The Supreme Court Aereo Ruling And Why New Technology Almost Always Loses To Big Media


A day after Congress tackled the controversial AT&T; and DirecTV merger, broadcast companies scored a big win Wednesday. The U.S. Supreme Court ruled Wednesday morning that Internet TV start-up Aereo violates broadcast companies’ copyright, effectively putting the company out of business.

The ruling, coupled with the impending merger, dredges up long held public fears that giant telecom and broadcast networks are bad for customers and could kill the Internet as we know it. A recent study found that a majority of consumers wanted the court to rule in favor of Aereo, while just 15 percent hoped for a ruling for broadcast companies. Yet despite their vast unpopularity, these conglomerates always seem to win out over new and emerging technologies.

As telecom and broadcast providers like AT&T; and DirecTV merge to consolidate Internet and TV services, their influence could extend into new territory. For the last 20 years, telecom companies have swelled into mega conglomerates that were deflated by Congress, and eventually rebuilt into today’s media giants.

Most of the major broadcast and telecom players have been around in some form for several decades, and, as a result, have deeply entrenched lobbying efforts. When it comes to net neutrality — the concept that all Internet traffic should be treated equally — companies including AT&T;, Comcast, Time Warner Cable and Verizon have spent over $2.1 million lobbying against more lenient rules. Meanwhile, tech giants like Google, Microsoft, Facebook and Netflix spent less than $700,000 in favor of the rules, despite their professed support. Telecom companies have also spent millions of dollars lobbying against requirements to provide equal Internet access across rural and often poor areas.

Aside from the industry’s strong lobbying ties, Congress and regulators have a history of rejecting new technologies that threaten established companies’ ability to control access to content. When cable TV first came along, for instance, major broadcast companies such as NBC and ABC took community cable company Cablevision to court, arguing that they infringed on broadcasters’ ability to make TV content publicly available, and should have to pay redistribution fees. Even though the Supreme Court ruled against the telecom companies, concluding that cable companies were within their legal rights to rebroadcast content like the Super Bowl without paying fees, Congress changed the rules in 1970. Now all cable companies have to pay a toll to show broadcast channels.  The Aereo ruling deals a blow to yet another emerging technology, but even if the court had ruled for the startup, Congress likely would have repeated history. “There’s a huge influence from the media industry in Congress,” Michael Carroll, a law professor at American University, told ThinkProgress in April. “I can see it going the way that the cable verdict went. Everyone who has come along with a new technology for broadcast has gotten the right to do that if they pay the fee.”

As the makers of new technologies, the tech industry is the biggest challenger to these companies’ grasp on media. Giants like Google, Facebook, and Netflix are becoming more involved in federal and local politics. They have repeatedly met with President Obama to discuss government surveillance, are driving forces behind California’s congressional race, and have increased their lobbying presence on Capitol Hill. For example, Google has opened offices in Washington, D.C., bolstering its lobbying clout in Congress and also in state legislatures throughout the country. But despite their recent entry into national politics, tech companies aren’t yet as successful as telecom companies at advancing tech business issues. To ensure future startups like Aereo and other Internet-based services such as Netflix flourish, tech companies will likely have to unite and match telecom and broadcast companies’ lobbying efforts dollar for dollar.