Aereo will launch its internet TV service in Austin next week as Supreme Court date looms

Castle on Aereo TV

Aereo, the startup that streams over-the-air TV channels to computers and smartphones starting at $8 a month, is expanding to a new city even as it prepares for a closely watched Supreme Court hearing that will decide if the service is legal under copyright law.

Aereo said Monday that it will become available to 1.25 million customers in the greater Austin area starting March 3. The service, which lets users watch and record TV through personal mini antennas, is already available in other Texas cities and a handful of other regions, but still faces the threat of being shut down altogether.

Last week, a federal judge in Utah issued an injunction banning Aereo in a handful of western states but stayed the order pending the outcome of a Supreme Court case that will be heard on April 22.

For now, Aereo has gained a foothold in New York, Boston and other northeastern cities where courts have ruled that the service doesn’t violate copyright law. The company, which has received investments worth tens of millions of dollars from media mogul Barry Diller and others, had earlier announced that it would be live in 22 cities by spring. That goal appears unrealistic as Aereo’s map of its current coverage shows the number of cities is closer to 10.

The company has become a legal flashpoint because it represents the greatest threat in decades to the “bundle” model of TV, in which cable and satellite owners sell customers large packages of channels even though most people prefer to watch only a dozen or so.

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