This article tells pretty much the entire story very well:
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features.blogs.fortune.c ··· n-aereo/Basically that the old Supreme Court rulings favored free carriage of OTA TV by Cable until Congress passed laws protecting and aiding Broadcasters.
I totally agree with those that posted above stating that Free OTA TV should be free to all, regardless of how it is delivered, and if the broadcasters don't agree they should GIVE BACK THEIR LICENSES, that they did not purchase from the "people" in any way.
Someone with a different business model can make a go of it, or use the frequencies for wireless broadband or something else.
One other thing - cable ops
do not insert commercials on OTA broadcast channel feeds, except in very rare cases where they have a cooperative agreement with the broadcaster to do so. (This could involve allowing the broadcaster to 'zone' their ads based on cable service areas.)