Tag Archives: Aereo

Supreme Court makes some rulings that will have far reaching effects

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This week is the end of the Supreme Court session. Three big rulings have happened in relationship to technology that are vitally important. The first ruling known as Alice which is a key decision in changing how people look at software patents. Second, was a ruling on Aereo, a company that provided a streaming service for over the air way signals. Third, a case about if cops do not need a warrant to search your cell phone.

Alice, has really reinforced the non-obvious clause for patent cases. In fact, it was reinforced in a way that will likely make it difficult for determining non-obviousness. Especially because it strengths the argument that an algorithm is a natural extension of a mathematical truth. Secondly, it requires something novel to be done with a piece of hardware. This means that you can’t simply just take “on a computer” into the patent and have it be valid. I think this will have some really positive implications on the patent trolls out there. Since, it’s required to do something novel, such as using RFID to do the work, you can’t simply say automation through a computer any more. I think this is a great step forward. I’m sure it will cause a lot of heartburn and many more extremely prominent cases to gain some greater level of clarity.

Aereo is officially dead. It’s been decided that Aereo was infringing on copyright in a massive way. They were found to have been completely violating copyright in every sense of the word. This is pretty scary in my opinion. It means that a company that wants to provide an otherwise free service through streaming is violating a copyright holder. This means anyone that acts as a sort of repeater is violating copyright. It certainly means anyone that is transmitting copyrighted material in any medium is violating copyright. This I think is devastating. Furthermore, I don’t believe that this ruling even required specific instances of copyright violation. This puts both Google and Twitch in a precarious position, because they are streaming potentially copyrighted material all the time. It also means that any company that streams other free content is violating copyright. I’m afraid that this is going to scare a lot of other companies out of these spaces. There’s a clear need for this service and the Supreme Court killed that innovation.

Cops need warrants to search your cell phone. This is a huge ruling. This means that if you have a lock on your cell phone that they cannot access the contents without getting a court order. This is pretty big. So I suggest making sure that you lock your phone and think about encrypting it. It truly provides a great deal more protection than in the past. Furthermore, if they violate this and do not get a court order, then the evidence is inadmissible. I am hoping that this lays the legal framework for an overturn of the collection of NSA Metadata. Based on the wording in the ruling, it seems that it would lend a great deal of weight to an argument claiming that the Metadata is part of the phone. If the police cannot access your call history through your phone without a warrant, then logically you’d need a warrant to get the information from a third party – that you HAVE to rely on.

I think that these cases will have a great deal of long term impact on the direction of technology and law in the next few years. I would not be surprised if there were more legal challenges based upon these rulings within the next few months. Expect the EFF to look to expand the logic of the cell phone warrant requirement. Look for companies that are getting hit by patent trolls to push back harder like New Egg has and really beat them down. I’m really concerned about the long term impact of Aereo though. Who knows the implications of that.

Data, Monopolies, and the Comcast/Netflix Deal

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So, apparently, there are these groups that sell bandwidth for data transit to companies like Netflix. These companies interface with the major ISPs like Verizon and Comcast and connect the broader backbone of the internet to specific ISPs. These interfaces, like any interface can become over burdened – similarly to a congested intersection on the road. The problem is that with data information can be lost or transmitted extremely late, the lost data is called a “dropped packet.” These packets are like little packages of data that will likely provide some desired bit of image, article, or video.

These companies have typically provided “peer connections” that are free to transmit data because, well you’re paying to access the data and Netflix is paying to allow you to send the data. Win-win for both user, ISP, transit company (Cogent), and Netflix. Pretty good system right? Well it was until Verizon and other ISPs went and decided that they wanted to charge Cogent to for access to their networks so their users can access the data that Cogent is transmitting for Netflix.

Why can the ISPs do this? They are acting like monopolies in many ways. These companies are essentially islands of monopolies that do not compete with each other. With little incentive from the market to change behavior they are able to seek additional monies from their customers and providers without much risk of member defection. Furthermore, as Verizon is continually posting higher and higher Average Revenue Per User (ARPU), they are making more from the same number of people. When you have no where to go, that means raters are going up, and if they aren’t investing that additional money, that means profits are going up.

What does this all mean? It means that Netflix is getting the squeeze in a way that they weren’t expecting and with the proposed merger between Time Warner and Comcast things are only getting worse. The ISPs are able to say that they aren’t negatively hurting Netflix alone, because everyone that uses Cogent is getting hit the same way. It’s intentional according to the Cogent CEO. To get around the Cogent bottleneck, Netflix has decided to have a direct connection between Comcast and Netflix. This means that Netflix services will have less of a bottleneck to compete with other bits of data. This is a big deal for Netflix as lost data packets likely mean blocky video or video that is unwatchable.

Netflix decided to push for their members by paying for higher speed access directly to Comcast. This is great, but on the other hand terrible. It’s terrible because one of the greatest champions of Net Neutrality has bowed out of the fight giving in and paying to provide higher speed video quality to their members. It’s good because they are doing what’s right for their members, even though Comcast is at fault here by making cynical business choices to negatively impact the quality of the services provided over their pipes.

This could have interesting implications if a company decides to use this clear agreement as an obvious breach in the NBC/Comcast Net Neutral agreement. This could, if pushed correctly, have serious far reach implications for the company. However, I’m not sure who would push for this law suit. Hulu won’t, as it’s partially owned by Comcast, maybe Google will as they are looking to compete head on with Comcast as an ISP, video content provider, and in other realms. Another potential is Aereo that has already won a few major victories over NBC/CBS in copyright (The company streams over the air HDTV as a DVR service). So if they don’t have equal access as Comcast or Netflix, they could certainly sue over this – as it would hurt their business growth possibilities.

Update: Apparently Netflix is in negotiations with both AT&T and Verizon as well. Furthermore, Verizon believes that these agreements are clear that we don’t need more “regulation”in the form of net neutrality. Clearly, if a monopoly can extract as much money from both their members and the content that brings value to their networks, there’s no need for regulation!

I think that these practices are going to seriously impact the ability of smaller firms to compete. I also would fully expect a company like Twitch to start feeling the pressure next.