Aereo tunes Web TV with legal angle: micro-antenna startup expected to cite cablevision RS-DVR ruling.(NEWS & ANALYSIS)

WILL AEREO FLY?

The startup, whose backers include media mogul Barry Diller, is launching a subscription service in New York next month that provides live broadcast TV channels and network-based DVR over the Internet for $12 per month.

It's pitched as an over-the-top alternative to cable TV--but it could be broadcasters that mount a legal challenge to Aereo's plans.

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The Aereo service is based on dime-size antennas. In New York, these are housed in giant arrays somewhere in Brooklyn that receive over-the-air TV signals and transcode them in real time for delivery to iPhones, iPads and other devices, without the need for a set-top box.

The company's legal justification: Each antenna is dedicated to an individual Aereo …