For decades, U.S. law has required cable and satellite providers to get permission before rebroadcasting TV networks' signals, lawyers for the networks wrote in their petition to the Supreme Court.
"The broadcast television industry has invested billions of dollars producing and assembling high-quality and creative entertainment and news programming in reliance on this legal regime, which prevents retransmission services from free-riding on broadcasters' investments and provides broadcasters with incentives for further investment and innovation," the networks' lawyers wrote.
A year-old decision by the U.S. Court of Appeals for the Second Circuit, denying an injunction sought by the networks, "threatens to upend this regime by blessing a business model that retransmits 'live TV'
to paying customers without obtaining any authorization or paying a penny to the copyright owners," the networks' lawyers wrote.
Aereo's service puts at risk the long-time cable retransmission payment model, worth an estimated US $4 billion this year, lawyers for the networks argued.
The Second Circuit's decision "provides a blueprint for video on-demand providers, cable companies, and Internet streaming services to circumvent Congress' intent and to avoid compensating copyright owners when they retransmit broadcasts of copyrighted works to their paid subscribers over the Internet," they wrote.
But the Second Circuit found that Aereo's users, by making personal copies of TV programs for their own use, were not creating public performances. Aereo makes use of technology already found by courts to be legal, combing mini TV antennas, DVRs, and a Slingbox-like streaming service, Judge Christopher Droney wrote in the appeals court decision.
Aereo, which is privately-held and backed by Barry Diller's IAC and other investors, is available in about a dozen U.S. cities, including New York City, Boston, Houston, Atlanta and Miami, and the company plans to expand to more than a dozen more in the near future.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is firstname.lastname@example.org.