The United States Second Circuit Court of Appeals just rejected an appeal from TV networks against web-television company Aereo by a 2-1 vote, concluding that Aereo's system does not infringe the broadcaster's copyrights. Broadcasters argued that unlike Cablevision, Aereo lacked the proper license to operate — but the court ruled that the license doesn't matter since Aereo customers are streaming their own unique copies to themselves. The remarkably tech-savvy decision for Aereo today clears major legal difficulties for the web-television broadcaster, and will force TV networks to win an appeal either in front of the full Second Circuit or Supreme Court if they want to shut the streaming service down. "The Second Circuit stomped the broadcasters pretty hard," said The Verge's Nilay Patel, a former copyright attorney.

"The Second Circuit stomped the broadcasters pretty hard."

It is beyond dispute that the transmission of a broadcast TV program received by an individual’s rooftop antenna to the TV in his living room is private, because only that individual can receive the transmission from that antenna, ensuring that the potential audience of that transmission is only one person. Plaintiffs have presented no reason why the result should be any different when that rooftop antenna is rented from Aereo and its signals transmitted over the internet: it remains the case that only one person can receive that antenna’s transmissions.

Judge Christopher Droney, Second Circuit Court of Appeals

Aereo allows TV watchers to stream HD video over the web with a proprietary remote antenna and DVR service. For $12 a month, customers can watch more than 20 local broadcast networks, including CBS, NBC, FOX, ABC, PBS, and the CW. The company employs a fleet of miniature antennas that pull broadcast signals from the air, like the classic "rabbit ears" that capture local TV signals, and each customer receives their own antenna; from the start, Aereo contended that it was actually providing a use license for the antenna and the cloud DVR, and not the content itself. Upholding a long tradition of fighting innovation, the broadcast television industry immediately attacked Aereo in court, with a spokesman for the National Association of Broadcasters saying that "they're charging a fee for content they do not own."

"We are confident that we will prevail."

Open internet advocate Public Knowledge quickly hailed today's court decision. "Only in the world of copyright maximalists do people need to get special permission to watch over-the-air television with an antenna," said Senior Staff Attorney John Bergmayer. "Just because 'the internet' is involved doesn't change this." But CBS, a plaintiff in one of the groups suing Aereo, appears undeterred by the decision. "As the courts continue to consider this case and others like it, we are confident that the rights of content owners will be recognized and that we will prevail," a CBS spokesperson told The Verge.

The National Association of Broadcasters, part of another major group suing Aereo, expressed similar confidence; in a statement released today, the NAB said "today's decision is a loss for the entire creative community. The court has ruled that it is ok to steal copyrighted material and retransmit it without compensation." The NAB says that "we have and are considering our options to protect our programming," and "we remain confident that we will ultimately prevail." An NAB spokesperson tells The Verge that "NAB is disappointed with the Second Circuit's 2-1 decision allowing Aereo to continue its illegal operations while broadcasters' copyright actions are heard."

"The promise and commitment to program in the public interest in exchange for the public's spectrum remains an important part of our American fabric."

Aereo naturally welcomed the victory; "Today's ruling sends a powerful message that consumer access to free-to-air broadcast television is still meaningful in this country and that the promise and commitment made by the broadcasters to program in the public interest in exchange for the public's spectrum remains an important part of our American fabric," said Aereo CEO Chet Kanojia. "We may be a small start-up, but we've always believed in standing up and fighting for our consumers."

Aereo's legal difficulties are said to have stunted its growth in markets across the US, and has reportedly caused potential partners, like DirecTV, to shy away from cooperation. For now, today's court decision alleviates Aereo's biggest albatross, allowing it to focus on expansion.

Nilay Patel and Greg Sandoval contributed to this report.