Supreme Court rules against Aereo

WASHINGTON (Reuters) - The U.S. Supreme Court on Wednesday ruled that online TV service Aereo Inc, backed by media mogul Barry Diller, violates copyright law by using tiny antennas to provide subscribers with broadcast network content via the Internet.

In a 6-3 ruling seen as important to the future of television for media companies and consumers alike, the court handed a victory to the four major TV broadcasters and cast Aereo’s immediate future into doubt.

The court said the service constitutes a public performance of copyrighted content. For the networks, the victory protects the estimated $3 billion in so-called retransmission fees that broadcasters get from cable and satellite TV systems.

Justice Stephen Breyer said in the majority opinion that the ruling should not spell trouble for cloud-based content services in which personal files - including TV shows and music - are stored remotely on the Internet on servers from companies such as Google Inc , Microsoft Corp , DropBox Inc and Box Inc.

Aereo had argued that cloud services use the Internet in the same way as it does to store and transfer copyrighted content.

The case came before the court when Walt Disney Co's ABC network, CBS Corp, Comcast Corp's NBCUniversal and Twenty-First Century Fox Inc appealed a decision by the 2nd U.S. Circuit Court of Appeals in April 2013 that denied their request to shut Aereo down while litigation moves forward.

Aereo, backed by Diller's IAC/InterActiveCorp, charges users a low monthly fee to stream live broadcasts of TV channels on mobile devices using miniature antennas that the company hosts. Aereo does not pay the broadcasters. It was introduced in 2012.

During oral arguments in the case in April, the Supreme Court justices appeared skeptical about Aereo's position in the copyright dispute with major broadcasters, but several raised concerns about how a ruling against the startup could affect cloud computing services.

Some broadcasters such as CBS Corp had even threatened to cut off their free-to-air broadcast signals or create their own low-cost Internet feeds of the channel were Aereo to win.

[11/21/14] Aereo files bankruptcy