In a hearing at the Supreme Court this morning that pits a new technology company against legacy television broadcasters, the justices appeared torn. It was clear from their questions that they think Aereo, a service that lets its subscribers stream broadcasts recorded from the public airwaves, has used technological workarounds to avoid paying fees to content creators. But they also appear anxious about undermining the legal basis for technological innovations like cloud storage. How they decide to balance those two imperatives will determine a suddenly more-uncertain outcome of the important case.  Aereo CEO Chet Kanojia leaves the U.S. Supreme Court after oral arguments.(Alex Wong/Getty Images)  “I’m not saying it’s outcome determinative, or necessarily bad, I’m just saying your technological model is based solely on circumventing prohibitions that you don’t want to comply with, which is fine,” Chief Justice John Roberts told David Frederick, who represented Aereo. “Lawyers do that.” He was referring to the fact that Aereo uses many small antennas instead of big ones to give the impression that they are renting equipment to individuals, rather than broadcasting from one large antenna.  Roberts’s colleagues seemed to agree with him that Aereo knows where the law lies, especially on copyright, and is determined to skirt it. ”If I take a [copy] of a record and duplicate it a million times the way you’re doing it, and I go out and sell each of those copies to the public, than I am violating the Act. So why is it that you are not?,” Justice Sonia Sotomayor wanted to know. And by Aereo’s reasoning, ”Roku is paying a license for no reason?”Sotomayor asked. “They sold me a piece of equipment.”  Sotomayor does not quite have the right of it: Roku is a piece of equipment that owners can use to access services they subscribe to, like Netflix, Hulu Plus and Amazon, and which have already paid licensing fees that permit them to distribute the content their subscribers pay for. Aereo, by contrast, lacks that intermediate element of connecting its subscribers to other subscription services. Throughout the hearing, Frederick repeatedly insisted that Aereo is an equipment rental company, rather than a company that provides content. But Sotomayor’s question, though wrong in the details, did draw out a distinction between how a Roku or Apple TV and Aereo function.  Throughout the hearing, the justices and the lawyers struggled to find analogues that would help them pick through the complicated legal and technical subjects at stake. Justice Stephen Breyer invoked the image of phonographs sent through the mail to try to draw out questions of what constitutes a performance, the distribution of recordings, or the actual act of pressing play. The reference to older technology may have seemed anachronistic given the tools in question, but the question was aimed at Aereo’s contention that its consumers, not the company itself, are putting on private performances when they start hitting buttons.  Former solicitor general Paul Clement, arguing for the broadcasters, repeatedly invoked valet parking and coat check services to try to clarify the difference between Aereo and the cloud storage services the company says will be imperiled by an unfavorable decision. Clement suggested that cloud storage works like those real-world services: you have to put something you have already purchased into them before you can get something out. By contrast, he suggested that Aereo must be a content provider, because consumers do not upload content to it, or sign in to a service that gives them access to their purchases. Frederick, by contrast, argued that Aereo customers were essentially uploading content by requesting streams.  “Are we somehow catching other things that really will change life and shouldn’t, such as the cloud?” Breyer asked, in a question that hung over the rest of the hearing. Both Clement and Frederick seized on that question, Clement urging the justices not to feel they had to settle the legal issues around cloud storage, while Frederick insisted that the two questions are inextricable. The justices’ sense that Aereo is ducking out of the requirements imposed on other players in the field, and their desire not to thwart technological innovation, make forecasting their decision a more complicated task than observers might have assumed it to be this morning.  But whatever mistakes they made, and however inept some of the analogies, it was bracing to watch the justices try to work out these technical details in public. Last month, Walter Dellinger wrote about what happened in Griswold v. Connecticut when the justices were too prim to actually discuss the sorts of contraception at issue in the case.  “The resulting confusion about methods of birth control mattered. It was said that ‘the devices’ were ‘commonly and notoriously sold in Connecticut drug stores,’” Dellinger wrote. “That led some justices to think that if contraceptives were available despite the law, nothing much was at stake in the case. But only condoms were sold openly.”  Such a misunderstanding is unlikely in the Aereo case. The hearing this morning may have been an illustration of some of the limitations of the justices’ technical knowledge. But the questions they are attempting to parse are also ones that dance on the head of a pin, or at least a dime-sized Aereo transmitter. It is useful for all of us that they spent today trying to sort them out in public.
The justices see a new media company as a clever circumvention of the rules, but worry about the harm they might do in ruling against it.