A case going before the Supreme Court next Tuesday pits traditional television broadcasters against Aereo, which lets customers record broadcast TV in their local markets and then watch programs via television, computer, tablet or smartphone. The technology that makes it possible is a farm of thousands of tiny antennas, each smaller than a nickel.
"It is just racks and racks of storage equipment and transcoding equipment for rendering the signal, storing the signal, and providing recording functionality for the consumers," says Aereo's chief executive, Chet Kanojia, at one such data center, a 10,000-square-foot facility in Brooklyn.
The antennas pick up signals coming from the nearby Empire State Building and the Freedom Tower. Customers are assigned an antenna and a DVR, they choose what to record and when, for a few dollars a month.
"The important thing is it is a one-to-one relationship," Kanojia says. "So, one antenna, one file, one stream, all under a consumer's control at all times."
The case – in which some say billions of dollars are potentially at stake – hinges on what constitutes a public broadcast versus a private one, under copyright law.
Tom Nachbar, a professor at the University of Virginia Law School, frames the question this way: "By performing that service for thousands of people at the same time, although totally individually, are they doing what is essentially a transmission to the public?"
When it comes to copyright, there's a difference between a private performance – watching or recording something in your home, for example – and a public one – taking a copyrighted work and distributing it widely.
Aereo's opponents say the company is doing the latter: "They're grabbing signals out of the air without paying for them, and then trying to make a profit off of that," says attorney Neal Katyal, who is advising the broadcasters suing Aereo. "That's not the American way."
Every year, broadcasters invest billions of dollars in creating content, Katyal says, and they recoup those costs with ads. On top of that, Nachbar adds cable providers pay for the right to distribute local channels. Aereo, which serves 13 markets, doesn't, and that's why the case could be so monumental.
If the court rules in Aereo's favor, those cable providers could argue they shouldn't have to pay the broadcasters either.
"It really is a threat to the current structure of the way broadcast television works," *Nachbar notes.