Good report, but you missed something important.

Aereo may be doing a terrible disservice to the average citizen.

Broadcasters are currently required to provide free over the air local broadcasting ( to all citizens with a local aerial antenna) as established in the Telecom Act—and for that matter all previous telecommunications legislation.

Aereo may actually be providing broadcasters a justification to renege on that free service. And thus we will see the last vestige of truly free public spectrum.

Like others, I was disappointed in Bob's sympathy for the TV stations. I think you should examine the great wealth transfer that occurred when analogue TV was eliminated. The cell phone and cable companies somehow convinced our law makers that everybody would be happy with the change. It ain't so. Cell phone companies grabbed more spectrum and cable companies grabbed more subscribers. It used to be if you lived within 80 miles or so from a transmitter you could watch broadcast TV using a rabbit ears antenna. I have never been a cable subscriber and have so far have avoided it. The Digital signal is great if you can pull it in. I live only 15 miles from the transmitter, but on some days certain stations are blank.
Somewhere I read that the data about who could get broadcast TV after the digital switch-over assumed that everyone would have a tall TV antenna tower. I got my discounted digital converter box, but who is going to install the tower for me?

Bob, I'm surprised at your dismay over the legitimacy of AEREO. What they are sending to their users is a broadcast signal, not a closed circuit signal. They are, in essence, a booster antenna for the user. As long as broadcast still exists, this seems eminently defensible.

As to "cheating" broadcasters out of cable fees, let's get something out of the way: cable pricing is the thing that's indefensible. I'm not a rabid sports fan. The oft-cited fact that ESPN grabs a huge share of cable fees kind of fries my fish - or would, if I subscribed to more than the bare bones cable deal. Since most of what's of any interest from that stripped down package are the broadcast channels, and since the only thing between me and getting those channels clearly is a fine antenna, what exactly is wrong with tapping the AEREO antennae? I could purchase an antenna array myself (no benefit to the broadcasters) and tune in those channels legally. I could even let my neighbors connect to my antennae array. Paying the antenna owner to get what is broadcast FREE? That is BROADCAST - cast out broadly for all - not sent through a private system of wires or fiber optics ... that ought to remain free. Those broadcast waves still are ruled by you and me. If broadcasters want to stop broadcasting, so be it. As long as they are, anyone with an antenna should be able to boost that signal. (There was a time not long ago when broadcasters would have kissed anyone who would do something like this to gain them more eyeballs. Remember that?)

I doesn't seem Aereo is unfair competition. The networks have reaped a large
windfall from the cable by receiving large fees for what is and has been
available for free over the airwaves. They are obligated because they received licenses to public airwaves. Public access has been diminished due to
non competitive monopolistic arena. The worse result is the gouging by cable
companies. Just because they (entertainment providers) have created a system
to their advantage doesn't they should be immune to new technology and competition.

This is the type of service I have needed since analog TV disappeared. I can not receive any digital over the air signal no matter what legal size antenna I buy at Radio Shack. My PC has been my "TV" for over 20 years and I have only subscribed to cable for less than a year in that time when the Celtics were in the NBA finals. Aereo's antenna is a perfect solution to my dilemma.