The Supreme Court of the United States (SCOTUS) has issued a ruling in favor of major network broadcasters to deem streaming TV service Aereo illegal.

SCOTUS has reversed a second circuit decision that upheld that Aereo did not violate the Copyright Act. Based on a SCOTUS blog report cited by TechCrunch, Supreme Court Justice Stephen Breyer ruled that Aereo is "not merely an equipment provider" but is equivalent already to a cable firm.

Like Us on Facebook

What sets Aereo apart from other cable firms is that its technology is inactive unless tuned by the user, in contrast to constant streaming. However, the court did not see this single reason as enough to classify the startup's service as private instead of public performance.

One of Aereo's products is a remote mini-antenna that it rents out to its customers, and the other is a DVR/cloud storage service to let them hold recorded programs. Users pay a monthly fee of $12 to receive 30 channels in near live format on any device.

Aereo subscribers can record and transcode content to watch shows in nearly real time, but the service itself does not offer real live TV. Network broadcasters say Aereo's service is classified as public performance, since many of its users watch the content live at the same time.

Aereo, on the other hand, argued that every user controls the content that they watch. The company does not stream content to its users.

Cablevision won a major case in 2007 that allowed it to sell cloud DVR storage services. Under the ruling, any video content watched either live or recorded belongs to the user and is not classified as public performance. This precedent made it legal for a lot of people to download music from iTunes, upload it to the cloud, and retrieve a copy from the latter anytime.

Aereo's founders built the company on this precedent, and the broadcasters who filed the copyright lawsuit are looking to bring down both Aereo and Cablevision.

Meanwhile, the broadcasters argued that content recorded by Aereo's customers should not be counted individually, but the Transmit Clause or Copyright Act does not support this way of classifying private and public performances. If it indeed worked this way, cloud storage firms would be in serious trouble.

Industry observers, however, say that streaming TV service models such as Aereo's must evolve for the sake of millions of customers who have grown increasingly wary of huge TV channel bundles, poor service and high prices - the main reason that Aereo gained a good following.

TagsAereo, Supreme Court ruling on Aereo, Aereo illegal