News Corp. Threatens To Pull Fox Off Air Over Aereo Dispute

* Court rejected petition to block service last week

* Fox says committed to free broadcast signals

By Liana B. Baker

LAS VEGAS, April 8 (Reuters) - Broadcast TV network Fox could become a subscription service that customers would have to pay for if the courts are not able to protect Fox's business from the startup Aereo, News Corp Chief Operating Officer Chase Carey said on Monday.

Carey's comments come a week after a U.S. appeals court rejected a petition by the major broadcasters to stop the online service Aereo, which offers a cut-rate TV subscription for consumers by capturing broadcast signals over thousands of antennas at one time.

"If we can't have our rights properly protected through those legal and political avenues, we will pursue business solutions. One such business solution would be to take the network and turn it into a subscription service," said Carey, speaking at the National Association of Broadcasters show in Las Vegas.

News Corp owns Fox and Monday's comments represent the most drastic action threatened by a broadcaster so far in regards to the Aereo case. The television industry is closely watching the case to see whether it could disrupt the traditional TV model.

The industry sees Aereo and other similar services as a threat to its ability to control subscription fees and generate advertising income, its two main sources of revenue.

Aereo is backed by IAC, a company chaired by media heavyweight Barry Diller, who actually was behind the launch of the Fox Network in 1986.

"It's disappointing to hear that Fox believes that consumers should not be permitted to access free-to-air broadcast television," Aereo spokeswoman Virginia Lam said in a statement on Monday.

Carey added that if Fox became a subscription service, it would be in partnership with its content partners and affiliates. He emphasized in his remarks that pursuing legal avenues would be the priority, however, before making such a move.

Last June, News Corp announced a plan to split its publishing and entertainment assets into two publicly traded companies. The entertainment businesses, which include the 20th Century Fox film studio, Fox broadcasting network and Fox News channel, will be called the Fox Group.

Fox also released a statement reiterating that it is committed to making its broadcast signals free for individual consumers.

News Corp shares rose 2 percent to $31.25 in afternoon trading. Besides News Corp, others participating in the Aereo lawsuit include Comcast's NBC, Disney's ABC and CBS.



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