[1] Designed to be an improvement over more expensive traditional cable services, viewers could watch local broadcast TV from New York City and Seattle, and later Chicago and Los Angeles, from anywhere in the world for a monthly subscription of $4.99 without any special equipment.

[2] The same day, ivi issued a press release calling their legal action "a preemptive move to discourage needless litigation from big media," and expressing their desire to "work with content owners [to help] them to realize new revenue streams and reach more viewers from around the globe.

[5] On January 31, 2011, Public Knowledge, the Electronic Frontier Foundation, the Media Access Project, and the Open Technology Institute filed an amici brief with the court in support of ivi.

§111 of the Copyright Act defines a "cable system" as: a facility, located in any State, territory, trust territory, or possession of the United States, that in whole or in part receives signals transmitted or programs broadcast by one or more television broadcast stations licensed by the Federal Communications Commission, and makes secondary transmissions of such signals or programs by wires, cables, microwave, or other communications channels to subscribing members of the public who pay for such service.The court found that "it is simply not clear" whether the text of the Copyright Act would include ivi as a cable system.

Drawing upon Turner Broadcasting v. Federal Communications Commission, the court found that "Congress intended to support localized—rather than nationwide—systems that use cable or optical fibers to transmit signals.

Additionally, advertisers pay large sums to place commercials for specific demographics for broadcast television; ivi's services make this targeting far less effective.

[10] The appeals court reasoned that protection of copyright of broadcast television is in the public interest, by giving incentive to parties willing to create new works.

"[13] In light of this ruling, some have become frustrated that courts' and the FCC's interpretation of what constitutes a cable company has not kept up with modern technology, and that a clear Internet TV policy has not been established.