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UPDATE 1-U.S. top court agrees to hear broadcasters' case against Aereo

Lawrence Hurley
Friday, 10 Jan 2014 | 3:25 PM ET

WASHINGTON, Jan 10 (Reuters) - The U.S. Supreme Court on Friday agreed to hear a closely watched appeal filed by the four major broadcasters against online television service Aereo Inc, which they claim steals copyrighted television content.

Walt Disney Co's ABC network, CBS Broadcasting Inc, Comcast Corp's NBCUniversal and Twenty-First Century Fox Inc appealed a decision by the 2nd U.S. Circuit Court of Appeals in April that denied their request to shut Aereo down while litigation moves forward.

Aereo, backed by Barry Diller's IAC/InterActiveCorp , charges users a low monthly fee to watch live or recorded broadcast TV channels on computers or mobile devices. Aereo does not pay the broadcasters.

In a relatively unusual step, Aereo urged the high court to hear the case even though it won in the lower court because it would like a definitive answer on the issue.

The Supreme Court said in a brief order issued on the case on Friday that Justice Samuel Alito will not participate in it.

Aereo subscribers can stream live broadcasts of TV channels on mobile devices using miniature antennas, each assigned to one subscriber. The service was launched in March 2012 in the New York area. The company has since expanded to about 10 cities and plans to enter several more.

The broadcasters claim the service violates their copyrights on the television programs and represents a threat to their ability to control subscription fees and generate advertising.

Among those filing court papers in support of the broadcasts are the National Football League, Major League Baseball and various media companies, including Metro-Goldwyn-Mayer Studios Inc.

CBS said in a statement on Friday that Aereo's business model is "built on stealing the creative content of others."

Aereo counters that its service does nothing more than provide users with what they could get with a personal television antenna.

"We believe that consumers have a right to use an antenna to access over-the-air television and to make personal recordings of those broadcasts," Aereo Chief Executive Officer Chet Kanojia said in a statement.

Several lawsuits pitting Aereo against television providers are playing out across the United States, including in federal courts in New York, Massachusetts and Utah. The Supreme Court appeal stems from the New York litigation.

While the broadcasters have not had success so far against Aereo, they did convince a California federal court to force Aereo competitor FilmOn X to shut down while a lawsuit there goes forward.

A district court judge in Washington, D.C., also ruled in September that FilmOn X must cease to operate everywhere in the country while the lawsuit brought by broadcasters there moves forward.

A ruling in the Aereo Supreme Court case is expected by the end of June.

The case is American Broadcasting Companies Inc, et al, v. Aereo Inc, U.S. Supreme Court, 13-461.