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Supreme Court Rules Aereo Violates Federal Copyright Law

The decision was reached 6-3.

Supreme Court Rules Aereo Violates Federal Copyright Law

In a landmark decision that will affect the future of television, the Supreme Court ruled Wednesday that Aereo Inc., a service that retransmits television broadcast signals to computers and gadgets, was in violation of federal copyright held by broadcasters like ABC, Fox, and more.

The decision was reached 6-3, with Justices Antonin Scalia, Samuel Alito, and Clarence Thomas dissenting.

Aereo had been available in 11 metropolitan cities, including New York and Boston, and was able to skirt existing copyright law by dancing around the definition of what constitutes a private performance. Its technology gave users access to tiny antennas, which were kept in a remote relocation, that beamed almost-live television to the device of their choosing. Now it appears the company must pay broadcasters a fee in order to remain active, or must shut down the current service. Survival seems unlikely, at least according to one of the company's main investors, Barry Diller.

"We did try, but it's over now," Diller told CNBC's Becky Quick.

The broadcasters were not pleased, arguing that Aereo's service—which charged customers starting at $8 a month—was unequivocally a violation of federal copyright, which makes the startup liable to pay the same hefty retransmission fees levied to cable companies.

"Insofar as there are differences, this differences concern not the nature of the service that Aereo provides so much as the technological manner in which it provides the service," writes Justice Stephen Breyer in the majority opinion. "We conclude that those differences are not adequate to place Aereo's activities outside the scope of the [Copyright Act]."

Earlier this year, at our Innovation Uncensored conference, Fast Company's Austin Carr spoke with Aereo CEO Chet Kanojia about the challenges Aereo, and other startups, face.

In a statement to the press, backer Barry Diller said, "It's not a big (financial) loss for us, but I do believe blocking this technology is a big loss for consumers, and beyond that I only salute Chet Kanojia and his band of Aereo'lers for fighting the good fight."