A federal judge has ruled that video-streaming service FilmOn should be treated like a cable company and is entitled to the same compulsory copyright license that cable systems get.

It's a huge and unexpected win, coming not long after Aereo failed when it tried to make the same argument in court. If upheld, the decision would open a route to legal TV-over-Internet businesses—not just for FilmOn but for future competitors.

In his 15-page order, US District Judge George Wu acknowledged that his preliminary decision is in direct conflict with the 2nd Circuit, and he said he'll allow an immediate appeal to the 9th Circuit. The TV broadcasters who sued FilmOn for copyright infringement, which include all four major TV networks, will surely pursue that option.

Aereo had tried to argue that it was essentially an antenna-rental service. It had arrays of dime-sized antennas set up in New York, where it collected TV broadcasts and sent them out over the Internet, bundling them together with DVR-like features for as little as $8 a month.

The US Court of Appeals for the 2nd Circuit said Aereo was in the clear, but the Supreme Court disagreed, holding in a 6-3 opinion that the company looked too much like a cable system to avoid paying copyright fees.

After that, Aereo went back to court, asking to pay the compulsory license rate that cable companies pay to re-broadcast television. But the New York district court slapped down Aereo, saying that even though the Supreme Court had knocked out its earlier arguments, it still wasn't entitled to the compulsory copyright license.

Strategic moves

The TV plaintiffs initially took their case against FilmOn to the 9th Circuit to avoid the Cablevision precedent that had initially allowed Aereo several court wins. "In filing this case, Plaintiffs hoped for a different result under the law of the Ninth Circuit," wrote Wu. "And they got one."

The East Coast litigation turned around once the TV companies won at the Supreme Court. The High Court found that Aereo looks so much like a cable system, it should be treated as one legally. Aereo lawyers went back to court seeking to get the same compulsory license that cable companies get. But a New York federal court rejected that option, citing a decision against an earlier TV-over-Internet attempt, ivi TV.

Like Aereo, FilmOn switched its legal theory after the Supreme Court ruling. Happy with the results in New York, the TV companies asked Wu to move any argument over the compulsory license to that venue. But Wu, sensing that the broadcasters were nakedly venue shopping, wouldn't do it.

"Plaintiffs wanted a fresh look at the Second Circuit's decision in Cablevision/Aereo, and they will now get a fresh look at the Second Circuit's conclusions in [ivi II]," Wu stated at a 2014 status conference.