Seems like, because Aereo isn't just a hardware renter but also an integrated SaaS provider, they were treated as such.
The court opinion talks in terms of user interaction with menus on the site to select shows. We're kidding ourselves if this works anything like "hardware rental". If it were, it would feel more like AWS.
It's not so much as quality of the UI but rather what the service actually is. I can black-box Aereo and it looks pretty much like a rebroadcaster. Aereo isn't renting me an antennae, not in the way AWS rents me a server.
So if Aereo were just in the antenna rental business, and some other entity were in the cloud DVR business, and consumers paired them together it would be just fine?
Edit: having read the decision, it seems there were companies that provided antenna services back in the 60's, and congress amended the copyright act to forbid them. The ability for Aereo subscribers to choose which material is transmitted is key to Aereo's argument.
Well, if Aereo would provide antenna and SDR that end-user could control (and a third party decoding software would decode the video, huh) - would it be the same?
Maybe they should be in the hardware selling business instead.
Redesign their system to have discrete units. Aereo users would then buy the boxes (similar to that Hauppauge one linked elsewhere in this discussion) and pay a monthly service fee for power and bandwidth. If they are done with Aereo, they can have the box shipped to them for a small fee, or sell it back to Aereo.
The user will have complete and direct control of the TV box. Then there should be no problem.
Hardware costs will be higher though, and maybe the service ends up costing more overall. It would still be worth it for some people, like my friend who (while he likes sports in general) really just wants to see all of his favorite sports team's games from another city. I know of other people with similar use cases.
The court opinion talks in terms of user interaction with menus on the site to select shows. We're kidding ourselves if this works anything like "hardware rental". If it were, it would feel more like AWS.