Aereo made the wrong case

esb1Aereo‘s main appeal in the first place was helping viewers get over-the-air TV. If they had restricted their business and legal cases to that, instead of this…

Record & Stream Live TV Online with Aereo Cloud DVR

Coming soon to 19 more cities!

… they might still be in business. But nothing in that pitch — the last one they made, in the final version of their website while they were operating — said they weren’t much different than a cable company. So, not surprisingly, the Supreme Court smacked them down for being a cable wolf in cloud wool. Here’s how the Court explained the decision:

The Copyright Act of 1976 gives a copyright owner the “exclusive righ[t]” to “perform the copyrighted work publicly.” 17 U.S.C. §106(4). The Act’s Transmit Clause defines that exclusive right to include the right to “transmit or otherwise communicate a performance . . . of the [copyrighted] work . . . to the public, by means of any device or process, whether the members of the public capable of receiving the performance . . . receive it in the same place or in separate places and at the same time or at different times.” §101.

I submit that Aereo failed because they didn’t stick with what they were for in the first place. Instead they decided to ride the “cloud” buzz, which confused the offering first and the Court second.

To understand how they might have won, you need some background.

Before the ’76 law, cable was called CATV, for Community Antenna TeleVision. CATV answered the market’s need for clear signals where reception of over-the-air signals was poor or absent. But once “cable networks” (TBS, HBO, ESPN, etc.) showed up, and it was obvious that the handful of legacy broadcast networks (ABC, CBS, NBC, PBS, Univision) would be outnumbered by new cable networks, those networks (and their programming sources) wanted to be paid by these new distributors, who were charging customers for retailing their goods (legally, “performances”). The ’76 law gave them leverage to force those payments.

Over-the-air (OTA) TV was still available for anybody to receive for free using an antenna, of course. But this was a legacy grace — an exception to the rule of closed distribution through cable and satellite. But the distinction was clear. Cable and satellite were Pay TV, and OTA was Free TV. The selection of free signals was (and remains) relatively small, but not much smaller than “basic” cable.

As the number of channels available on Pay TV climbed, the percentage of people watching free TV went down. From a Consumer Electronics Association report in July 2013:

Arlington, VA – 07/30/2013 – New research released today from the Consumer Electronics Association (CEA) ® found that just seven percent of American TV households rely solely on an antenna for their television programming. The findings of the new study, U.S. Household Television Usage Update, are consistent with CEA’s 2010 research which found eight percent of TV households reported using an antenna only for television programming. According to historical CEA research, there has been a gradual decline in the percentage of TV households using antennas since 2005. The  phone survey of 1,009 U.S. adults is comparable to a 2012 Nielsen study indicating nine percent of all U.S. TV households are broadcast TV/over-the-air only, a decrease from 16 percent in 2003.

One reason for this is simply that there are more channels on cable than over the air. The other reason — the one that matters to Aereo — is that free TV reception nearly went away, thanks to the FCC’s mandated transition of OTA TV from analog to digital (DTV) transmission, which finished in June 2009.

For TV viewers, the DTV transition required new equipment to receive signals that were much harder to get. If you lived in any place shadowed from direct line-of-sight to signal sources, you were out of luck.

In the analog era, you could get signals with rabbit ears and a loop or a bowtie antenna on your TV, if you lived in an urban or suburban area. The pictures might have “snow” or “ghosts,” but you could see them. If you lived in an outlying suburb or a rural area, you would need a rooftop antenna. But DTV was much harder to get, and lots of people gave up and went to cable or just bailed from the whole thing.

It’s essential to note that the FCC’s claim that reception after the DTV transition would be “equivalent” was simply wrong. Here are the FCC’s maps of “equivalent” coverage after the transition. Text on that page says, “Signal strength calculations are based on the traditional TV reception model assuming an outdoor antenna 30 feet above ground level. Indoor reception may vary significantly.”

This is hokum. You’re not getting the signal without a good antenna, ideally placed, and even then your odds were short, because conditions need to be ideal.

The simple fact is that the DTV transition left millions of free TV viewers in the lurch — and that lurch was Aereo’s market. So here’s my point: There would have been no Aereo without the DTV transition.

Go to that last link and type in this zip code: 10040. It’s in the north end of Manhattan, where I am temporarily domiciled. You’ll get back a chart showing eleven strong signals, four moderate ones, and four weak ones. Our apartment is in that zip code, and we get nothing. Zip. Even with a directional outdoor antenna. Believe me, I’ve tried. There are a hundred blocks of buildings and terrain between us and the Empire State Building. If we want local over the air (OTA) TV, our only choice is — or was — Aereo.

By serving urban areas that got shafted by the DTV transition, Aereo is a perfect example of the marketplace at work: supply fulfilling demand. That should have been their case.

If Aereo had simply met the market’s demand for lost over-the-air signals, and supplied a DVR app for customers (rather than putting the DVR in The Cloud), they might have had a winnable case. But they didn’t argue that. Instead they stood behind the cloud and argued, in effect, for what they appeared to be: a way of circumventing copyright obligations by using over-the-air reception of signals as a loophole. Even Justice Scalia, in his dissent, said he wasn’t an Aereo fan: “I share the Court’s evident feeling that what Aereo is doing (or enabling to be done) to the Networks’ copyrighted programming ought not to be allowed.”

In his statement in response to the decision, Aereo CEO Kanojia said,

Consumer access to free-to-air broadcast television is an essential part of our country’s fabric. Using an antenna to access free-to-air broadcast television is still meaningful for more than 60 million Americans across the United States.  And when new technology enables consumers to use a smarter, easier to use antenna, consumers and the marketplace win. Free-to-air broadcast television should not be available only to those who can afford to pay for the cable or satellite bundle.

He’s kidding himself. OTA reception may be “meaningful” for 60 million Americans, but most of those people don’t care any more. And neither do today’s TV content production and distribution systems, which include far more than Hollywood and the broadcast/cable/satellite TV industries. They include you and me.

Still, some number of millions of people do care, and can’t get the free OTA signals they used to get in the analog age. That was Aereo’s market, and now that market is back in the lurch, probably permanently.

I believe the Court’s decision did two things:

  1. Positioned over-the-air transmission as little other than a checkbox requirement for stations to maintain “must carry” status with cable systems. Since these signals are expensive to maintain, it’s a matter of time before they go down with the setting sun. This will require regulatory easing (for example, by maintaining “must carry” in the absence of an actual signal, which is already partially the case anyway, since the signals have been lost to a great many people). Watch for that to happen in the next few years.
  2. Finished positioning cable as simply a paid distribution system for licensed content. The legal and historical connections to Community Antenna TV are now completely severed. To TV’s sources and distributors, Pay TV is the Only TV.

If you go to Aereo’s website now, you see a letter from Chet Kanojia. Here’s the money graf:

The spectrum that the broadcasters use to transmit over the air programming belongs to the American public and we believe you should have a right to access that live programming whether your antenna sits on the roof of your home, on top of your television or in the cloud.

The legal case I outlined above would also have been stronger if Aereo had stuck with its original business case: charging viewers for access to their own antenna — not in “the cloud,” but in the physical world, looking directly at the signal source.

If Aereo had then provided apps on the receiving side (for tuning and recording), they would have been in a much better position, at least conceptually.

The Supreme Court understands demand and supply. If Aereo had said, “We’re only serving over-the-air TV viewers who lost their signals in the DTV transition,” the decision would have been framed as one between standing law and market demand. The Court might still have decided in favor of the law, but it would have been clear to them that market demand was in play. But Aereo clouded their case, literally. So the Supremes fell back on what they understood, which was the ’76 law.

Did “the cloud” take collateral damage? Could be. We’ll see.

Bonus link, with prophesy: TV 3.0.


  1. Mike Warot’s avatar

    I strongly suspect that darknet connections are all we’re going to have left in a few years for getting non-filtered, non-tracked flows of “content”, now that broadcast is dead.

    If you want to be able to share content in the future, now is the time to stock up on USB sticks and devices which can boot from a stick, never need internet, and can read/write other sticks, like reasonably new laptops.

  2. Doc Searls’s avatar

    Mike, I don’t grant our overlords that much power. Or malice. The pendulum has swung to the max in the centralized/mass-market/controlled direction. It’s starting to swing back.

  3. Bruce John Shourt’s avatar

    I disagree with some of your assertions about OTA TV reception. Yes, for many it may be more difficult to receive now compared to analog TV transmission because of the characteristic known as the “cliff effect” which essentially means all-or-nothing or if the quality of the received bit stream is not consistent then the “all” is intermittent. That is because in many cases the reception is similar to cell phone reception. Moving the antenna just a few degrees in direction, height, or position can make the all-or-nothing difference. That applies to indoor as well as outdoor antennas. So you are right in that some people simply gave up but that is because they did not follow the FCC’s instructions about how to receive digital television by experimenting with the antenna placement. On the other hand, people far away from good strong reception to the extent that it was not worth watching analog TV or there was virtually no picture at all, now with the proper antenna or even their existing antenna, they can receive a perfect high definition picture. So these added viewers offset some of the lost viewers. I suspect that in your situation where you are there was no analog reception either, probably because of the severe multipath (reflected signals) with all the surrounding buildings. I was an early adopter of DTV in San Francisco and the surrounding Bay Area since 2000 (the local PBS even station gave me an antenna to test) and my findings about antennas and reception were published in Consumer Reports and eventually they wound up on the FCC website.

  4. Doc Searls’s avatar

    Bruce, it isn’t just the cliff effect.

    First, all low-band (channel 2 to 6) VHF stations moved to UHF channels, even if their “virtual” channels (how they identify on the air) didn’t change. UHF range is far more limited (and requires far more power) on UHF than with VHF — especially low-band VHF. Many stations with transmitters far out of town had to move closer in, because their post-DTV transition range was so reduced. This was the case with WECT/6 in Wilmington, NC, which moved to Channel 44, and had to abandoning its 2000-foot tower halfway between Wilmington and Fayetteville. Besides that, many UHF DTV transmitting patterns are directional. Here’s WECT’s. Note that its full 575kw power is achieved only in one direction (64°, roughly northeast), while in all other directions it’s less than that full power. On Channel 6 it was only 100kw and had far more coverage. (Of course it’s still a must-carry in Fayetteville, even though the signal is gone from there. Must-carry applies to the ghosts of the old pre-DTV transition, in many cases.)

    Second, the FCC’s instructions — put a directional antenna 30 feet above the ground — was also useless in many cases. Take our home in Santa Barbara, for example. In the Analog Age, our directional rotating rooftop antenna picked up good signals from every VHF, and most UHF, stations from Ventura to Tijuana, including everything from Los Angeles, Orange County and San Diego. After the DTV transition, all of them were gone, except for the San Diego/Tijuana stations, which come in about 10% of the time. For examples of those, and the “cliff effect” at work, look at this photo set or this one. This was in 2007, after the transition started, and all the San Diego stations had made the switch. The best signal of those was KGTV, which goes by Channel 10 but was then actually on Channel 28, as I recall. Since then they’ve moved to the real Channel 10 on VHF, and we can’t get them any more. We also can’t get KEYT, our local Channel 3 in Santa Barbara. Back when it actually radiated on Channel 3, we could get it clearly on rabbit ears, and didn’t even need the rooftop antenna. Now it’s on UHF channel 27. A slight bit of terrain shadowing keeps us from getting it, despite its power of 699kw. The old signal came from the same location, atop 4000-foot Broadcast Peak, with just 100kw.

    While we got the New York apartment after the DTV transition, I’ve tried receiving DTV signals in many locations, using an EyeTV Hybrid, with a directional antenna, on my laptop. It’s a good receiving system. When the site can see the Empire State Building, reception is fine. When there’s no clear sight, forget it. The receiver says the signal strength is strong, but the signal quality is low. That’s because digital signals degrade much more poorly. Cliff effect again.

    Another case in point: Atlanta. Check out this photo set, taken from the Westin Peachtree, where I had a room on the west side of the 59th floor. Within several miles on the east side of the hotel were the transmitters of all Atlanta’s TV stations. With my laptop’s receiver I could get signals from all of them, but pictures from none, because shadowing by the hotel destroyed the signal quality. To the west, however, I got lots of stations, though most of those were still analog. One was a Georgia Public TV station about 80 miles away that happened to be shutting down its analog transmission that very night. You can see the recording here (with the sound killed by Google because it featured copyrighted music: Ray Charles’ “Georgia on my Mind”). I couldn’t get the new DTV signal. Both were on UHF.

    I could go on. The simple fact is that the promise of DTV was met in only one way: Digital looked and sounded better than analog. For coverage and tolerance of less-than-ideal signals by receivers, analog won, big time.

  5. Bruce John Shourt’s avatar

    Mr. Searls, maybe some of the following might help you.

    Thanks for your thoughtful reply. However, I suspect you still don’t quite grasp how critical antenna placement is for your Santa Barbara site and that is in the FCC instructions for indoor antennas which in the early years were borrowed from my writing. If they have not used the same method for outdoor antennas then they are irresponsible. In fact, prior to the analog turn-off the FCC was negligent in informing the public (and the antenna manufacturers) that about 10% of the stations in all the major markets would eventually still be on VHF high band after the analog turnoff. I became aware of that only after an antenna dealer in Illinois blew the whistle on it on his website and prior to that all of the antennas that were sold and advertised as being specifically for DTV were UHF-only.

    (I heard Leo Laporte one day tell a radio listener, “Be sure to get a digital antenna!” Poor Leo.)

    I learned early on about the difference between virtual and actual RF channels and the temporary assignment that many stations got when they were simultaneously transmitting digital and analog before the analog turnoff. In the San Francisco Bay area it took many months, (maybe a year?) for the TV stations on Sutro Tower to get their permanent DTV transmission antennas and it changed the propagation patterns again compared to when they were simulcasting.

    Your anecdote about your experience in Santa Barbara is typical. People who had both indoor and outdoor antennas for analog TV assumed that they should also be able to receive the digital signals and that is where things went wrong. The propagation, especially over long distances and over various terrain and vegetation, makes for very quirky reception. It is literally about precise location and orientation of the antenna. Moving an indoor antenna just a few inches or outdoor antenna just a few feet can be all-or-nothing.

    From what you wrote I assume you did not try moving your roof antenna in Santa Barbara.

    I will bet with a very good probability of winning that I can find usable DTV signals from most of your old stations. The key to success is trial and error and lengthy experimentation. When I had my antennas on my single-story home on the roof pointing west to receive San Francisco, I could only receive the RF UHF signals on one end of the house and the RF VHF on the other end. And the rule that higher is better is not always true, either. In some cases a high antenna will not receive a signal but if you lower it 2 or 3 feet you do.

    In my experience on the border of Pleasant Hill and Concord (at an elevation of 58 feet about 28 miles from San Francisco’s Sutro Tower) I find it is easier to receive UHF over long distances than VHF from Sacramento, San Jose, Rohnert Park (north of the Golden Gate) and San Francisco. And indoors I can get a few UHF stations but none of the VHF ones.

    My ABC is on RF Channel 7 in San Francisco and RF Channel 10 in Sacramento, NBC is on RF Channel 12 from San Bruno Mountain (south of San Francisco), and PBS is on RF Channel 9 in Sacramento. (The Sacramento TV station transmitter antennas are actually in the city of Walnut Grove which is near Sacramento.)

    At one time I had five antennas on my gently peaked single-story roof in different spots for San Francisco and Sacramento and one UHF-only on my patio pointing south for San Jose. All of the roof antennas were on temporary moveable mounts but my house was accidentally inspected by a state inspector (my address is number 3 and she was supposed to inspect number 33) and I had to move them all onto my patio where they remain today because of the cost to have them permanently mounted and also the fact that I am now nearly 70 and not as nimble. My reception is good about 95% of the time because it varies with weather conditions and the time of day when I will have some some very brief intermittent episodes, about two seconds or so. It was close to 100% when the antennas were on the roof.

    I have tested the biggest combined UHF and VHF antennas and for long distance DTV reception none can perform as well as separate units, and not just because sometimes separate locations are necessary because of the nature of the wave propagation of UHF and VHF. Later I learned from “DXer” websites that this has been true since the beginning of UHF TV transmission.

    I use two models of the highest gain yagi-type (long, highly directional) antennas with mast-mounted preamps. The low-cost Winegard YA 1713 for high band VHF is now discontinued. I just checked and there is a new-in-box one on eBay for $80 shipped, over twice the price when they were in stock. There are only a few VHF-only ones now on the US market but they are not nearly as long and high gain as the Winegard YA 1713. Some DXer websites talk of big models available in Canada and Europe and photos of their monsters may even be ones that are homemade.

    I was able to successfully combine the UHF and VHF antenna signals from the same direction inside the house with the proper UHF/VHF combiner. But combining the antennas from different directions caused interference and did not work.

    For UHF I use the Terrestrial “Digital” 91xG which has been copied by a few other brand manufacturers (importers, really) and I think even high-volume antenna dealer Solid Signal has one under their name and they also sell the one that RadioShack has.

    Another factor in the digital transition was that the first generations of ATSC tuners were terrible, especially with multipath problems. The last I heard we are on about the fourth-generation and the fifth one was perfected by Samsung but I read that they refused to license their circuitry to other manufacturers. My worst tuner is in my 2005 model 42-inch Panasonic plasma TV.

    My first receiver was the RCA (Thompson) DTC–100. In 2002 my San Francisco neighbor hired old-school analog TV antenna professional installers to put up a UHF antenna to receive Sacramento HD because NBC had departed from KRON in San Francisco. They went up on the roof with their antenna and a spectrum analyzer and announced that there was no usable reception from Sacramento, even though the analog channels were still on the air. My friend and I went up and spent about an hour and a half with my DTC 100 and we found the sweet spot which we marked and called the installers back and he got all of the digital channels from Sacramento.

    That year the chief engineer of our PBS station (KQED) gave me the Silver Sensor, the so-called “HDTV” indoor UHF “arrow” type antenna from England to do tests and I wound up receiving NBC HDTV about 100 miles from Sacramento with the little antenna under my bed!

    My preferred ATSC tuner for testing is in a digital-to-analog converter, the Zinwell ZAT-970A. It has an excellent dual signal meter, the usual one for strength and, more importantly, one for signal quality. For years I was baffled by situations where I would have a full-strength indication on single meters and yet get intermittent reception. After I got the Zinwell and started adjusting also for quality then I really was able to get good results. In the Installation function it also has Manual Scan for a selected single channel but you must know the RF channel (or frequency, it has that mode, too) not the virtual channel number to use it. The signal meters stay on until cleared, which is ideal for antenna orientation.

    Here is my method for fringe or problematic reception copied from a previous consultation. Before I got the Zinwell, the best converter was the Channel Master CM–7000. I have gone through 13 of them because of the cheap capacitors that fail after several years. But now I’ve found a single-meter model that is the absolute best for difficult reception with weak or multipath reception, the Digital Stream models from RadioShack. It’s better than both the Channel Master and Zinwell and even the new Channel Master CM–7001 which also has HD output and is no better than the SD model;

    “Unlike analog antenna installation where you mount the antenna in the most convenient place, DTV reception to receive all available channels at maximum strength (and quality) is critical and entails trial-and-error. Moving the antenna as little as one foot horizontally, up or down, and 20 or 30 degrees direction can make a huge difference. I’ve experienced analog pro installers that declared there was no DTV reception after scanning with a spectrum analyzer.”

    “My method is I take an old, battery powered home video camera that has a VTR mode with analog RCA composite VIDEO IN with the required adapter cable (some cameras have S-VIDEO IN that also accommodates the Channel Master CM-7000) and the camera has an electronic eyepiece viewfinder to easily see in daylight (a portable DVD player with VIDEO IN could work but you’d have to shade the screen), a small, lightweight still camera tripod that easily adjusts for height, a fast scanning converter box (my favorite DTV receiver is the Channel Master (D2A) CM-7000 that scans the fastest of five models I’ve tried and it builds a visible list of the detected stations), an AC extension cord, and a temporary movable antenna. I use a photographer’s light stand as a temporary antenna mount because it allows easy height changes and is relatively easily picked up and moved.”

    “You watch the signal strength (and quality) display for each channel while slowly aiming and raising and lowering the antenna. Then you move and repeat. (It’s actually slower to have a second person watching and reporting while you’re adjusting.) You may have to try re-scanning after each move to find the optimum location to receive all the available channels at the maximum strength (and quality).”

    “You may also have to replace existing wiring, either antenna or even cable TV wiring, with new RG-6 cable (all cable works the same for analog or digital). I’ve tried using the thinner RG-59 cable as well as older cable TV company-supplied thick cable that looked like RG-6 but the center conductor was not as thick. Then I replaced it with newer RG-6 (along with the current technology of compression connectors). I got more stations and stronger signals then on the previous cable. If you’re going to split the feed to several TVs a $50 (internet price) mast-mount preamplifier may be necessary to maintain signal strength for distant stations even for short cable runs. Re-scan again with the receiver downstream of the amplifier and you may be able to finally get channels that may have been detected and showed up on the Channel Master list but were too weak to get picture and sound.”

    The older channel master and Winegard preamplifiers had separate VHF and UHF modes or some models were UHF only or VHF only. An English company makes super low noise preamps that cost several hundred dollars imported and they claim they are good for week reception and they are used by DXers.

    Here’s advice for indoor reception for people with a converter box:

    “Get an extension cable for your indoor antenna (you must have a combination UHF and VHF antenna if you know that some channels are on RF VHF), keep the “rabbit ears” rods short, about 18 inches and horizontal and test locations away from your TV, even other rooms with windows or walls facing the direction of the TV transmitters or a hill or building for bounced signals. A “sweet spot” for a continuous picture on all channels might be only within a few inches vertically or horizontally. Also, within 10 – 20 degrees direction. Each time you make a radical move of the antenna you may have to do a re-scan on the converter. Are you watching the converter signal meter mode on the TV screen as you adjust for each channel?”

    In San Francisco I successfully placed an antenna inside a house that was surrounded by hills but we were still able to receive all the stations including NBC on RF VHF 12 which was in the opposite direction but it bounced off the hill. We were using an ancient UHF loop with rabbit ears and they had separate 300 ohm wires. (I always advise people to start with the lowest-cost, simplest unamplified old-fashioned antenna.)

    You may have something creating interference in the room. See:

    The above link is pretty old and I kept getting errors in Safari but I was finally able to get it after several tries in the Chrome browser.

    This is also why it is not a good idea to have amplified antennas indoors because in some cases they amplify the interfering noise.

    My preferred small antenna for initial testing is the unamplified Terk model based on the Silver Sensor UHF design but it also has fold-down rods for VHF.

    Here is the link to the Zinwell converter on Amazon but I notice that some sellers have a completely redesigned unit but with the 970A model number instead of 950A and a new higher price.

    The new version has a metal case and internal power supply and AC cord whereas the old one is all plastic and has a 5 V DC wall wart.

    If you want, I will send you one of my used ones for $40.

  6. Doc Searls’s avatar

    Bruce, thanks for your long replies.

    In Santa Barbara I’m using the Winegard HD9032 antenna for UHF and a Jerrold (can’t find the model number) for high-band VHF. Simply put, the signals aren’t there, except for the San Diego/Tijuana ones, when the weather is right. (Technically speaking, when the capacitive properties of the air between the transmitting and receiving antennas to provide some tropospheric ducting as the DXers put it.) The antennas are on a rotator and I’ve moved them around quite a bit to seek out signals. The roof below them is copper, and the site is well away from sources of electrical interference. A satellite TV antenna (Dish) is also on the roof nearby and has no trouble.

    Also, for what it’s worth, I’m a DXer from way back. I got my first (and only) ham license when I was twelve, and got involved with TV and FM DXing as an adult in New Jersey and North Carolina, after logging more than a thousand AM stations as a teenager — within sight of nearly all of New York’s powerhouse stations radiating from the Meadowlands, using my Hammarlund HQ-129x ham receiver. (Which I still have, somewhere.)

    In North Carolina I logged more than 800 FM stations, mostly via “Sporadic E” skip, which brings in stations from 800-1200 miles away. I also logged every Channel 3 and 6 within an arc that ran clockwise from Cuba to Texas, across the prairies and several Canadian provinces. (There were local signals on channels 2, 4 and 5.)

    So I know a lot about this stuff.

    Oh, and I also have the same Terk antenna you recommend, and use it to detect the presence of signals. It worked great where we lived near Boston, and could “see” the Needham TV antenna farm through the trees. It detects exactly nothing at the Manhattan apartment, indoors or on the roof, because our apartment is just 3 floors high, and our “view” toward the Empire State Building is through a wall of brick many floors high, plus many other buildings on the other side of that one.

    Anyway, you make my point: DTV signals are relatively hard to get for most people (the ones unlike you and me, who go to the trouble), and that was the market Aereo operated in.

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