Big Four Broadcasters Sue Streaming Video Provider Locast, Claim It's 'Aereo 2.0'

from the when-at-first-you-don't-succeed dept

The nation’s four biggest broadcast networks (ABC, CBS, Comcast NBCUniversal and Fox) have filed suit (pdf) against a streaming video nonprofit they say is “illegally using broadcaster content.” New York based Locast offers viewers access to over the air broadcasts via the internet to roughly 13 cities (about 31% of the US market). Its website notes the operation is funded by donations and that access to this content (again, already accessible for free via an antenna) should be a consumer “right” given that US consumers technically own the airwaves these programs are broadcast over.

Not too surprisingly, the big four broadcast networks disagree, something we had expected:

“Locast is simply Aereo 2.0, a business built on illegally using broadcaster content,? the lawsuit reads in part. ?While it pretends to be a public service without any commercial purpose, Locast?s marketing and deep connections to AT&T and Dish make clear that it exists to serve its pay-tv patrons.”

Aereo, you may recall, attempted to set up a bunch of cumbersome micro-TV antennas which it could then use to stream broadcast TV to paying subscribers. The company’s technical approach was intentionally designed to be arguably ridiculous in a bid to comply with the law and a number of historically just as ridiculous copyright case rulings. The Supreme Court ultimately demolished Aereo with a dubious ruling that made numerous assumptions and provided zero guidance for companies who wanted to enter the space but comply with the law.

Enter Locast. The company was developed by former FCC lawyer and media executive David Goodfriend, who, we noted previously, designed the service entirely from the ground up in a bid to try and comply with (and test the logic of) the current legal minefield. It’s funded in part by AT&T and Dish Networks. But unlike Aereo, Locast is a non-commercial entity offering access to over the air broadcasts via the internet for free. In an interesting New York Times profile piece last January (a good read to fully understand what Locast does), Goodfriend had this to say:

“We really did our homework,? he said. ?We are operating under parameters that are designed to be compliant within the law.”

Of course Aereo also thought it had designed a system that would comply with the nation’s muddy laws on this subject, and yet here we are. Goodfriend (quite correctly) notes that the public technically owns the airwaves and that initially, over the air broadcasts were designed as a free, public good, something that’s been lost in a mad scramble for cash in the years since:

“Our society got way over-commercialized in the ?40s and ?50s, when media policy was being hammered out,? he said. ?As a result, we don?t have stuff for the public anymore.?

?The American people have given you something really valuable, the airways, for free,? he said, talking about the broadcasters, his eyes popping at the word ?free.? Slowing down for emphasis, he added: ?So shouldn?t we get something back for free? Which is great television. That?s the social contract, right?”

The difference being that Goodfriend designed Locast after teaching the Aereo case to law students at Georgetown. It’s built from the ground up with a solid understanding of what happened to Aereo, and the expectation that the operation would likely be sued. Whether that matters of course will depend entirely on the Judges that hear the case. The lawsuit leans heavily on the claim that because AT&T and Dish have helped fund the project, it’s little more than a ruse to help some companies avoid paying retransmission fees (ignoring that both companies pay these fees to stream this content via other services already).

This should be a very interesting one to watch.

Filed Under: , , , , , ,
Companies: abc, aereo, at&t, cbs, comcast, dish, fox, locast

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Comments on “Big Four Broadcasters Sue Streaming Video Provider Locast, Claim It's 'Aereo 2.0'”

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Luckydob (profile) says:

Re: except ATT/DirTV are NOT paying retransmission fees

Actually Nexstar / CBS has taken the channels away from AT&T. AT&T views the costs they are asking as too much based on viewership numbers and refused to pay what they are asking for. It’s a bit more complicated than that, but essentially CBS is asking for a 50% increase in fees and AT&T isn’t going to do that. So, we don’t have CBS / Nexstar stations. It happens all the time with AT&T, Comcast, Dish, etc… XYZ company asks for higher and higher costs per sub each and every time the contract ends. This is why cable bills are crazy expensive. We are quickly reaching the breaking point with media companies.

Gwiz (profile) says:

Re: Re: except ATT/DirTV are NOT paying retransmission fees

We are quickly reaching the breaking point with media companies.

Yep. I’ve been a loyal DirectTV subscriber for 15 years now. Both the wife and I were employed by a local DirecTV installation company when we first got DirectTV and have been very happy with it up to shortly after AT&T bought them.

The first thing we noticed is that the quality of the customer service department went in the toilet. The second thing we noticed is the constant push from them to bundle our internet service and landline (which were already from AT&T) together with our DirecTV.

Now we have lost all of the CBS channels including our local broadcaster (which we pay an additional fee to have included). My wife asked if our bill will be prorated for the channels we are no longer receiving and AT&T has no interest in passing the money they are saving by not paying CBS to it’s customers.

We are now looking into other options – SlingTV, Roku, etc. It only took AT&T a few years to turn loyal DirecTV subscribers into cordcutters.

James Burkhardt (profile) says:

I find a line of reasoning you see on other sites quite interesting.

Aereo took a second stab at things by reasoning that, based on the SCOTUS ruling they were a cable provider and so should be allowed to pay mechanical royalties to rebroadcast. If they are a cable company they get the benefits of a cable company.

The broadcasters argued they weren’t a cable company for the purposes of mechanical licenses. The court seemingly agreed, denying mechanical licenses to Aereo.

But to win in this case they have to argue that Locast is a cable company, that they aren’t a nonprofit improving access to the local OTA TV broadcast but a commercial cable company. That is going to run headlong into arguments they deployed against Aereo.

And the commercial argument really hinges on financial donations from Companies with Satellite TV interests as establishing that Locast is actually a front for those companies to gain a financial advantage. But winning on this point could be a loss of the war – as it provides a blueprint for what to change next time. Now it could be that SCOTUS is attempting to write free TV and signal boosting out of the law, but commercial use seemed to be the big sticking point for the SCOTUS, as it often does.

christenson says:

Policy argument

Indeed, BROADCASTERS, you run this signal over the PUBLIC airways, THROUGH MY HOUSE, yet I can’t do whatever I please with the signal???

Radio stations that engage their listeners stream over the internet, and more, help you time-shift stuff that happens at the wrong time with the two week playback archive. What’s wrong with you broadcasters???

Anonymous Coward says:

How many other non-profits at risk?

So how would a ruling against Locast affect other non-profits? I’m specifically talking about non-profits setup and donated to by other large companies. Does that mean any non-profit that gets a six figure or larger donation from a corporation is subject to losing its non-profit status? That could set some interesting case law when it comes to taxes and other areas. I’m not sure the broadcasters really want to go down this path.

Annonymouse (profile) says:

Re: How many other non-profits at risk?

Oh that would be a classic.
Broadcasters take on Ronal McDonald and his houses as well as all thosr children’s hospitals and all those sick kids plastered across the media streams saying they want us to die for their quarterly profits. Well big Pharmaceutical and Insurance do that already but still.

R.H. (profile) says:

Re: How many other non-profits at risk?

I currently volunteer for one of the smaller non-profit high school robotics programs that currently receives an amount in the low six-figures in donations annually including money from multiple large automotive corporations. I personally know the leadership of other programs like ours who receive amounts in the seven-figure range who, if the decision went that way, have the connections to make life difficult for anyone who made it hard for their programs to help their kids. I wouldn’t cross those people.

James Burkhardt (profile) says:

Re: Re:

Yes. Commercial cable companies can not re transmit broadcast TV without paying a fee.

However, the law allows non-profit entities to re transmit broadcast TV to improve access to the local signal so long as they do not charge for the service. Locast retransmits those broadcasts to local residents over the internet, as accessing local broadcasts has become harder as we have filled our skylines and ability to mount an antenna has gone down.

Anonymous Coward says:

The tv companys use the public airwaves to broadcast tv ,mostly funded by advertising,
if they had to pay for the bandwidth it would cost billions,
Any person who lives in the usa should be able to watch over the air tv.
They also get paid fees by cable tv companys .
in some area,s mountains may block the signal,
if people can use locast to get a better signal ,
thats a good idea .

Ed (profile) says:

Streisand effect in action

I’d not heard of Locast until reading of this lawsuit. Now I have it installed and working on my Nvidia Shield TV so I can get the LA channels more easily. I have a rooftop antenna to get local channels, but they recently reshuffled them (requiring a rescan) and we lost KCET which was replaced by SoCal PBS and it is far inferior. Now we can watch KCET again on Locast!

idearat (profile) says:

Re: Streisand effect in action

Yep, that’s how I found out and signed up. I don’t really need it, but I’m ok kicking in $5 a month to keep them going and have options.

It does mean I can now easily view live local news from my phone without screwing around with each TV station’s logins and other odd behavior. My phone now could replace the portable TV I used to have when I wanted to catch live news while out and about.

BTW, I live too far away from the big city to get the dozens of channels being broadcast. I"m less than a 1/2 hour away, but the hills make receiving more than a couple of channels impossible.
Since I’m in the geographic area dictated by the broadcast license owners no one would ever be around to offer an OTA service for where I live. I think having exclusive territory based on broadcasting, but then people paying the rebroadcast fee is something they like way too much.

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