• by Wendy Davis , Staff Writer @wendyndavis, January 10, 2014

TV broadcasters say the Barry Diller-backed service infringes copyright by transmitting programs without licenses. Aereo, which launched in 2012 in New York, allows paying subscribers to watch TV on devices like iPhones and iPads. The service also allows people to remotely “record” over-the-air shows for later viewing.

Aereo says it's legal due to its architecture, which relies on antennas to capture and stream programs to users. The company says that no one, including itself, needs to pay fees to use antennas to watch TV. Aereo also argues that its streams to users are not “public” performances -- which would require licenses -- but “private” ones, because each stream is made on an antenna-to-user basis.

But major broadcasters say the service is illegal. The broadcasters have sued Aereo in New York, Boston and Salt Lake City. Broadcasters also have sued the rival service FilmOn X (formerly Aereokiller) in Washington, D.C. and Los Angeles; FilmOn X itself brought a preemptive lawsuit in Illinois.

Judges in New York and Boston so have sided with Aereo, and refused to issue orders banning the company from operating. But judges in Washington and Los Angeles have ruled against FilmOn X -- even though the companies reportedly use the same technology.

The only appellate court to rule on the issue so far -- the 2nd Circuit Court of Appeals in New York -- refused to shut down Aereo. That court said in a 2-1 decision issued in April that Aereo didn't appear to infringe on broadcasters' copyright.

TV broadcasters then asked the Supreme Court to review that decision. In an unusual move, Aereo also asked the Supreme Court to hear the case.

Both the broadcasters and Aereo said they were happy with Friday's news. “We are pleased the Court has agreed to hear this important case. We are confident the Court will recognize that this has never been about stifling new video distribution technologies, but has always been about stopping a copyright violator who redistributes television programming without permission or compensation,” a coalition of broadcasters said in a statement.

Aereo CEO and founder Chet Kanojia also said the company welcomed Supreme Court review. “We said from the beginning that it was our hope that this case would be decided on the merits and not through a wasteful war of attrition. We look forward to presenting our case to the Supreme Court and we have every confidence that the Court will validate and preserve a consumer's right to access local over-the-air television with an individual antenna, make a personal recording with a DVR, and watch that recording on a device of their choice,” he said in a statement.

Companies that win in court -- as Aereo did -- typically don't seek Supreme Court review. University of Maryland law professor James Grimmelmann, who has followed the case closely, proposed that one reason Aereo might have wanted to go to the Supreme Court was to insure that its lawyers -- and not those of its rival, FilmOn X -- litigated the issue. After all, if the Supreme Court passed on this particular dispute, the court would almost certainly have been confronted with the issue again in one of the FilmOn X lawsuits; at that point, FilmOn would have taken the lead in the litigation. “Circumstances lined up to make it in the interest of both sides [for the court] to hear the case now,” Grimmelmann says.

A Supreme Court decision about Aereo could go a long way toward reshaping the broadcast and cable industries. A pro-Aereo decision could pave the way for cable and satellite providers to replicate Aereo's system and transmit broadcaster television programs without paying retransmission fees to the networks. For that reason, some cable companies would appear to have an incentive to support Aereo.

But some cable companies also view Aereo as a competitor, largely because the service is seen as encouraging cord-cutting. In fact, one cable company -- Cablevision -- has already weighed in against Aereo on the legal issues.

The Supreme Court is expected to hear arguments in the case in April.