By Ian Bush

PHILADELPHIA (CBS) — The US Supreme Court has dealt an apparent death blow to a web upstart that aimed to change how we watch TV and how much we pay for it.

The justices today ruled that the way Aereo is doing it is copyright infringement.

Philadelphia was next in line for Aereo, the service that streams TV signals it grabs out of the air to customers who can watch live, or later over the Internet.

“That kind of approach fundamentally flips copyright law on its head,” says Neal Katyal, who has advised CBS and other broadcasting companies in making their claims that Aereo delivered everything — from the Super Bowl to “Scandal” and local, late news programs — illegally, because the copyright owners didn’t get a dime.

“If they can’t run a business effectively, maybe they should give it to somebody else who can,” said Aereo boss Chet Kanojia a couple of months ago.  He had said it wasn’t his problem if his company blows up the traditional broadcast model.  He argued that each subscriber, for $8 a month, was in control of a tiny antenna —  no different than rabbit ears.

Now, though, Aereo sounds like it’s throwing in the towel.  In a statement, Kanojia calls the decision “a massive setback for the American consumer,” saying that it “sends a chilling message to the technology industry.”

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