Dear Linux Pro Reader,

One news item that crossed the wires this month was the company known as Aereo closing its Boston office and laying off more staff. The move follows a supreme court ruling in June that left them without a viable means for gaining revenue. Although Aereo still seems to be afloat in some capacity, its prospects are few, and the new investment money necessary for a restart doesn't seem to be on the horizon.

If you just joined the conversation, Aereo was founded in 2012 on the concept of taking local broadcast television and putting it up on the Internet, so listeners around the world could stream it. Of course, many broadcasters already stream their own content, and it is illegal to just intercept somebody else's broadcast, stream it out to the world, and charge money to people who receive it. But Aereo had an interesting solution: they would not stream the signal to the world themselves but would, instead, assign exactly one antenna to exactly one listener. Their service would thus be a form of equipment rental – no different, their supporters said, from a pair of old fashioned rabbit ear antennas that used to go on top of a 1950s-era TV set, only the rabbit ears are in a different city. You could sit anywhere in the world and watch local broadcast TV from New York City. They designed a dime-sized TV antenna and built rack-mounted banks of thousands of these antennas, which they placed somewhere in Brooklyn.

This concept scored Aereo an investment of $20.5 million from venture capitalists and some time in the limelight as the latest new thing. They competed boldly with the networks and celebrated their right to re-use network content in nearly real time. In a 2012 blog post, they gushed, "2.1 million people enjoyed the Super Bowl online via NBC this year. What wasn't included in the stat line were the football fans who also watched the Super Bowl live online, via Aereo."

The Aereo phenomenon fell easily into the continuing proxy war between Internet companies and conventional broadcast and cable companies, where every skirmish is fought under the spotlight of overarching terms like "freedom," "property rights," "socialism," and "the right to innovate." Regardless of where you sit with these spotlight issues, it is fair to ask whether what Aereo did truly falls under the definition of "innovation." Their whole reason for existence seems to depend on an arcane legal definition of whether their service is equipment rental, or whether they are, in fact, a company that streams copyrighted material without permission.

You can ponder that question all you want, and many in the FOSS community – including the Electronic Freedom Foundation (EFF) – side firmly with Aereo, but it still seems like there is a lesson here. Before you drop your money on a startup, it is fair to ask, "Are we doing law, or are we doing engineering?"

Innovation is supposed to be about efficiency – adding value by doing something in a smarter, easier way. When you view the process as a whole, Aereo's technology was actually quite inefficient. It is not especially sensible to throw a video broadcast up on the airwaves, only to suck it down again and put it on the Internet later. The innovation in Aereo's business plan was strictly legal, and they were willing to build an entire company around the promise that their thousands of tiny antennas made them immune from accusations of copyright infringement. Ultimately, the courts didn't agree; but even if they had won in court, regulators, a subtle change in the law, or even future moves from the broadcasters could easily have put their business at risk, because, in the end, their technology didn't make any engineering sense: It was a kluge thrown together to fulfill a legal recipe.

Perhaps the deeper issue here, and the point that the EFF and Internet companies are concerned about, is: What is the cloud? What is the responsibility of a service provider to police the content accessed through the service? These questions are actually quite important for the development of our culture, but I still think Aereo was not an especially good test case for this deep and profound topic.

Regardless of where you fall on the questions of copyright and intellectual property, it seems entirely appropriate to express some misgivings about the fragility of Aereo's business model and the efficacy of erecting a whole company around the vision of circumventing a quirky legal loophole. So cry for Aereo if you want to, and go ahead with your amicus briefs on the need to reform outdated legislation, but the next time you encounter a startup whose "innovation" is a novel new way of swimming in the intellectual property soup, keep hold of your wallet. You can probably find a safer place for your $20.5 million.