It sounds like what Aereo is doing is illegal. They are capturing over the air broadcast signals and charging users for access to them. I can't capture local radio signals and stream it online legally.
I suppose they could argue they are merely facilitating a service similar to a DVR, but that is hardly 100% true.
Don't believe what the TV affiliate networks (many owned by larger conglomerates) want you to believe.
1) Typically, over-the-air broadcast stations made their money from advertisement revenue (commercials).
2) A looong time ago, the FCC created a rule allowing local broadcast stations to require local cable providers to carry their station.
3) This meant a local station would not be at a disadvantage when local cablecos neglect to carry their station and choose to carry other local stations.
4) This benefits the station because their signal is distributed for free, with better reception, to far more people.
5) More viewers means more ad revenue.
6) A perplexing clause in the FCC ruling allows the local stations to deny cablecos from carrying their signal.
7) Broadcasters got greedy and decided to negatiate per-subscriber fees from cablecos, even though the cableco was helping them reach more people and increase ad revenue.
8) They still broadcast the same content over-the-air for free at much greater expense with high-power antenna transmitters.
9) The precedent is set. Each year, these stations demand higher and higher per-subscriber fees.
11) Sometimes the fees increase more-than-double.
12) They are mostly being pushed by the affiliated media networks (FOX, NBC, ABC, CBS, etc).
13) It's all bullshit.
14) Aereo takes the same signal that's ALREADY GOING OVER THE AIR FOR FREE and allows you to place-shift.
15) It's basically renting a cloud-based Slingbox that is hosted in a redundant regional datacenter.
16) The networks are shitting themselves because they're going to have to go back to their previous revenue model (before they started extorting more money from cablecos and raising costs for everyone).
17) These networks are paying BIG MONEY to lobbyists to make sure they can continue to extort money and keep raising prices.
18) The networks already won a case (unjustly), which is still being appealed by Aereo (last I checked).
19) Aereo is innovative and it's the kind of ingenuity we should all support. I hope they succeed, but I think the deeper pockets of these affiliate networks may ultimately win.