When copyright rules lead to wasted innovation

Aereo is undoubtedly innovative. But it's a waste of effort nonetheless.

An interesting court ruling came out of America yesterday, as the Second Circuit court of appeals ruled that Aereo, an internet TV company, does not violate copyright by streaming TV programmes to users without the networks' consent. PaidContent's Jeff John Roberts reports:

Aereo captures over-the-air TV signals by means of tiny antennas and streams them to subscribers who watch and record shows on their mobile devices or computer browsers. Aereo’s antennas are not just a marvel of technology (see photos here) — they’re also the key to a legal strategy that helps the company avoid copyright infringement.

The trick that Aereo is using relies on the fact that, under American copyright law, it is legal to "shift" copyrighted material in a number of ways. So you can "time shift" (record it to watch later), "format shift" (rip a CD onto your computer), and "location shift" (use a service like Slingbox to watch your cable TV on the move), and, provided you do it only for your own consumption, no copyright infringement has occurred. Aereo, which has great banks of 5p-coin-sized antennas in a building in Brooklyn, is legally just providing the third of those services; except instead of plugging something in to your cable box at home, it basically moves your entire TV into its building, and broadcasts the whole thing back to you.

There's certainly some impressive technology being used. Aereo gets the antennas so small by only listening in on a tiny section of the TV spectrum with each one, and changing which part that is depending on what the viewer wants to watch. And the company is also using "major advances in transcoding technology and cloud storage" to make it affordable to stream the live TV, and let people pause, rewind, and record what they're watching.

But while it's fun to cheer Aereo's technological advances – and certainly a good thing for the US media economy to actually experience some competition for the first time in a while – they aren't, in themselves, a good thing.

All of this innovation – the tiny antennas, better transcoding technology, and office placed with line-of-sight to the Empire State Building for perfect reception – isn't being focused towards making life better for customers, or even just making money for Aereo. Instead, it's just being used to get around the law.

The government could render all that effort useless overnight by just allowing Aereo to stream signal from one aerial to all its users at once. That would let Aereo offer lower prices, or enable competitors who don't have access to the technology or location to set up too.

It's as though we lived in a world where the Government required all bikes to only have one wheel, and were praising a company which had made the easiest-to-ride unicycle ever. It would be a mean feat of technological innovation; but it would also be a largely pointless one.

An Aereo antenna. Photograph: Aereo

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.