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Divided Federal Appeals Court Rules In Favor Of Upstart TV Service

We told you in February about Aereo, a service that allows its users to watch TV over the Internet. As we said at the time, the service was attracting waves of lawsuits. On Monday, a federal appeals court ruled 2-1 that Aereo doesn't violate U.S. copyright law.

Bloomberg says that broadcasters including ABC and NBC had petitioned the U.S. Court of Appeals in New York to overturn a lower-court order denying a preliminary injunction that would have put the New York-based service out of business. The news service adds:

"The broadcast networks sued Aereo in March 2012, claiming that it infringed copyrights by capturing their over-the-air signals and retransmitting the programming to subscribers on computers and smartphones. Its service would devalue their programming and cut viewership, jeopardizing revenue from advertisers and retransmission payments from pay-TV providers, according to the networks. Aereo's transmissions are public performances and require licenses, they said."

Aereo, which costs $8 per month, now has plans to expand to 22 other markets nationwide.

"You not only get all the over-the-air TV signals in your home market, but you also get 20 hours of stored DVR programming," Bloomberg's Rich Jaroslovsky told NPR's Steve Inskeep in January. "So it's a combination DVR and over-the-air television for a fraction of what even a basic cable package would cost you."

Monday's victory is unlikely to be the last legal challenge Aereo faces. Here's The Associated Press:

"The ruling came in a preliminary stage of the case in federal court in Manhattan. More evidence must be presented to a lower court judge before she issues a final decision. Other legal challenges have been filed elsewhere against a budding industry that stands to challenge the dominance of cable or satellite companies that offer their licensed programming to consumers.

In a statement, the Barry Diller-backed company called the ruling a "victory for consumers."

"Today's ruling to uphold Judge Nathan's decision sends a powerful message that consumer access to free-to-air broadcast television is still meaningful in this country and that the promise and commitment made by the broadcasters to act in the public interest in exchange for the public's spectrum, remains an important part of our American fabric," Aereo founder and CEO Chet Kanojia said. "We may be a small start-up, but we've always believed in standing up and fighting for our consumers."

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