TV Service Providers Held Talks With Aereo

Aereo Inc., the Web television startup backed by media mogul Barry Diller, has discussed partnerships with major pay-TV distributors and Internet service providers, including AT&T and Dish Network Corp., as it looks to roll out its fledgling service to more markets, people familiar with the matter say.

Aereo, which streams local TV broadcast signals over the Web for a fee, is now available only in the New York City region. It could expand its reach significantly if it joins forces with cable, satellite or phone concerns.

Talks between Aereo and telecom operators haven’t yet yielded any agreements. One big issue is the legal uncertainty surrounding the startup. Aereo is battling a suit by broadcasters, which say it is violating copyright law, in part because it reformats and retransmits their signals without permission—and then charges a fee to its subscribers.

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