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Monday, April 01, 2013, 05:34 pm PT (08:34 pm ET)

Appeals court denies broadcasters' motion to shut down Aereo TV streaming service

A New York federal appeals court on Monday upheld a prior ruling in favor of broadcast television streaming service Aereo, disappointing broadcasters, who say that company's operations constitute illegal retransmission of owned content.

A district court judge last year blocked an attempt by CBS, Comcast, News Corporation, and Disney, to stop Aereo from retransmitting their broadcasts to subscribers in New York, the only state in which Aereo is currently available. Those subscribers pay about $8 per month to Aereo, which set up an array of antennas that receive over-the-air television broadcasts before routing the signal through the Internet to a subscriber's phone, computer, or tablet.

The broadcasters contend that Aereo's operations are "public performances" of their protected content, and that the service is thus in violation of retransmission rules governing their broadcasts. With other operators like Time Warner already paying for retransmission rights, the broadcasters looked to win a preliminary injunction against Aereo in a bid to stem possible lost revenue.

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On Monday, the Court of Appeals for the Second Circuit upheld the lower court's prior ruling in a 2-to-1 decision. The majority opinion found that the broadcasters were "not likely to prevail on the merits."

The New York Times reports that one judge out of three dissented, claiming that the antenna array Aereo uses to capture content before retransmission is a "Rube Goldberg-like contrivance, overengineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law." That judge, Denny Chin, said that the streams were in fact "public performances" and thus in violation of copyright.

Representatives for the broadcasters expressed their disappointment at the verdict. "Today's decision is a loss for the entire creative community," they said in a statement. "The court has ruled that it is O.K. to steal copyrighted material and retransmit it without compensation."

The representatives went on to say that they are considering their options to protect their programming.

With the positive ruling, Aereo now plans to expand its operations to 22 more cities this year. "We always thought our Aereo platform was permissible and I'm glad the court has denied the injunction. Now we'll build out the rest of the U.S.," said media mogul Barry Diller, a major backer of Aereo.

The case is unlikely to end with Monday's decision, however, as the Federal District Court in Los Angeles ruled against an Aereo-like service called Aereokiller in December.