The legal action had been brought by billionaire Bruce Gordon's WIN Corporation in a bid to stop its metropolitan affiliate Nine Entertainment streaming its channels live over the internet into WIN's broadcast areas.

While the ruling is specifically related to Nine and WIN's affiliate agreement, it does highlight legislation that prevents television networks from broadcasting to more than 75 per cent of the population – which the government admits is out of date.

WIN has the rights to "broadcast", in the traditional sense, Nine's content exclusively in its regional areas over its free-to-air television network.

But the internet has changed the value of those rights.

Nine can live-stream its channels and all its catch-up content to 100 per cent of Australia over the internet, side-stepping the so-called "reach rule".

The definition of "broadcast" in Nine's contract with WIN, as ruled by Justice David Hammerschlag on Thursday, does not include streaming.

WIN, along with its fellow regional broadcasters, will no doubt use this ruling as further credence to its case that the reach rule needs to be scrapped.

The government's proposed removal of the reach rule – along with the "two-out-of-three" rule that prevents media companies from owning a TV network, radio station and newspaper in the same market – has been delayed until after the federal election, which is earmarked for July 2.

There is a fair amount of support for removal of the reach rule, but the two-out-of-three rule remains contentious within some factions of the Labor Party.

The removal of the reach rule would allow metro and regional TV networks to merge.

Internet players such as Netflix, Stan (which is 50-50 owned by Nine and Fairfax Media) and Presto (a joint venture between Foxtel and Seven West Media) face no such restrictions on where they can stream their content within Australia.

The Seven Network live-streams all programming via the internet, while rival Ten streams a selection of its content.

Along with Google's YouTube and Facebook, digital interlopers are taking audiences from traditional broadcasters – both regional and city-based.

Try telling a Netflix user in Wollongong they can't watch House of Cards because of their geographic location – you'll likely be scoffed at.

Those arguing for the removal of the reach rule will say they are being prevented from competing on a level playing field, because they don't have access to the same potential audience, as the law prevents them from broadcasting to the entire country.

Thursday's court ruling will also have implications for upcoming affiliate negotiations, with contracts between WIN and Nine, as well as Ten and Southern Cross, due to expire at the end of June.

Metro broadcasters are believed to be seeking greater payments from their regional counterparts for rights to their content. However, for a regional broadcaster, the ability for its metro partner to simply go over the top, via the internet, may devalue the programming.