Aereo Inc. sued by local television networks

American television networks have sued a startup being backed by billionaire Barry Diller that enables people to view live local TV on their iPhones and iPads in the New York area.

ABC, CBS, NBC, Fox and PBS filed cases in Federal Court last Thursday saying that Aereo Inc.’s service is using their content without permission from the companies.

Aereo was inaugurated two weeks ago. People need to pay a monthly fee of $12 to access 27 locally broadcasted shows through the net on their Apple devices.  It was due to be open to more subscribers on March 14 but this current development puts a hold on that.

The company says that the cases filed against them are groundless and they look forward to “a full and fair airing of the issues.”

They have about $25 million dollars in capital, with more than $20 million coming from a funding round led by InterActiveCorp. The latter owns Match.com, Ask.com and a few more Websites.

Aereo is exploiting what they deem is a loophole in the system. They don’t use a big antenna to get local broadcasts. They use a single tiny antenna for each subscriber that is watching.

But television networks don’t believe and don’t buy their argument.

The suit that the networks filed claims that, “Aereo’s service to the end user is similar to and competes with cable or satellite operators and telephone companies that also retransmit broadcast programming to their subscribers, except that Aereo’s service is unlawful.”

Image source: Bloomberg.com