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A federal appeals court today denied the appeal from a group of broadcasters including CBS Corp. (NYSE: CBS), The Walt Disney Co. (NYSE: DIS), which owns the ABC television network, News Corp. (NASDAQ: NWS), owners of the Fox network, and Comcast Corp. (NASDAQ: CMCSA), which owns the NBC network, and others against a streaming video service provided by a small company called Aereo, which is backed by Barry Diller, the CEO of IAC/InteractiveCorp (NASDAQ: IACI).

In a July ruling, a district court judge denied the broadcasters request for an injunction to stop Aereo from offering its service. Today’s ruling denied the broadcasters’ appeal of that ruling.

Aereo, currently only available in New York City, makes an miniature antenna that captures over-the-air broadcast TV signals and then sells subscriptions to those signals via streaming over an Internet connection. In the original ruling, the judge stated that the Aereo device is virtually the same as a DVR, a device that was declared legal several years ago because its retransmission of programming is made to a single subscriber and is not a performance aimed at the general public. As such, the device does not violate copyright law.

There is too much at stake here for this to be the last word, but the situation does not look good for the broadcasters.