NEW YORK (TheStreet) -- Aereo loses, and the country's broadcasters breathe a sigh of relief.
The country's largest television networks scored a resounding victory on Wednesday as the Supreme Court ruled that Aereo, a video-streaming service, violates U.S. copyright law by selling the broadcaster's free over-the-air signal through its online subscription service. The court, in a 6-3 ruling, said the decision would not adversely affect cloud computing.
CBS (CBS), Disney's (DIS) ABC, Comcast's (CMCSA) NBC and 21st Century Fox (FOXA) had charged that Aereo was reselling its programming for a fee without paying for it. The broadcasters argued that Aereo should be required to pay each television station in each designated market area, known as a DMA. Aereo's business plan is predicated on not having to pay those so-called carriage fees. Throughout its many legal battles, Aereo has countered that it's simply making it easier for consumers to access a service which they already get.
CBS surged on the announcement, rising 6.2% to $62.51. Shares of Disney, Comcast and Fox also rose on the ruling.
The company is the brainchild of Chet Kanojia, an engineer who developed the digital system, which charges between $8 and $12 a month. The service is currently offered in 11 cities including New York, Houston and Miami.
In a statement, Kanojia said " We've said all along that we worked diligently to create a technology that complies with the law, but today's decision clearly states that how the technology works does not matter. This sends a chilling message to the technology industry," adding that the decision "begs the question: Are we moving towards a permission-based system for technology innovation?"
An Aereo spokeswoman, in an e-mail, declined to comment on whether the decision will force the company to shutter its operations and go out of business.
The three-year-old company, which uses thousands of small antennae to redirect satellite signals to individual users, received early backing from Barry Diller, the long-time media entrepreneur and chairman of IAC/InterActive Corp (IACI). Diller, who sits on Aereo's board, has said the company would likely close if the court rules against it.