Aereo Loses Appeals Bid to Be Seen as Cable Operator

Aereo Inc., the streaming video company that was found by the U.S. Supreme Court to be violating broadcasters’ copyrights, lost a new bid to be recognized as a cable-TV service.

Aereo will have to ask a federal district judge to determine whether it can change its business and operate like a cable company that pays networks for programming, the U.S. Court of Appeals in New York said in an order today.

Aereo’s service, which was available in 11 cities and cost as little as $8 a month, gave customers another way to watch live and recorded broadcast TV without paying for cable-TV packages.

Reinventing itself would put Aereo in the same category as the companies it set out to replace -- major cable and satellite providers such as Comcast Corp. (CMCSA) and DirecTV that can charge $70 a month for cable and broadcast channels. Aereo is backed by billionaire Barry Diller, whose company IAC/InterActiveCorp took a writedown on its investment in the last quarter.

After the Supreme Court ruled Aereo violated copyrights by transmitting live and recorded broadcast programming from small antennas via the Internet, the company said it could instead operate like a cable-TV provider.

The U.S. Copyright Office in July said it would hold off on taking action on granting Aereo the license needed to stream video online until the startup’s status is clarified by the courts.

The district court cases are Aereo v. CBS Broadcasting Inc., 13-cv-03013, and American Broadcasting Cos. Inc. v. Aereo Inc., 12-cv-01540, U.S. District, Southern District of New York (Manhattan).

To contact the reporters on this story: Erik Larson in federal court in New York at elarson4@bloomberg.net; Karen Gullo in federal court in San Francisco at kgullo@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Andrew Dunn at adunn8@bloomberg.net Andrew Dunn, Sarah Rabil

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