higher picture quality and
`multicasting, the transition forced many Americans
`to purchase new technology to receive free over-the-
`air local news and public affairs programming.3
`
`3 The United States attempted to alleviate the transition’s
`burden on consumers by providing for a digital-to-analog
`converter box coupon program. Deficit Reduction Act of 2005,
`Pub. L. No. 109-171, 120 Stat. 23 §§ 3005(a)-3005(b). A
`converter box allowed the consumer to convert any channel
`broadcast in digital television service into a format that the
`
`
`
`
`
`
`
`10
`
`Compared to analog signals, digital signals have a
`higher drop-off in field strength as the signal
`increases in distance from the source. Study of
`Digital Television Field Strength Standards and
`Testing Procedures, 20 FCC Rcd. 19504, 19512
`(2005); Glenn Doel, ITU/ASBU Workshop on
`Frequency Planning and Digital Transmission,
`International Telecommunication Union (Nov. 23rd,
`2004), http://tinyurl.com/Digitalspectrum (comparing
`analog and digital signal drop-off). With an increase
`in distance, there is a particular point where the
`digital signal can no longer be processed by the
`antenna resulting in the “‘digital cliff effect,’ so-called
`because reception is either perfect or non-existent.”
`James Miller & James E. Prieger, The Broadcasters’
`Transition Date Roulette: Strategic Aspects of the
`DTV Transition, 9 J. Telecomm. & High Tech. L. 437,
`448 (2011).
`
`
`
` In addition, compared to analog signals, digital
`signals suffer from an increase in interference from
`large hills, buildings and man-made objects. The
`Commission has referred to this problem as “building
`loss.” Study of Digital Television Field Strength
`Standards and Testing Procedures, 20 FCC Rcd.
`19504, 19548 (2005); Roy Furchgott, The Downside to
`Digital TV, N.Y. Times, April 24, 2008, at C6 (noting
`digital reception is “more easily blocked” than analog
`reception).
`
`
`
` Finally, the reception of digital broadcast signals is
`heavily dependent on the height and quality of the
`antenna. The Commission has set the digital signal
`
`
`consumer can display on television receivers designed to receive
`and display analog television service.
`
`
`
`
`
`
`
`11
`
`strength model on an assumption of an outdoor
`antenna thirty feet above ground level. The Digital
`Reception Maps,
`Federal
`TV
`Transition:
`Communications
`Commission,
`http://tinyurl.com/digitaltvmap (last visited Mar. 31,
`2014). The model fails to account for over-the-air
`reception difficulties affecting viewers in urban areas
`who live in large multi-unit buildings without access
`to a rooftop antenna. See Leadership Conference on
`Civil Rights, Transition in Trouble: Action Needed to
`Ensure A Successful Digital Television Transition 25
`(2008) (citing a Centris market research firm study)
`(“These digital gaps are not confined to sparsely
`populated rural areas; rather . . . millions of viewers
`in New York, Los Angeles, Boston and other major
`metro areas will experience digital gaps
`in
`coverage.”).
`
`
`2. Aereo provides access to broadcast
`television during blackouts disputes
`between broadcasters and distributors.
`
` Aereo’s system allows cable and satellite customers
`to access local, over-the-air broadcasting during
`dispute blackouts between programmers and
`distributors. The 1992 Cable Act recognized that the
`common
`ownership
`of
`cable
`operators and
`programmers made it more difficult for localized
`programmers to secure carriage. 1992 Cable Act
`§2(a)(5). Because of the unique nature of cable
`television, the operator could “prevent its subscribers
`from obtaining access to programming it chooses to
`exclude. A cable operator, unlike other speakers in
`the media, can thus silence the voice of competing
`speakers with a mere flick of the switch.” Turner I,
`512 U.S. at 656.
`
`
`
`
`
`
`
`12
`
`
`
`television
`cable
`acknowledged
` This Court
`distributors are the “gatekeeper[s]” of programming
`delivered into American households. Id. Their
`ability to “flick the switch” and turn off programming
`runs afoul of the “government purpose of the highest
`order”
`in
`assuring
`“‘the widest
`possible
`dissemination of
`information from diverse and
`antagonistic sources.’” Turner I, 512 U.S. at 663-64
`(quoting United States v. Midwest Video Corp., 406
`U.S. 649, 668 n.27 (1972) (plurality opinion)).
`
`
`
` In recent years, Americans have increasingly
`suffered the “flick of the switch” from disagreements
`between broadcasters and distributors. As a result
`of the “must-carry” provisions dictated under the
`1992 Cable Act, each cable operator must carry the
`signals of the local commercial broadcast television
`stations or negotiate directly with distributors for
`their programming. 47 U.S.C. § 534(a) (“must
`carry”);; 47 U.S.C. § 325(b) (retransmission). If a
`broadcaster and a distributor are unable to reach an
`agreement, a distributor may not retransmit the
`broadcaster’s signal and cable subscribers are
`blacked out. 47 U.S.C. § 325(b)(1)(A).4
`
`
`
` Between 2010 and 2013, television blackouts have
`increased from an average of twelve to one hundred
`and twenty-seven a year. American Television
`Alliance, How Long Before We’re All In the Dark? 1
`(2013),
`at
`available
`http://tinyurl.com/howlongindark;
`see American
`Television Alliance, Broadcaster Retransmission
`
`4 Congress later extended the “must-carry” provisions to
`satellite carriers in 1999 through the Satellite Home Viewer
`Improvement Act. 17 U.S.C. § 122.
`
`
`
`
`
`
`
`13
`
`Blackouts 2010-2013 (2014) (listing blackouts and
`their affected markets).
` The blackouts have
`prevented access to critical sources of local news,
`public affairs and national programming, including
`the World Series and the Academy Awards. In the
`Matter of Amendment of the Commission’s Rules
`Related to Retransmission Consent, 26 FCC Rcd.
`2718, 2726 (2011). While some blackouts have been
`resolved in a matter of weeks, one standoff blackened
`TV screens for 10 months in thirteen markets.
`Michael L. Katz et. al., An Economic Analysis of
`Consumer Harm from the Current Retransmission
`Consent Regime 42-44 (2009).
`
`
`
`II. TECHNOLOGY SUCH AS AEREO’S PROVIDES
`CONSUMERS A MEANINGFUL ALTERNATIVE TO A
`BLOATED
`ANTICOMPETITIVE
`TELEVISION
`DISTRIBUTION MODEL WITHOUT DENYING
`COPYRIGHT OWNERS A FAIR RETURN.
`
`A. The Aereo System Furthers Petitioners’
`Economic
`Incentive To Create By
`Increasing Overall Advertising Revenue.
`
`
`
` Both parties ask this Court to interpret the “public
`performance” right as applied to a new technology
`neither discussed nor anticipated by Congress in the
`1976 Copyright Act. This Court has determined that
`when technology has rendered a
`literal term
`ambiguous, the Copyright Act “must be construed in
`light of [its] basic purpose.” Sony Corp. of Am. v.
`Universal City Studios, Inc., 464 U.S. 417, 431-32
`(1984) (citing Twentieth Century Music Corp. v.
`Aiken, 422 U.S. 151, 156 (1975). Copyright law was
`created to “stimulate artistic creativity for the
`
`
`
`
`
`
`
`14
`
`general public good” so that the public can receive
`the general benefits from the author’s labor. Sony
`Corp. of Am., 464 U.S. at 432 (citing Aiken, 422 U.S.
`at 156). The relationship between the author and
`the public is complementary. Eldred v. Ashcroft, 537
`U.S. 186, 212 n.18 (2003).
`
`
`
` Copyright law “supplies the economic incentive t
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