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Media Companies, NAB Applaud Supreme Court Ruling Against Aereo

Media conglomerates and the National Assn. of Broadcasters were quick to cheer the Supreme Court’s 6-3 decision Wednesday finding that Internet-streaming startup Aereo violated the Copyright Act.

Aereo characterized our lawsuit as an attack on innovation; that claim is demonstrably false,” NAB president and CEO Gordon Smith said in a statement. “Television broadcasters will always welcome partnerships with companies who respect copyright law. Today’s decision sends an unmistakable message that businesses built on the theft of copyrighted material will not be tolerated.”

Aereo had raised about $97 million from investors including Barry Diller’s IAC and media investor Gordon Crawford. The New York startup has launched service in 11 markets, including New York; the future of the company following its legal defeat is unclear.

In a statement, Diller, chairman and senior exec of IAC, said, “It’s not a big (financial) loss for us, but I do believe blocking this technology is a big loss for consumers, and beyond that I only salute Chet Kanojia and his band of Aereo’lers for fighting the good fight.”

SEE ALSO: Supreme Court Rules Against Aereo in Victory for Broadcasters

Disney, whose ABC network was party to the case, said in a statement, “We’re gratified the Court upheld important copyright principles that help ensure that the high-quality creative content consumers expect and demand is protected and incentivized.”

In the case of CBS — the company with the biggest exposure in the Aereo case — Wall Street reacted favorably, pushing shares up more than 8% after the ruling. CBS stock was up 5% in mid-morning trading.

CBS CEO Leslie Moonves had suggested the company could develop its own over-the-top service and pull down its over-the-air signals if Aereo had won. On Wednesday, the Eye also chimed in with approval. “We are pleased with today’s decision, which is great news for content creators and their audiences,” a CBS rep said.

SEE ALSO: Aereo Founder: Supreme Court Ruling ‘Chilling’ To Technology Industry

Cablevision Systems on one hand had sided with the broadcasters, filing an amicus brief with the Supreme Court asserting that Aereo violated copyright law because it retransmits broadcast content without a license. But the cable operator contested the plaintiffs’ argument that Aereo was retransmitting the original broadcasts of their programming — an interpretation Cablevision feared would overturn the 2008 decision upholding the legality of its network-based digital video recorder service, RS-DVR.

“We are gratified that the Court’s decision adopted a sensible middle ground, holding that unlicensed retransmission services like Aereo violate the copyright law, while protecting consumer-friendly, cloud-based technologies, such as RS-DVR,” Cablevision said in a statement. “The real winner today is the consumer, who will continue to benefit from future innovation.”

But the Consumer Electronics Assn., which had supported Aereo in its fight with the TV broadcasters, said the ruling was a setback. “We are disappointed that the Supreme Court today ruled against innovator Aereo, but are pleased the Court said it favored future innovation and specifically referred to the Sony Betamax principles of fair use as a safety valve for new services and technologies,” CEA president and CEO Gary Shapiro said. The CEA wants broadcasters to relinquish rights to digital TV spectrum they currently own, so that it can be used for new wireless broadband services.

For its part, 21st Century Fox, which owns Fox Broadcasting, said it “welcomes the U.S. Supreme Court’s ruling, a decision that ultimately is a win for consumers that affirms important copyright protections and ensures that real innovation in over-the-top video will continue to support what is already a vibrant and growing television landscape.”

Comcast, which owns NBCUniversal, declined to comment on the decision. The company referred a statement by Paul Clement, attorney for the petitioners: “Today’s decision is a victory for consumers. The Court has sent a clear message that it will uphold the letter and spirit of the law just as Congress intended.”

The American Television Alliance, a lobbying group advocating for retransmission-consent reform whose members include cable and satellite TV operators, said the Supreme Court ruling made action by Congress to enact new rules governing deals between pay-TV distributors and broadcasters even more urgent.

“The decision is a reminder that broadcasters are interested in only one thing — protecting their government-sanctioned monopolies,” ATVA said. “The broadcasters’ business model, which places blackouts ahead of consumers, is devoid of competition or incentive to innovate.”

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