Nonprofit TV Service Locast Accuses Big Four Broadcasters Of Collusion

from the dysfunction-junction dept

Locast, a New York based nonprofit that offers viewers access to over-the-air (OTA) broadcasts via the internet, has accused the big four broadcast networks of colluding to restrict consumer access to those broadcasts. As we noted recently, Locast was custom built to test the copyright legal minefiled created in the wake of the Aereo ruling, which made made numerous dubious assumptions and provided zero guidance for companies that wanted to enter the space but comply with the law. Enter former FCC lawyer and media executive David Goodfriend, who effectively created Locast specifically in the hopes the industry would sue.

Last month Goodfriend got his wish, with ABC, CBS, Comcast/NBC, and Fox all filing suit, claiming the video nonprofit (which currently offers the service in 13 markets) is "illegally using broadcaster content." Locast in turn has now responded in a court filing (pdf), alleging that the broadcast networks have unfairly colluded to restrict public access to OTA broadcasts:

Plaintiffs have colluded to limit the reasonable public access to the over-the-air signals that they are statutorily required to make available for free, and have opted instead to use their copyrights improperly to construct and protect a pay-TV model that forces consumers to forgo over-the-air programming or to pay cable, satellite, and online providers for access to programming that was intended to be free. A large portion of the fees paid by the public is then handed over to Plaintiffs in the form of retransmission consent fees.

Broadcast TV networks are available using both an inexpensive antenna and airwaves that are technically owned by the public. But, given broadcast networks collected $10.1 billion in retransmission fees for these channels in 2018 from cable TV operators looking to include them in their cable lineups, they're obviously not keen on outfits looking to disrupt their profitable, existing models. Locast currently streams these channels in 13 markets but doesn't charge users for access, only taking donations as a nonprofit. Its lawyers say the existing broadcast model is little more than a complicated con:

This is classic copyright abuse. By limiting access to the over-the-air signals that Plaintiffs have committed to make freely available, and simultaneously using the copyrights in their programming to drive revenue for the local programming that consumers cannot now effectively receive over the air through their pay-TV model, Plaintiffs have colluded and misused copyrights to expand their market power beyond what those copyrights were intended to protect. The payTV providers get rich. Plaintiffs get rich. The public gets fleeced.

In addition to engaging in what Locast's lawyers call a "a sham copyright infringement claim," they state that the broadcast networks have been working in concert to threaten retaliation against any additional partners beyond AT&T and Dish:

Plaintiffs’ bad faith litigation is part of a broader coordinated campaign to undermine Defendants’ business dealings and chill financial support among potential donors, including with direct threats of retaliation or baseless litigation against them. These threats have harmed competition and will continue to do so until stopped by this Court.

The broadcasters' lawsuit was filed in US District Court for the Southern District of New York against Sports Fans Coalition New York (SFCNY), the organization that technically runs Locast. The broadcasters continue to argue that the outfit is not only illegal, but that it's not eligible for non-profit status because it's funded, in part, by Dish and AT&T, two companies both trying to make inroads in the streaming TV space.

Filed Under: antitrust, collusion, competition, copyright, david goodfriend, tv
Companies: locast


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  • This comment has been flagged by the community. Click here to show it
    icon
    Zof (profile), 2 Oct 2019 @ 4:23pm

    So basically,

    We'll figure out who has more money soon based on who the Media starts attacking.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 2 Oct 2019 @ 5:23pm

      Re: So basically,

      Remember when you promised to pack your shit up and leave forever bro.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 2 Oct 2019 @ 7:57pm

        Re: Re: So basically,

        He's not wrong; he just conveniently happens to be selective when it comes to the media attacking Trump.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 3 Oct 2019 @ 7:33am

          Re: Re: Re: So basically,

          All the mainstream media does it attack Trump, normally with made up LIES! Then it's redacted a short time later that few people see as they're onto the next new lie.

          reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 2 Oct 2019 @ 5:41pm

    There's no limit to how much money a non-profit can take in in donations, or from who. Locast has them by the legal balls, because retransmission by a non-profit is NOT copyright infringement. All I know is I can't wait until next baseball season so I can watch WPIX carry the Yankee games on Locast on Roku, instead of having to attempt to pick up a signal from an OTA antenna, which is almost impossible.

    reply to this | link to this | view in chronology ]

    • identicon
      A Guy, 2 Oct 2019 @ 6:07pm

      Re:

      Non profits are banned from self-dealing. This means you can't make a non-profit just to serve you so you can avoid paying taxes. The non-profit has to serve a population other than its donor base and/or steering committee. If they can prove that the non-profit is engaging in self-dealing then its not a lawful non-profit entity.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 2 Oct 2019 @ 6:13pm

        Re: Re:

        Going to be hard to prove self dealing considering they serve 13 markets at the moment. I highly doubt every person who uses those services are on the steering committee and donor base.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 2 Oct 2019 @ 6:27pm

          Re: Re: Re:

          I actually hope they win.

          reply to this | link to this | view in chronology ]

        • identicon
          A Guy, 2 Oct 2019 @ 7:28pm

          Re: Re: Re:

          Like I said, I hope locast wins... but the self-dealing argument is that they are primarily there to serve satellite and cable operators so they don't have to pay over the air broadcasters fees to carry their programs.

          I find the supposedly free tv channels current business model dubious considering some of the regulations associated with their broadcast licenses from the FCC. However, I don't really care about it that much.

          If the cable/satellite broadcasters plan to NOT pass any savings to the consumer from lower costs associated with not having to pay ABC/NBC/FOX/CBS then the self dealing argument is pretty strong because they are not serving the consumer, they are serving the cable and satellite broadcasters bottom line only in that instance.

          reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    icon
    seedeevee (profile), 2 Oct 2019 @ 7:38pm

    Someone Call Rachel Maddow!

    Collusion!!!!!!!

    reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 3 Oct 2019 @ 12:07am

    Been waiting for this..

    OK..
    CABLE TV tried to get htis going long ago. FREE cable TV. They would only advert on the channels to make money, and very few of those.

    The Broadcast companies said NO.. I dont know how far the fight went. but in the end the Cable TV group decided to PAY for it.. and pass the cost to the customer..
    20 clear Channels for $10, wasnt to bad. They were CLEAR clean pictures.

    Would be nice to find out if this went to court, Long ago. Because if there ISNT...there would be a great case for Collusion.

    There is another point, probably brought up by the Broadcasters, is the rebroadcast Charge... When did it start? WHY did it start? Why isnt the Corps PAYING to get it broadcast.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 3 Oct 2019 @ 6:30am

      Re: Been waiting for this..

      question Why did it start?

      I believe this started sometime back in the 80s (or early 90s, I forget) with the Must Carry rules.
      Broadcasters were given a choice.

      1. They can force a cable company to carry their channel (must carry) but cannot collect retran fees
      2. If they decide to collect retrans fees then the cable operator can decide not to carry the channel.

      In the beginning they started with option 1.
      Once pay tv penetration reached a certain point they all went to option 2

      Question 2.. why did it start... MONEY

      Question 3... When they get in their retran spats the paytv subscriber all get their panties in a bunch that they are not able to see their favorite sitcom/reality show/procedural (murder or the week)/sports team. Why pay for retrans when the addicts are clamoring for your product?

      reply to this | link to this | view in chronology ]

      • icon
        ECA (profile), 3 Oct 2019 @ 11:47am

        Re: Re: Been waiting for this..

        Interesting..
        So why in Hell did ESPN, get the cable corp to Give ESPN to everyone and Charge us for it..
        Over 50% of the people dont want it.
        The old way was as Packages of channels you paid for, and Cheap was $20..
        NOW you can get cheap as price Start (after fines and fee's) around $50..
        And in My figuring Cable could of had them by the Balls, if they would of Stood up and NOT given access to those corps that WANTED money. It would of been cheaper to allow Cable/Sat to send Access to everyone for $10 per year..

        Love the corp ideals.(shoot them all)

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Oct 2019 @ 7:28am

    There is more to this lawsuit than what people realize. IF Locast wins, Then the this will most likely mean that the Local Broadcast Fee that many cable operators have started charging (started by Comcast) which is up to $10 bucks a month will be proven to be illegal, as they can't charge for transmissions that are intended to be free of charge.

    reply to this | link to this | view in chronology ]

    • identicon
      A Guy, 3 Oct 2019 @ 7:44am

      Re:

      No, it's not illegal but it can just be supplanted by locast service. Why pay the fee when locast will give you an API to use for free?

      reply to this | link to this | view in chronology ]

      • identicon
        Annonymouse, 3 Oct 2019 @ 9:47am

        Re: Re:

        Technically not free since it has already been paid for with advertising revenue.

        I find it irksome that there even are ads on channels I paid up front for.
        Even more so when the original broadcast didn't have any ... see any public broadcasting service available on local cable. Those are already fully paid for and costs them absolutely nothing yet we have to pay a premium and still get inundated with commercials.

        reply to this | link to this | view in chronology ]

  • icon
    Xsquid (profile), 3 Oct 2019 @ 10:06am

    Hope they Win

    When Must Carry was a thing, it was on the Cableco to purchase the gear to redistribute the broadcaster's signal.
    When the broadcasters began to choose Retransmission Consent, the channels were mostly already on systems, so the investment was sunk cost. Along the way, the digital conversion required the Cablecos to again repurchase the reception gear and reconfigure/replace off-air antennas to carry SD and HD versions of Over the Air programming.
    The first contracts for retrans were for a few pennies per broadcaster, some even for nothing. But I think we all knew it was just the beginning. Since then (15ish? yrs), each negotiation (if you can call it that) has carried double digit+ increases and gotten more acrimonious, made all the worse by market consolidation, where a single firm may represent all or most of the broadcasters in a single DMA. Not bad enough? Sign the agreement and the rate is under NDA, so no comparing notes, guys....although the information is out there.

    Let the dinosaurs roar. The meteor is in the sky headed their way.

    reply to this | link to this | view in chronology ]


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