Aereo Case Hearing At Supreme Court

Chet Kanojia, second-from-left, founder and chief of Aereo, leaving the Supreme Court on Tuesday.

WASHINGTON — The Supreme Court seemed to have conflicting impulses on Tuesday in considering a request from television broadcasters to shut down Aereo, an Internet start-up that the broadcasters say threatens the economic viability of their businesses.

On the one hand, most of the justices seemed to think that the service was too clever by half.

“Your technological model,” Chief Justice John G. Roberts Jr. told Aereo’s lawyer, “is based solely on circumventing legal prohibitions that you don’t want to comply with.”

But Justice Stephen G. Breyer, echoing sentiments of other members of the court, said “what disturbs me on the other side is, I don’t understand what a decision” against Aereo “should mean for other technologies,” notably cloud computing.

The justices seemed keenly aware that their ruling would have vast implications for the broadcast industry and for technical innovations involving cloud computing.

Aereo uses arrays of small antennas to stream over-the-air television signals to subscribers, allowing them to record and watch programs on their smartphones, tablets and computers. The broadcasters say this amounts to theft of their content and violates copyright laws.

Aereo uses arrays of small antennas to stream over-the-air television signals to subscribers, allowing them to record and watch programs on their smartphones, tablets and computers.CreditJames Estrin/The New York Times

The broadcasters say a ruling in favor of Aereo would jeopardize the billions of dollars in retransmission fees that cable and satellite systems pay to networks and local stations for the right to distribute their programming. Television executives have said that would undermine their business model and force them to consider abandoning the airwaves.

Aereo responds that it is merely helping its subscribers do what they could lawfully do since the era of rabbit-ear antennas: watch free broadcast television delivered over public airwaves.

Aereo’s service costs $8 to $12 a month and is available in about a dozen cities. In combination with other Internet services like Netflix and Hulu, it can help viewers replace much of their television diet at a fraction of the cost of a cable bill.

The case, ABC Inc. v. Aereo, No. 13-461, turns on a part of the copyright law that requires copyright owners’ permission for “public performances” of their work. The law defines such performances to include retransmission to the public.

Paul D. Clement, a lawyer for the broadcasters, said Aereo’s service violates that provision. He said a decision against the service would probably doom Aereo as a business.

“If all they have here is a gimmick,” he said, “they will probably go out of business, and no one should shed a tear.”

David C. Frederick, a lawyer for Aereo, said the service was not covered by the provision involving public performance. Because it assigns individual antennas to every viewer, he said, Aereo’s Internet streams are not public performances under the copyright law. That means, he added, that it has no obligation to pay so-called retransmission consent fees to local stations.

A ruling against his client, Mr. Frederick said, would stifle innovation. “The cloud computing industry is freaked out about this case,” he said.

A divided three-judge panel of the federal appeals court in New Yorkruled for Aereo last year. In dissent, Judge Denny Chin wrote that the service was “a Rube Goldberg-like contrivance, overengineered in an effort to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law.”