Court To Rule on Television Over Internet Service

The Supreme Court will decide whether a startup company can offer live television broadcasts over the Internet without paying fees to broadcasters.

The high court agreed on Friday to hear an appeal from television broadcast networks in their attempt to shut down Aereo Inc., which takes free signals from the airwaves and sends them over the Internet to paying subscribers.

Broadcasters have sued Aereo for copyright infringement. The big networks have supplemented their advertising revenue with fees from cable and satellite TV companies for redistributing their stations to subscribers. If customers drop their pay-TV service and use Aereo, broadcasters would lose some of that revenue.

The 2nd U.S. Circuit Court of Appeals ruled last year Aereo did not violate the copyrights of broadcasters with its service but a similar service has been blocked by other judges.

Aereo claims what it is doing is legal because it has thousands of tiny antennas at its data centers and assigns individual subscribers their own antenna. According to Aereo, that makes it akin to customers picking up free broadcast signals with a regular antenna at home.

Aereo's service starts at $8 a month and currently covers New York, Boston, Houston and Atlanta, among others. Subscribers get about two dozen local over-the-air stations, plus the Bloomberg TV financial channel.

"We believe that consumers have a right to use an antenna to access over-the-air television and to make personal recordings of those broadcasts," said Aereo CEO and founder Chet Kanojia. "The broadcasters are asking the Court to deny consumers the ability to use the cloud to access a more modern-day television antenna and DVR. If the broadcasters succeed, the consequences to consumers and the cloud industry are chilling."

Broadcasters have argued that the use of individual antennas is a mere technicality meant to circumvent copyright law and threatens their ability to produce marquee...

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