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Aereo reopens to new members in New York

Shortly before the start of the Olympics, Aereo reopens one of the two cities that ran out of capacity for new members.

An array of Aereo antennae
Aereo's arrays of tiny antennas let consumers watch live, local television broadcasts online.

Aereo, the online TV startup that streams broadcast television, reopened its service to new members living in New York, after it halted its acceptance of new subscribers there and in Atlanta because of capacity problems.

An Aereo spokeswoman said the company was sending invitations to people in New York who signed up on a wait list. Aereo hasn't opened up New York registrations to the general public yet, as it wants to give those on the wait list priority, she said.

The sellouts came before the Sochi Olympic games, one of the biggest broadcast television events of the year, which will air on NBC through most of February.

Aereo, backed by IAC Chairman Barry Diller, offers a cloud-based DVR that lets users record over-the-air programming and play it back on personal devices, charging $8 a month for its cheapest package. It has been sued repeatedly by media companies, which claim the service infringes their copyrights.

Aereo is set up to assign an individual, tiny antenna for every subscriber, and it makes an individual copy of the content for each user. That format is a tool to circumvent copyright restrictions -- anyone is allowed to watch broadcast TV free with an antenna, and Aereo argues it is simply operating each member's antenna on his or her behalf -- but the one-antenna setup also means that when enough people sign up for Aereo in one of its markets, no more can join until more antennas, networking, and real estate are added.

A lawsuit brought by media companies (including CBS, the parent of CNET) is heading to the US Supreme Court later this year.

Read: Aereo's Supreme Court battle may change how you watch TV

Aereo launched in New York in March 2012, and since then has expanded to 11 total cities, including Boston, Atlanta, Miami, Salt Lake City, Houston, Dallas, Detroit, Denver, Baltimore, and Cincinnati. San Antonio is set to launch later this month.

The company aimed to be in 22 total cities last year, but has been held back by technical difficulties on top of accumulating legal wrangling. Its rollout in Chicago, what would have been its biggest market after New York, remains in limbo because of difficulty weatherproofing antennas, and the company has faced problems in Pittsburgh as well.

Updated at 11:15 a.m. PT: with Aereo statement.