On Monday, the Second U.S. Circuit Court of Appeals denied a motion from a group of broadcast media companies that would have shuttered Aereo while the court decides the legality of its services. Broadcasters are suing the company alleging that its Internet TV service violates their programming copyrights, Reuters notes.
Aereo, which is backed by IAC/InterActiveCorp (NASDAQ:IACI) Chairman Barry Diller, transmits live TV programming to mobile devices using thousands of small antennas without paying retransmission fees. Not surprisingly, broadcast giants including Comcast‘s (NASDAQ:CMCSA) NBCUniversal, CBS (NYSE:CBS), News Corp.‘s (NASDAQ:NWSA) Fox and Disney‘s (NYSE:DIS) ABC Network, which stand to lose billions in fee revenue, object.
While one judge on the three-judge appeals court panel, sided with the broadcasters, two others said that Aereo’s service appeared to comply with a previous court precedent.
Earlier this year, Aereo announced plans to expand its service area from New York City to 22 other major metropolitan areas nationwide.
Shares of Comcast, CBS, Disney and News Corp. all climbed in Tuesday midday trading.