WASHINGTON — The Supreme Court signaled on Tuesday that it was struggling with two conflicting impulses in considering a request from television broadcasters to shut down Aereo, an Internet start-up they say threatens the economic viability of their businesses.
On the one hand, most of the justices suggested that the service was too clever by half, with a business that relies on capturing broadcast signals and streaming them to subscribers for a fee.
“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 the justices were also clearly concerned with the impact that a ruling against Aereo could have on future technological innovation.
“What disturbs me on the other side,” Justice Stephen G. Breyer said, “is I don’t understand what the decision for you or against you when I write it is going to do to all kinds of other technologies.”
It was not clear whether Chief Justice Roberts’s tone was chiding or admiring as he directed pointed questions at David C. Frederick, Aereo’s lawyer. But it seemed clear that the court was prepared to rule against the service — if it could fashion a legal principle that would leave other technical advances like cloud computing unscathed.
The arguments Tuesday were the culmination of two years of legal sparring between the networks and Aereo, over an issue television executives and analysts say will have far-reaching implications for the industry.
At risk are the billions of dollars broadcasters receive from cable and satellite companies in the form of retransmission fees, the money paid to networks and local stations for the right to retransmit their programming. The networks have said this revenue is so vital that they would consider removing their signals from the airwaves if the court ruled for Aereo.
Aereo uses arrays of small antennas — one for every subscriber — to stream over-the-air television signals to its customers, 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 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.
“There’s no content being provided,” Mr. Frederick told the court Tuesday. “There’s equipment that’s being provided.”
Justice Sonia Sotomayor did not seem persuaded. “It’s not logical to me,” she said, “that you can make these millions of copies and essentially sell them to the public.”
Justice Ruth Bader Ginsburg said Aereo’s business was built on taking content without paying for it. “You are the only player so far that doesn’t pay any royalties at any stage,” she told Mr. Frederick.
Mr. Frederick said the service merely allowed subscribers to rent equipment to make their own individual copies of over-the-air television programs. That did not impress Chief Justice Roberts.
“That’s just saying your copy is different from my copy,” he said. “But that’s the reason we call them copies, because they’re the same.”
The case, ABC Inc. v. Aereo, No. 13-461, will turn on a part of the copyright law that requires the permission of copyright owners 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 violated that provision. “If all they have here is a gimmick,” he said of Aereo, “then they will probably go out of business, and no one should cry a tear over that.”
Mr. Frederick said Aereo 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 retransmission fees.
Mr. Clement said Aereo’s arguments were a legal sleight of hand.
“They provide thousands of paying strangers with public performances over the TV, but they don’t publicly perform at all,” he said. “It’s like magic.”
Malcolm L. Stewart, a deputy solicitor general, argued in support of the broadcasters on behalf of the federal government. He acknowledged that cloud services that store and perhaps aggregate content were in some ways similar and posed difficult questions under the copyright laws.
“I don’t pretend that there is a bright line between providing a service and providing access to equipment,” he said. “It’s an authentically hard call as to where to draw the line. So I don’t have a good answer for you.”
The justices seemed keenly aware that their ruling will have vast implications for the broadcast industry and for technical innovations. Mr. Frederick tried to reinforce the second concern.
“The cloud computing industry is freaked out about this case,” he said. A ruling against his client, he added, would expose “the cloud industry” to “potentially ruinous liability.”
One example of cloud computing services mentioned in the court briefs are the music-storage lockers offered by companies like Google and Apple.
Aereo’s service costs from $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 replace much of their average viewer’s television diet at a fraction of the cost of a cable television bill.
Some justices said they found the service suspiciously complicated. “Is there any reason you did it other than not to violate the copyright laws?” Justice Antonin Scalia asked Mr. Frederick.
A divided three-judge panel of the United States Court of Appeals for the Second Circuit in New York last year ruled for Aereo. In dissent, Judge Denny Chin wrote that the service was “a Rube Goldberg-like contrivance, over-engineered in an effort to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law.”
At Tuesday’s argument, Justice Breyer kept returning to the unknown consequences of a ruling against Aereo.
“I’m hearing everybody having the same problem,” he said of his fellow justices. “I will be absolutely prepared, at least for argument’s sake, to assume” that Aereo’s service is unlawful.
“But then the problem is in the words that do that,” he said, referring to the decision the court will issue, probably in June. Justice Breyer went on to express concern that a ruling against Aereo might limit other innovations “that will really change life,” such as the cloud.
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