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Will Cable Companies Be Read Their Last Rites Next Month?

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In the New York metropolitan area, the long-felt seething hatred for cable service may very well be reaching its peak. Just as new basketball wunderkind Jeremy Lin is finally giving Knicks fans something to cheer about, their service provider Time Warner (TWC) -- due to an ongoing contract dispute with MSG (MSG) -- is making the games can’t-see TV. (Check out Minyanville's Jeremy Lin-dex for other affected companies.)

Desperate fans are taking desperate (read: illegal) measures to rightly witness their team’s winning streak. A Brooklyn man who managed to find the games on a pirate Web site is now considering “cutting the cord” on Time Warner. After all, why should he continue to pay $150 a month when he doesn’t even get the programming what he wants?

And though we now have far more than 57 channels, most cable subscribers complain there’s still nothing on. Unless you have a viewing appetite for a half dozen shows about hoarding and storage locker auctions, you’re probably paying for channels you’ll never watch.

My own recent decision to ditch cable came when BroadStar, the small company serving my apartment building, decided overnight to double the cost of my service. In protest, I took a 40-year step back in time and bought a pair of rabbit ears.

But there is an actual future of cheap broadcast television viewing and, according to a startup called Aereo, it’s in the cloud. The new service, with financial backing from IAC/InterActiveCorp (IACI), will distribute over-the-air TV signals through our smartphones and tablets. It was unveiled on Tuesday and plans to launch on March 14, with New York as its first test market.

The $12-a-month service will buy subscribers a dime-sized antenna that provides access to live broadcast TV or recorded programming via a 40-hour capacity, virtual digital video recorder. Those who still want cable content can opt to stream via Netflix (NFLX), Hulu or through the network websites themselves.

“The technology behind Aereo's service is pretty unique,” says CNET’s Matthew Moskovciak. “The company has several large ‘antenna arrays’ set up somewhere in Brooklyn, filled with thousands of mini-TV antennas. Each array is capable of receiving local over-the-air TV broadcasts.” And using an Aereo-compatible products -- which includes iOS (AAPL), Android (GOOG), Roku, and Kindle Fire (AMZN) devices -- the live or recorded broadcast is streamed via the web. Add an HDMI cable, and you got yourself a viable cable alternative.

So hear this cable: If you don’t stop raising our rates while holding our programming hostage, we can soon turn to our pie in the sky, er, cloud.

Just, you know, don't cancel our internet.
POSITION:  No positions in stocks mentioned.