Aereo takes another lump in search for legal legitimacy

By Ben Mook

Internet TV service Aereo’s bid to find a workable business model suffered another legal setback Thursday, with the U.S. Court of Appeals in New York ruling that a federal district court judge will determine whether the company qualifies as a cable operator.

After losing a U.S. Supreme Court copyright fight in June to a group of commercial and noncommercial broadcasters, Aereo has tried to recast itself as a cable operator. Doing so would allow it to carry content if it pays networks for programming.

Aereo initially launched as a subscription service, using banks of dime-sized antennas to capture broadcast signals and convert them into streaming video distributed over the Internet. Subscribers rented the antennas and could watch TV programs live or on demand via a device similar to a digital video recorder.

The Supreme Court ruled the service to be in violation of the Copyright Act and noted that Aereo operated as cable companies do, prompting Aereo’s effort to reposition itself.

The appellate court did not act on that argument, returning it to a federal district court to decide. According to Bloomberg News, “the U.S. Copyright Office in July said it would hold off on taking action on granting Aereo the license needed to stream video online until the startup’s status is clarified by the courts.”

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