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Aereo Injunction Sets Stage for Supremes

When the case against Aereo heads to the US Supreme Court on April 22, the video company's fate will be determined by whether the justices decide that Aereo is legally retransmitting over-the-air television signals.

In this week's case in front of the US District Court of Utah, however, Judge Dale A. Kimball also had to decide whether Aereo Inc. has the potential to cause irreparable harm to broadcasters. On both counts, Judge Kimball ruled against Aereo. The judge called Aereo's retransmission of television signals "indistinguishable from a cable company" and issued a preliminary injunction, shutting down service in several western states until the case is heard by the US Supreme Court this spring.

Aereo's legal argument against copyright infringement is that, just as with Cablevision Systems Corp. (NYSE: CVC)'s remote-storage network DVR service, it is delivering individual, private performances of television content. Each Aereo subscriber is assigned his or her own personal antenna and video stream. Broadcasters, however, dispute that claim by pointing out that retransmission services are meant to be included in the defined scope of a public performance. Aereo, they declare, is therefore skirting the law by not paying retransmission fees. (See Aereo Headed for Supreme Court?.)

Unlike in Utah this week, an earlier ruling by the US Second Circuit Court found Aereo not guilty of copyright violation. The Supreme Court will have to arbitrate between the different circuit courts and decide which interpretation of the law has the most merit. If it finds in broadcasters' favor, Aereo's operations will be seriously curtailed, if not completely halted. If the court sides with Aereo, however, broadcasters risk losing out on retransmission fees that SNL Kagan predicts will top $6 billion by 2018. (See 'Free' TV Model Under Threat.)

The stakes are high on both sides of the legal argument, and only the Supreme Court can deliver the final verdict. The countdown to April 22 is on.

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— Mari Silbey, special to Light Reading

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