The Supreme Court declared Wednesday that Internet video service Aereo is illegal.
The 6-3 decision is a huge win for the TV networks, who feared that Aereo could destroy their business model.
Writing for the majority, Justice Stephen Breyer concluded that the "purpose" of copyright law makes it clear that Aereo's service is a "public performance," and the company therefore needs permission for TV content.
Aereo allows subscribers to watch and record local TV channels on their computers, tablets, phones, and Internet-connected TVs for as little as $8 per month. The problem is that unlike cable providers, Aereo doesn't pay the TV stations for their content.
Everyone has the right to access over-the-air TV channels using an antenna. Aereo calls itself a "modern-day television antenna and DVR." But Aereo subscribers don't have antenna arms sticking out of their tablet computers. Instead, Aereo uses a cluster of thousands of tiny antennas to deliver video over the Internet to all of the subscribers in an area. Technically, subscribers are renting access to one of those antennas.
But the court didn't buy Aereo's description of itself. Breyer wrote that the history of copyright law "makes clear that Aereo is not simply an equipment provider," and is actually "substantially similar" to a cable TV service. Therefore, Aereo should have to pay retransmission fees just like cable providers do, the court ruled.