Pro-Cable Oligopoly

It's Official: The Supreme Court Is Pro-Cable Oligopoly

The Supreme Court ignored two telecommunications laws in its ruling to kill Aereo today. It came down firmly on the side of corporations--and against innovation--in the process.

By Ben Collins

The United States Supreme Court banned the rebroadcast of previously free, over-the-air television today in a 6-3 ruling. This ruling will basically kill Aereo—a company that sends those broadcasts from a remote antenna to computers and set top boxes—and make it almost impossible for a startup to compete with telecommunications giants like Comcast.

In American Broadcasting Companies Vs. Aereo Inc., the startup argued it was merely selling a different, better antenna. Traditional TV antennas no longer receive TV broadcasts from stations like Fox and ABC, since the government reassigned and resold over-the-air TV spectrum for other means over the last decade. The court disagreed, calling it a performance, and saying the public doesn’t have a right to it.

Here’s the problem: Under law, the public is legally required to receive free, over-the-air TV by "any means necessary."

The 1934 Communications Act, signed by Franklin Roosevelt, calls for an FCC that is “regulating interstate and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States a rapid, efficient, nationwide, and worldwide wire and radio communication service with adequate facilities at reasonable charges.”

The act was amended in 1984 to exclude cable TV, but the amendment notes the act still applies to over-the-air television stations—the stations that Aereo carries.

The Telecommunications Act of 1996 leaves that language untouched and reaffirms the idea of competition. “The goal of this new law is to let anyone enter any communications business -- to let any communications business compete in any market against any other,” according to an FCC statement.

The court, however, never once mentions the Communications Act or the Telecommunications Act in its decision.

Instead, the telecom oligopoly—a $5 trillion industry in 2013—was able to join together in the courtroom to swiftly kill any competition.

American cable companies and TV networks—a banded-together Comcast, Fox, ABC and others—have won again, and they’ve swallowed innovation in the process. Comcast will further shield its cable business, which made $17 billion in revenues last quarter and will gain 11 million subscribers if it is allowed to merge with its largest competition, Time Warner Cable, by the end of the year.

“Today’s decision by the United States Supreme Court is a massive setback for the American consumer," said a spokesperson for Aereo.

Alki David, who runs a business similar to Aereo called FilmOn, said the ruling made for an anti-competitive media landscape in America, when reached in a statement.

“This huge blow to net neutrality and consumer rights proves my mistrust of the courts is well founded and that the policies and agencies that are supposed to protect the public interest have failed,” said David. “They are indeed mere tools of a handful of corporations intent on keeping the people in a stranglehold of bad cable service at extortionist fees. The effects on values the U.S. supposedly takes pride in—from innovation to free markets to freedom of speech itself—are truly scary."

Supreme Court justices also didn’t seem to understand the basic points of the case. Justice Antonin Scalia “did not know that users couldn’t receive HBO using an over-the-air antenna.” But when in doubt, Alki says, the win goes to the status quo, the established entity or the deeper pockets—and that's when it becomes a speech, according to David.

“If Aereo doesn’t win this, it eats away at the rights of the innovator. It eats away at the rights of speech,” FilmOn's David told Esquire last month. “It eats away at the First Amendment.”

The Supreme Court acknowledged that the ruling is a narrow one, and that any precedent that this sets might stunt innovation.

“We cannot now answer more precisely how the Transmit Clause or other provisions of the Copyright Act will apply to technologies not before us. We agree with the Solicitor General that ‘[q]uestions involving cloud computing, [remote storage] DVRs, and other novel issues not before the Court, as to which ‘Congress has not plainly marked [the] course,’ should await a case in which they are squarely presented,’” the ruling states.

The court opted to rule that Aereo’s service illegal anyway. The court is for innovation—unless it gets in the way of the profits of a megacorporation.