Broadcasters lose round one against Aereo internet service

Aereo, the hotly debated service that uses mini-antenna arrays to beam local stations to New York City viewers on the Internet, has won its first round in a court case against several of New York's local stations and broadcast networks that are trying to stop the company from operating.

Aereo began streaming over-the-air television broadcasts in New York City a couple months ago in spite of a series of lawsuits.

In the first action in the case, a federal judge dismissed an unfair competition claim against Aereo. The company had argued that the anti-competition claim by broadcasters was actually an attempt to vindicate the broadcasters' rights to control the performance of their copyrighted materials.

Because those rights are granted under federal law, the state law claim by the broadcasters was preempted and dismissed by U.S. District Judge Alison J. Nathan from the case pursuant to the Copyright Act.

Despite the initial victory, Aereo still faces a copyright claim by broadcasters next week in the same court.

“It’s disappointing,” a representative for Fox, one of the broadcasters whose claim was dismissed, told the Wall Street Journal ( “But we look forward to our day in court to prove that Aereo’s unauthorized streaming of our content constitutes copyright infringement.”

Aereo, backed by media mogul Barry Diller, began streaming broadcast signals in March over the Internet to New York City residents for $12 a month. Major broadcasters sued to shut the service down, claiming copyright infringement and unfair competition. The broadcasters are not being paid for Aereo’s use of their signals.

Aereo uses micro-sized antennas to pick up television signals off the air and combines the signals with a software-based VCR. The company claims the service is no different from a subscribers purchasing a television antenna at Radio Shack.