WASHINGTON -- The Supreme Court blocked an innovative Internet streaming service Wednesday from potentially upending the way Americans watch television.
The justices sided, 6-3, with the nation's major TV networks and cable companies against Aereo, an Internet startup that rebroadcasts live programs to subscribers without paying retransmission fees.
The broadcasters had warned that if one company was allowed to avoid those fees, others -- from Dish Network to DirecTV -- surely would follow. That would risk billions of dollars in revenue that broadcasters plow back into creating new programs. Retransmission fees brought in an estimated $2.37 billion in 2013.
Now, however, new technologies such as cloud computing may be hampered by fears that traditional content providers will demand fees for services that are now free, such as cloud storage. During oral arguments in April, Aereo's attorney, David Frederick, said "the cloud-computing industry is freaked out about this case."
Aereo, backed by media mogul Barry Diller, co-creator of Fox Broadcasting, operates in 11 major cities and had plans to expand rapidly. The court's ruling threatens to put it out of business.
Justice Stephen Breyer wrote the decision. Justices Antonin Scalia, Clarence Thomas and Samuel Alito dissented.
By Susie Madrak — June 25, 2014