Dinn, Hochman & Potter, LLC

Startup company planning to expand to Cleveland faces legal issues

A startup company has caught the attention of some major broadcasting corporations. The entrepreneurial venture is making waves among broadcasters, including Fox, ABC, CBS and NBC because the broadcasters believe that the company is infringing on the broadcaster's rights. The company, known as Aereo, currently operates in New York--and sources say that the company offers subscribers an online service to view television broadcasts on the Internet.

The startup business is looking to expand its service to other markets, including Cleveland, Ohio, according to Crain's Cleveland Business. In all, Aereo reportedly plans to expand to 22 additional markets in the near future, with Cleveland on the list as soon as the end of May. But in the meantime, the entrepreneurial business may have to overcome some legal issues with the broadcast powerhouses.

The media companies reportedly have filed a lawsuit against the startup Internet company claiming that the service is harming the broadcasters. Essentially, the company captures broadcast signals through a series of antennas located in a television market. The company allows people to register for the service. Once registered, the company streams the broadcast content to subscribers.

Broadcasters say that the service unfairly competes with the broadcasting services businesses. The media outlets say that in selling the streaming content, Aereo is taking business away from the broadcast corporations who sell their content through cable services. The media companies are suing the startup company. But in April, a federal appellate court refused to temporarily shut down the startup company pending the outcome of the business litigation.

Source: Crain's Cleveland Business, "Web upstart plans to make (air) waves in Cleveland," Scott Suttell, April 25, 2013

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