The U.S. Supreme Court on Friday agreed without comment to review a lawsuit from ABC to shut down Aereo's online TV service- a case that could disrupt the future of the television business and Internet innovation.
Aereo retransmits a network TV signal onto a wireless device or computer, and for $8 a month users can watch or record programs. Aereo pays no retransmission fees for using the signals, which violates copyright law, according to the broadcasters' lawsuit accepted by the Supreme Court, entitled ABC, Inc., v. Aereo, Inc. Supporters of the challenge against Aereo include Fox, CBS and NBC.
The case accepted for review by the high court is an appeal to a July decision by the Second Circuit Court of Appeals in New York that refused to shut down the online TV service. The Second Circuit also decided in 2008 that Cablevision obeyed copyright law when it offered a remote DVR, which is a decision Aereo is using as a main defense because the company argues its users have control of its system in a way that is similar to using a DVR.
If Aereo wins this case it could jeopardize the lucrative retransmission payment system that broadcast companies receive from cable providers. Broadcasters may collect more than $6 billion in retransmission fees by 2018, estimates SNL Kagan market research firm. Cable providers may use the opportunity to partner with Aereo or imitate their service to avoid paying retransmission fees if the company wins a legal challenge at the high court.
Aereo's $8 subscription comes with 20 hours of recording time while for $12 a month users can access 60 hours. The service first launched in New York City in 2012, and pledged to expand to 22 new markets by the end of 2013, although legal battles have slowed that process. The online TV service is live in New York City, Boston, Atlanta, Miami, Salt Lake City, Houston, Dallas, Denver, Detroit and Baltimore.
Updated: 1/10/14: This story has been modified to include additional cities in which Aereo operates.