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Editorial: Deflating Aereo

The highest court in the land has ruled that Aereo’s service as currently constituted is illegal, unless it pays a copyright fee for retransmitting broadcast signals over the Internet.

The decision was not a big surprise. In oral arguments, the court’s majority seemed unconvinced by Aereo’s position that it was a facilitator of technology rather than an MVPDlike distributor of programming. But it was clearly a big win for broadcasters— some analyst protestations notwithstanding. Their business model is taking enough of a beating from competitors that do pay for content and a government that wants to pay them to give up valuable spectrum.

It’s unclear how the decision affects other potential work-arounds to broadcasters’ business. But the court was clear that Aereo was not just a nifty new tech for remote access to free TV signals.

Aereo’s over-the-top video model is akin to a cable system, which also uses technology that allows its subs to more easily access TV station signals.

The decision provides the FCC guidance as it figures out how to define an MVPD, which it must eventually do.

This is likely not the last time broadcasters will face disruptive video distribution models, but it should be the last time they face this illegal one.