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Aereo counter sues broadcasters in Internet streaming dispute

Aereo, the broadcast-to-Internet start-up backed by billionaire Barry Diller, has upped its legal battle in New York City. Last week, it countersued Fox, PBS, Univision, WPIX, and WNET asking a U.S. District judge to rule that Aereo isn’t violating the networks’ copyrights.

The new filing came eight days after Aereo, which launched its service in the New York City area on March 15, brought a similar case against Walt Disney Co’s ABC, CBS Corp., Comcast Corp’s NBCUniversal and NBCUniversal’s Telemundo.

Broadcasters argue that Aereo will illegally cut into retransmission fees—the money they get from cable and satellite operators and other video service providers that rebroadcast their shows. The fees are growing as broadcasters get more aggressive and now make up a larger portion of their revenue.

However, as digital technology evolves, new players and services continue to challenge traditional distribution channels. The networks and broadcasters are taking the Aereo threat very seriously.

Aereo argued that “settled law (shows) conclusively that Aereo’s business is entirely lawful.” The broadcasters, it said, have no case.

“When a consumer is accessing broadcast television using the Aereo technology, he or she is using a specific individual antenna that is tuned and used only by that consumer for the duration of that access,” Aereo said in its filing, adding that the company “simply provides to its members the convenience of locating at a remote facility the type of equipment they could otherwise have in use at home.”

The company’s website says that with its service, consumers “can now watch live, broadcast television online. On devices you already have. No cable required.”

Aereo uses a single dime-sized micro antenna for each customer. Viewers have the option of cloud-based DVR storage, but they can only access their own recordings. The company may have legal precedent in Cablevision’s network DVR, which was cleared to run after TV providers lost arguments that storing video in the cloud was allegedly illegal.

Last month, Aereo said it had received $20.5 million of financing led by Diller’s IAC/InterActiveCorp, an entertainment and technology company whose businesses include and Citysearch.