MUMBAI: In a setback to US television broadcasters, a Federal Appeals court has ruled that Aereo can continue to stream live TV through its site and app.

The digital TV startup which is backed by Barry Diller will be able to continue operating and the dispute is expected to get a proper court hearing.

Aereo streams TV channels without compensating them, but the broadcasters feel they will win eventually. But Aereo, which is only available in New York City, plans to offer its service in nearly 24 more cities this year.

Channels like CBS, Disney and Fox complain that none of Aereo‘s $8 a month fee goes to the local TV stations. This is not the case when programming is carried over cable and satellite services, which have to pay the stations rebroadcast fees - fees the TV stations are increasingly depending on in a time when ad revenue is on the decline because of competition from Internet ad services.

The broadcasters said in a statement: “This was a loss for the entire creative community. The court has ruled that it is okay to steal copyrighted material and re-transmit it without compensation. While we are disappointed with this decision, we have and are considering our options to protect our programming.”

Aereo CEO Chet Kanojia said, “We may be a small start-up, but we have always believed in standing up and fighting for our consumers. We are grateful for the court’s thoughtful analysis and decision and we look forward to continuing to build a successful business that puts consumers first.”